Green car insurance
Key takeaways
- Green car insurance is a general term for cover designed for hybrid and electric vehicles or policies that include eco-friendly features such as carbon offsetting
- Premiums can be higher due to expensive batteries, specialist repairs and advanced technology, although costs vary by model and car insurance group
- When comparing policies, look for EV-specific benefits like battery cover, charging cable protection and out-of-charge recovery to ensure the right level of protection
What is green car insurance?
‘Green car insurance’ isn’t a specific policy as such. It’s a general term used to describe insurance for electric vehicles (EVs) and hybrid cars, or policies that include eco-friendly benefits, such as carbon offsetting or the use of recycled parts for repairs.
In most cases, you’re still choosing between standard cover levels:
- Third-party only (TPO)
- Third-party, fire and theft (TPFT)
- Fully comprehensive
The difference between this and standard cover is how the insurer handles EV-specific risks, and whether they offer environmentally-focused extras.
What is the difference between a mild hybrid, full hybrid, and plug-in hybrid?
Hybrid cars come in three main types.
Mild hybrid (MHEV)
These use a small electric motor to assist the petrol or diesel engine, but cannot run on electric power alone. The battery charges automatically while driving through regenerative braking.
Full hybrid (HEV)
Full hybrids can drive short distances using battery power only, typically at low speeds. The system switches automatically between electric and fuel power.
Plug-in hybrid (PHEV)
PHEVs have a larger battery and can be charged using a plug-in charger. They can usually travel further on electric-only power before switching to petrol or diesel.
From an insurance point of view, all three are treated similarly to conventional vehicles - although repair costs and battery systems are factored into pricing.
Are hybrid and electric cars cheaper to insure than petrol cars?
Not usually. On average, hybrid car insurance costs are similar to or slightly higher than petrol or diesel cars. While EVs and hybrids are viewed as more environmentally friendly, they can be fairly expensive to repair.
The higher costs are usually due to:
- Expensive battery systems
- Specialist parts
- Advanced onboard technology
That said, prices vary significantly by model. Some lower-powered hybrids sit in modest car insurance groups, and cover can be competitively priced.
Why is green car insurance more expensive?
Several factors can push premiums higher for hybrid and electric vehicles:
- Battery replacement costs - EV batteries are expensive. If damaged in an accident, repairs or replacements can significantly increase the cost of car insurance claims.
- Specialist repair networks - not all garages are trained to work safely on high-voltage systems. Specialist mechanics may be required, pushing up labour costs.
- Advanced technology - hybrid and EV models often include complex safety systems, sensors and onboard technology, which can be costly to repair after only minor collisions and car accidents.
Because car insurance providers price policies based on potential claim costs, these factors are reflected in car insurance premiums.
Do I need specialist cover for hybrids or EVs?
If you drive a hybrid or electric vehicle, certain features are worth keeping an eye out for:
- Battery cover protects you financially if the battery is damaged or stolen. Some policies treat leased batteries differently, so always check the wording.
- Charging cable cover covers loss, theft or accidental damage to charging cables, whether at home or at a public charging point.
- Out-of-charge recovery provides recovery assistance if your battery runs flat and you’re unable to reach an EV charging station.
These aren’t always included as standard. Be sure to check out which features are available when comparing policies, and which aren’t.
How do insurance groups work for hybrid cars?
Hybrid and electric cars launched before 1 August 2024 are placed into car insurance groups from 1 to 50, just like petrol and diesel vehicles. Cars launched on or after 1 August 2024 are grouped from 1 to 99 under the new Vehicle Risk Rating (VRR) system.
The group your car falls into is calculated based on factors such as:
- Vehicle value
- Repair costs
- Performance and acceleration
- Safety features
- Availability of parts
Many EVs fall into higher insurance groups due to battery value and repair complexity, but this varies by make and model.
What official green discounts or benefits are available?
Some insurers offer environmentally focused incentives, including:
- Carbon offsetting, where emissions from a set number of miles are offset through environmental projects
- The use of recycled or green parts where appropriate during repairs
- Incentives linked to low-emission vehicle ownership
Outside of insurance, hybrid and electric vehicles may also benefit from:
- Lower road tax, depending on vehicle type and value
- Exemptions from certain urban clean air or congestion charges, e.g., ultra low emission zones (ULEZ)
These benefits can change over time, so be sure to check the latest rules. Also, find out whether you’d benefit from switching to green energy.
How can I get cheaper green car insurance quotes?
There are a few practical steps you can take to reduce your car insurance premium:
- Increase your voluntary excess, although make sure you can afford to pay it if you need to claim
- Park in a garage or secure location overnight
- Limit your annual mileage if you can, by cutting out unnecessary trips
- Always compare car insurance from a range of providers (26 days before renewal is often the sweet spot)
Read more handy tips to reduce the price of your car insurance.
You might also be able to get cheaper energy by opting for a tariff tailored to EVs.
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