Honda announces free auto insurance for some customers

Insurance technology and news

Insurance technology and news

The vehicle manufacturer is offering some coverage without charge for buyers of its electric Fit.

Honda Motor Co. has announced that its latest electric car comes with the unique option of free auto insurance that covers collision with no deductible.

This is the most recent feature being offered among manufacturers to encourage the sale of their electric products.

The effort has been made to help to make the cost of purchasing and owning an electric car more similar to that of the less expensive vehicles powered by gasoline. It is, however, in direct opposition to the tendency of automakers from Detroit, which have traditionally steered clear of offering coverage to their buyers.

GM had tinkered with the idea of free auto insurance in 2011.

The program was offered to drivers in Washington and Oregon. They were offered a year of coverage with a the purchase of a new car in those states. However, once the policies expired, General Motors did not continue or expand the program.

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Officials from Honda, however, have explained that they feel that the offer of free auto insurance is a great way to eliminate one of the primary hurdles – the cost barrier – to introducing their first electric vehicle to the American consumer. They also expressed concerns that insurers would struggle to determine the financial risk that would be involved of providing coverage for repairing a vehicle that was not yet commonplace.

Though the big automakers have had electric cars available in United States showrooms since the end of 2010, beginning with the Nissan Leaf, there have been slow sales for electric vehicles due to their higher prices and more limited range in comparison with their standard gasoline fueled counterparts. Moreover, they require their owners to install charging stations at their homes – at a cost of anywhere from $1,500 to $2,500.

Though the amount of savings that customers of the new Fit EV from Honda who receive the free auto insurance will vary, depending on their home address, driving record, and other factors that are included in the calculation of coverage premiums, it is the automaker’s hope that it will reduce the expense associated with the vehicles to a large enough degree that their appeal will increase.

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