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UK Insurance Company Offers Discounts to Drivers of Hybrids

A UK insurance company, MORE TH>N, a is now reducing premiums for existing customers with hybrid cars by up to 13% and offering a comparable discount to new customers with hybrids.

The company, the direct arm of Royal & SunAlliance UK, is the first insurer in the UK to offer such a discount. Several insurance companies in the US are offering varying discounts to their hybrid car customers.

All vehicles in the UK are allocated an insurance group rating on a scale of 1-20. MORE TH>N will reduce the rating for all hybrid and Liquefied Petroleum Gas (LPG) vehicles by two groups. For example, a Toyota Prius is a group 7, but MORE TH>N will classify it as a group 5. The lower the insurance group rating, the less expensive the insurance premium.

MORE TH>N made the announcement concurrent with the release of new research it commissioned indicating that:

  • Seven out of ten Brits would consider switching to an hybrid car if they were cheaper to run than normal cars;

  • More than half (60%) would consider switching if there was reduced motor tax; and

  • 58 per cent would consider switching if they could benefit from cheaper motor insurance.

Hybrid car drivers also benefit from a reduction in car tax announced in the 2006 budget and exemption from the congestion charge in central London.

Four in ten motorists would consider switching for the environmental benefits and almost half (48%) are seriously concerned about the impact that full gasoline cars have on the environment. Despite this, only one in five of those questioned by MORE TH>N know the amount of carbon dioxide that their current car emits.

Green motoring is going to be a massive growth area for the car industry as petrol prices continue to rise and concern over global warming grows. We want to financially reward drivers who are taking steps to do their bit for the environment.

—Keith Maxwell, head of motor insurance at MORE TH>N

The number of hybrid cars registered in the UK rose by 74% from 2004 to 2005.



Combine this with per mileage charges for insurance and you might be able to further encourage frugal use of gasoline. Anything we can do to transfer fixed costs to variable costs makes the owner more sensitive to miles driven. While we're at it, make registration and license fee costs miles dependent also. Of course, if you dump your car and sign up for car sharing, then almost everything is variable.


Btw, I find it remarkable that one in five knew how much carbon their car emitted. That seems damn high to me.


Bearing in mind that here in the UK, company car benefit in kind tax and road tax (vehicle excise duty) are both based on CO2 emissions.

Thus its not too surprising that 1/5th of people knows their cars output.


shaun mann

right, so as a corporate employee, one of the benefits is a free or subsidized company car that is all your own and used for whatever you want to use it for.

the selection of cars you can choose between is based on their carbon dioxide output.

so, if you have this benefit, you know the carbon output of cars you might want.


Road tax applies to all cars on the road, not just company cars. So therefore everyone's car has to be taxed (has to have a disc in the window) every year and the cost of this is related to CO2 in g/km over the EUDC emissions cycle.

So pretty much most people will have an idea how much their last tax disc cost and why.

Rafael Seidl

Hybrid drivers are probably a lower insurance risk because they pay more attention to their dirving style - more aggressive means more fuel consumed. Moreover, they probably had to jump through a few hoops to get their car to begin with, so they are more likely to take good care of it. In other words, this is probably mostly a smart business decision to gain market share. The green spin is just so much marketing.

You don't have to own a hybrid to drive defensively, of course. Simply having a fuel economy gauge on the dashboard will probably moderate your driving style, helping you earn a lower premium over time.

Insurance companies could also offer for-fee classes related to improving situational awareness, traffic safety, theft prevention and fuel economy - including efficient manual operation (shift up at low RPM). Passing the theoretical and practical exams associated with the classes would entitle you to a discount on your insurance premium.


Some insurance companies stateside offer discounts for having taken "defensive driving" type courses, but the value of the discount is not usually all that high.


No way Raf,

All the Prius drivers I've seen dawdle at 45mph everywhere, including through 30 limits in built up areas, 60 limits out of town etc etc.

Dawdling and paying attention rarely overlap in the great Venn diagram of road users.....


And will this insurance company also offer discounts to biofueled vehicles? These vehicles often have lower emissions and equal high mpg as hybrids. Currently most hybrids are powered with petroline. Gasoline pollutes, is passe', and is not renewable.



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