Green car insurance
There are now a host of 'green' car insurance companies in the UK offering schemes that claim to be environmentally friendly. So how do these policies work and do they still offer value for money?
What is green car insurance all about?Return to top
Maybe you've heard of The Green Car Insurance Company, ibuyeco or one of a host of car insurance providers that tailor their products towards drivers with an ethical conscience. However, just what makes them different?
In most cases, these providers offer 'carbon offsetting' schemes. With this feature, an assessment is made of how much carbon dioxide (CO2) your vehicle will emit during the course of the year taking into account factors such as the fuel type you use, your annual mileage and the car's engine size. Using this assessment, the company then purchases carbon credits from carbon offsetting projects around the world - the more your vehicle pollutes, the more credits the insurance company will typically purchase.
The schemes themselves can take a number of forms - they could involve planting trees to make up for the loss of rainforest, they could be recycling efforts, or any one of a number of green projects. Some insurers will 'offset' up to 100 per cent of your vehicle's emissions, while others will take a percentage of the premium you pay towards these schemes. Other companies that claim to be eco-friendly will dedicate a portion of the premiums you pay towards one of a designated group of eco-charities.
Due to the increasing popularity of green cars and the added emphasis placed on fuel consumption and emissions, many conventional car insurance companies are also offering green schemes to appeal to this consumer base. This could involve paying an additional premium to offset your vehicle's emissions, or enjoying reduced premiums for driving a car powered by an alternative fuel.
Do green car insurance policies offer value for money?Return to top
Green car insurance policies could be more expensive than a similar policy from a conventional insurer because money is dedicated to a green project. As such it's sensible to gain an overview of the market to assess whether the green incentives are worth any additional expense.
This can be done relatively quickly with a comparison website. Most insurers offer their cheapest deals online due to the savings they make on overheads and by using a comparison website you could compare deals from more than 100 insurers with a single search. Importantly, many of these websites also include green car insurance companies in their listings so you can compare their rates with those of conventional insurers like for like.
Importantly you should look beyond price alone and consider what you're getting for your money - does the green car insurer offer the same level of protection you could find elsewhere, for example? Think about which policy options are important to you and examine the terms and conditions of a policy carefully and look for exclusions - these are circumstances in which you will not be covered.
One of the main advantages of green car insurance companies is that they may offer discounts for driving vehicles with alternative powertrains or that rely on different fuelling methods - such as hybrids, electrics, hydrogen-powered and biofuel-powered cars. These vehicles may be more expensive to insure with conventional insurers because their specialist parts may be more expensive to replace/repair.
If you have a green or alternatively fueled car but are in the Motor Trade (e.g.car dealership or MOT service centre), you should consider taking out a specialised Motor Trade Insurance policy, rather than a standard policy, to safeguard against risks to your motor trade in the future.
Remember that you could always shop around and find the cheapest deal available to you and then use the money you have saved to put towards a green scheme of your own choice. This will require a greater level of discipline with your money however, and it is often easier to have the insurer do the work for you.
Are there ways to bring the cost of green car insurance down?Return to top
Reducing your perceived risk of making a claim will lower car insurance premiums regardless of whether you opt for a conventional policy or a green scheme. So follow these tips to bring your premiums down:
- Agree to a mileage limit: Not only will limiting the number of miles you drive each year be better for the environment, but it could reduce your car insurance premiums too.
- Buy online: Taking out car insurance on the internet will reduce your environmental impact by limiting the amount of paper used - and it is also where you will find the cheapest policies due to insurers' reduced overheads.
- Choose a suitable car: Though some insurers charge more if you drive a hybrid or electric car, driving a conventional car with a small engine (and generally therefore lower fuel consumption and emissions) should reduce premiums. Vehicles are classified into insurance groups ranging from 1-50 based on how expensive their parts are to replace, their security features, and the performance level of the engine - choosing an older car with a smaller engine, will usually reduce premiums.
- Enhance security: Fitting car alarms, immobilisers and tracking devices could reduce premiums, as could parking in a garage overnight.
- Increase excess: Most car insurance policies have a compulsory excess - an amount you must pay in the event of a claim - and a voluntary excess, which is an additional amount you agree to pay should a claim be necessary. Increasing the excess will lower premiums though it should only be set at a level you can comfortably afford.
- Pay annually: By paying premiums annually rather than monthly you can avoid interest charges and eliminate the need for monthly paper statements.
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