If you’ve just decided to ignore the numbers, the competition, common sense and general style guidelines, and buy yourself a brand new Toyota Prius, you might be surprised when your insurance company doesn’t fall all over itself trying to offer you a lower premium.

It is true that some insurance companies have offered incentives or small discounts to people who buy selected hybrid vehicles. However, these are normally marketing drives based purely on manufacturer-insurer cooperation, and an attempt to rack up carbon tax credits, than a genuine effort to save the planet and your money.

But Why Not?

As much as I enjoy seeing Prius drivers finding out anything unpleasant about their cars, it’s worth explaining exactly why they aren’t attracting lower premiums, outside of special promotions.  In order to do this, you need to know that the insurance-worthiness of any car is judged along three different categories.  These categories were first added by State Farm Insurance, but are now used widely.

They are each indexes based on actual claims data for damages versus the premiums paid for that vehicle.

Collision Damage Index – The Prius gets a “D”, which is higher than average in terms of premiums.

Collision Theft Index – Here the Prius gets a “D” as well, making its premiums generally higher than the amount you get back if it is stolen

Liability Rating Index – This relates to third party liability, and here the Prius scores a “B” – slightly lower, but giving it an average rating that is resolutely… average.

So it might be saving the planet (but actually it isn’t saving it as much as your average 10-year old diesel car), but insurers don’t care about how much you save the planet.  Their Marketing departments care that you think they care, but if it hurts their bottom line they have no incentive to give you a preferential rate, simply because your car uses marginally less gas than most regular drive vehicles.

It costs comparatively more to repair it than other cars of its price range and category – cars that earn them the same money in premiums, but cost less if they crash.  So you see, if you really want to find a car that is cheaper to insure, and is saving the planet, then you should have a look at our list of cheapest cars to insure in America, and pick out a nice diesel model.

Teenage boys may laugh at you, and you will struggle to drive around in San Francisco, but you’ll be paying less for insurance and gas than anyone else.