Hybrid cars. They’re all the rage. Some of the biggest car manufacturers in the world have started to pump out hybrid models by the dozen, including Ford, Toyota, and Honda. Why is the world loving them so much – now, of all times? 

With gas prices higher than ever and a climate crisis on the precipice of exploding, we are starting to see increased merit in purchasing environmentally friendly alternatives to our classic gas-powered vehicles. For every litre of gasoline that is used, a vehicle can produce roughly 2.3kg worth of CO2. Despite advancements in technology to create hybrid and purely electric vehicles, there is no technology that currently exists for eliminating CO2 emissions in our air.

Despite their environmental benefit, there’s one gigantic enigma that still surrounds hybrid vehicles. What is auto insurance going to look like as more and more drivers hop on the “hybrid” train? In this blog post, LMBF digs in.

What are hybrid cars?

Hybrid cars are vehicles that either need to be plugged into a charging unit (or household unit) and/or charge their batteries as they drive. They combine a gasoline engine as well as an electric motor such that electricity and gasoline, together, may power the vehicle. There are currently two types of hybrid cars available on the general market: HEVs and PHEVs.

HEVs (hybrid electric vehicles) operate by charging batteries as you drive and cannot be plugged in. They are highly sought after thanks to their improved fuel economy and their ability to recapture energy while you are braking. They emit fewer greenhouse gases than their fully gas-powered cousins and they cost less to run. They can, however, be costlier to purchase upfront.

PHEVs are “plug-in hybrid electric vehicles” which have a larger battery and can be plugged in to charge on either a 120-volt household outlet or on a 250-volt charging unit. They are able to drive short distances uses only their electric power. They can go up to 25 miles or more driving on purely electric power. Plug-ins, however, can operate on hybrid mode and not require to be plugged in, so long as the tank is currently full.

How does auto insurance work for hybrid cars?

Is auto insurance any different for hybrid cars? No, it’s still the same. Some people may choose to purchase additional, optional coverage to increase their plan’s limits to reflect the more expensive nature of these vehicles, in addition to what is offered by Quebec’s public auto insurance plan. 

Today, auto insurance premiums are reflective of a driver’s risk. That will also include the make and model of their vehicle, its market value, modifications/additions, etc. so as to calculate its total replacement value. Currently, most hybrid vehicles on the market are worth more than your regular gas-powered car, and as such may be more expensive to insured compared to other vehicles. Electric cars may be even more expensive to insure. Some providers will offer discounts for green vehicles, but this usually isn’t enough to totally offset the cost of these cars.

Gas prices may be skyrocketing interest in hybrid vehicles

With recent events skyrocketing gas prices in Canada, it’s no wonder that there’s a surge in interest for electric or hybrid cars. The future is in hybrid vehicles – there’s no doubt of that, but the price surge for gas may have moved us along faster than we could have predicted.

While the upfront costs of purchasing an electric or hybrid vehicle may be higher than that of a gas-powered car, ongoing costs for hybrids/EVs tend to be lower. EVs don’t have an engine, so they don’t need to be serviced, where hybrids may be able to go longer without servicing and don’t necessarily require as much gas to run as a gas-powered alternative (saving you costs.) For long-term savings and the added environmental benefits to boot, hybrids and EVs are more appealing than ever.

What does the future of auto insurance look like?

Auto insurance may change in the future with the increasing popularity of hybrid and electric vehicles. Soon, they may take the place of gas-powered vehicles. Some countries are even considering replacing gas-powered vehicles altogether with their hybrid/electric cousins to ensure that we can continue battling the impending climate crisis as best we can.

Ideally, this means that the cost of auto insurance for hybrid/electric vehicles will go down. As parts become more available and manufacturers start to pump these models out in higher volumes, it is expected that the costs to insure gas-powered vehicles vs EVs/HEVs will be roughly the same.

Another thing to be considered is the inclusion of autonomous vehicles, or self-driving cars. These cars are predicted to start hitting public roads in the next decade or so and are ground-breaking thanks to the fact that they can be entirely piloted by AI. What does this mean for the auto insurance industry? Well, this may mean in inability to determine “at-fault” in accidents. Auto insurance rates will ideally be lowered as collision rates start to fall thanks to the absence of human error and incidents may be entirely attributed to manufacturer defect. While it’s difficult to say how this will impact the way that claims are handled, it’s a safe bet to say that autonomous vehicles will radically change our public roadways. There are two states where autonomous vehicles are being proposed – one where the technology is safely and effectively replacing the driver altogether, and one where the driver is being assisted and/or supported by technology. Both may be valid options in the future.

Do you drive an electric or hybrid vehicle? If so, LMBF can help you find affordable, comprehensive hybrid/electric auto insurance in Quebec. Get a free quote with us today.