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Source: Wall Street Journal Online:

“Drivers of hybrid cars frequently get a discount on their auto-insurance policies just for being “green,” but one insurer argues that such discounts makes sense, and money.

That’s the way Farmers Insurance Group views the 10% hybrid-car insurance discount the company pioneered in 2005.

“We thought it was the responsible thing to do,” said Brian Dwyer, senior vice president of auto for Farmers, which is a unit of Zurich Financial Group AG (ZFSVY). Farmers began offering the discount in California, home to about 25% of all hybrid vehicles registered in the U.S. “We had a theory that it might turn out to be a better loss ratio,” Dwyer said.

After studying its results in California, in 2006 the company expanded the 10% discount to all the states in which it operates, and has found that the discount brings in a choice customer segment, despite finding that some costs might run higher for these customers.

Now, Farmers insures about 90,000 hybrid cars in the U.S, or about 7% of all hybrids sold in the last decade, according to figures compiled by research company Edmunds Inc. “

Read the full article at: Wall Street Journal Online

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