How green is your car insurance company?

When we talk about “green car insurance”, I’m not talking about the color of GEICO’s gecko, rather I’m referring to the footprint car insurance companies leave on the environment with their practices and policies. There has been a significant push in the U.S. towards more environmentally-friendly car insurance options and hopefully 2009 will see some real action taken by companies to be more eco-friendly.

The U.K. has seen several companies cater to environmentally-conscious consumers, including eGreen Insurance, The Green Car Insurance Company and ibuyeco. In return for buying a car insurance policy from these companies, they will buy part of a rainforest, offset your carbon emissions by planting new trees or offer a discount on how you drive your car.

Here in the states, other companies are taking the initiative to either improve the environment or reduce your auto insurance rates through a number of different plans. GMAC offers a program in conjunction with GM’s OnStar system where you can opt-in to send your mileage statistics via OnStar and if your annual mileage driven is under 15,000 miles, you can receive up to a 54% discount on your GMAC car insurance.

Allstate Insurance Company has the Allstate Green option in a number of states that gives you a discount on your car insurance rates and Allstate contributes 10 dollars to environmentally conscious organizations. You can also sign up for their Easy Pay Plan, which eliminates monthly statements and reduces the amount of paperwork generated.

Steve Poizner, the California Insurance Commissioner, has proposed a “pay-as-you-go” car insurance program, where your auto insurance rates are based on the actual number of miles you drive. This encourages drivers to reduce the number of miles driven each year. Drivers would verify mileage through odometer readings, repair records, or even a device installed on their vehicle that tracks actual mileage driven. The proposal would prohibit GPS-type devices that track the whereabouts of vehicles, and just limit the tracking of actual miles for privacy concerns.

State Farm has adopted a number of practices to reduce their environmental footprint. The company has 14,000 vehicles, of which 22 percent are hybrid or flex-fuel vehicles. They have reduced the number of employee conferences and replaced them with conference calls or emails. Over half of State Farm’s operations centers now qualify for the “Energy Star” label, with a 76 efficiency rating, which means that a building operates more efficiently than 76 percent of all comparable buildings.

With more and more insurance companies taking the eco-friendly road, we will undoubtedly see more states adopt the “pay-as-you-go” rate plan. By making consumers conscious of their driving habits, and giving an incentive to take alternative transportation, the impact on the environment could be substantially reduced. If you are an environmentally aware car insurance buyer, check to see what steps your company is taking to reduce paper, improve their environmental footprint and in the end, provide good insurance coverage without sacrificing our natural resources.