Hybrid vehicles may save money at the gasoline pump but not when it comes to the cost of insuring these vehicles against damage in crashes. Overall insurance costs for crash damage are higher for 11 of 12 hybrid cars and SUVs than for their counterparts that are powered by gasoline only, the Highway Loss Data Institute (HLDI) reports. HLDI is an affiliate organization of the Insurance Institute for Highway Safety.
HLDI analyzed insurance data for the 12 pairs of vehicles, all 2005-07 models, plus the Toyota Prius, which doesn't have a gasoline-powered counterpart. The frequency of insurance claims for crash damage is slightly higher for the hybrids in 8 of the 12 pairs. Claim severity — that is, the average cost of paying a crash damage claim — is higher for the hybrids in 10 of the 12 pairs.
These measures, claim frequency and the average cost of a claim, combine to indicate a vehicle's overall insurance cost for damage sustained in collisions. This cost is higher for hybrids in 10 of the 12 vehicle pairs. Exceptions are the Honda Civic 4-door and Toyota Camry. The overall cost of insuring the gas-powered Civic is 9 percent higher than for the hybrid version of this car, while the difference for the Camry is 14 percent.
The difference in overall cost between insuring hybrid and nonhybrid versions of the same vehicles mostly isn't big. In some cases the cost is about the same. However, it costs about 25 percent more to insure the Lexus GS 450h against crash damage than to insure its counterpart that's powered by gas only, the GS 430. The hybrid version of this car costs insurers more for crash damage than any other vehicle included in this HLDI study — about 2.4 times the average cost among all passenger vehicles, hybrids and nonhybrids alike. The GS 450h also has the highest ratio of horsepower to vehicle weight among the 25 vehicles in this study. A higher ratio means more power.
Relative overall cost to insurers of damage sustained in crashes
At the other end of the spectrum, Toyota's Highlander hybrid 4-door, 4-wheel-drive model has the lowest overall insurance cost for damage in crashes among the 13 hybrids HLDI studied. The overall cost for this SUV is 30 percent lower than the average for all passenger vehicles.
"We might expect the frequency of insurance claims to be higher for the hybrids because motorists who drive a lot in commuter traffic might be choosing these vehicles to save money at the gas pump," HLDI senior vice president Kim Hazelbaker points out. "The increased cost of repairing crash damage to hybrids is harder to explain, and our crash data aren't detailed enough to tell whether it's parts pricing or something else that's driving up the cost. As we accumulate more data, we'll be able to get a better idea of the reasons."
Sales of new hybrid vehicles totaled nearly 190,000 as of June 2008, with the Prius accounting for more than 91,000 of these sales, according to HybridCars.com. Eighteen hybrid vehicles are on the market for the 2008 model year, and the number for 2009 is expected to be about the same. A slew of manufacturers including Audi, Hyundai, Kia, Mercedes, Porsche, and Volkswagen are making hybrid models ready for 2010.
True hybrids combine a conventional gas-powered engine with an electric motor to improve a vehicle's fuel economy. Energy that's normally lost to braking is converted into electricity, which is stored and used to assist the engine when accelerating, climbing hills, or driving at low speeds. The engines of hybrids also shut down when idling, further boosting fuel efficiency.