car insurance logic ?

[DzoG20]

Up to very recently I was living with the understanding that the insurance companies are prizing their products purely on the risk assessment. Until I got cars with 15 years age difference ...

We have two Nissans in the family - 1999 and 2000. I like them a lot, so I took good care of them and they serve us well. My DD is(was) also our car for road-trip, so we raked up the miles on it to ~300k. Back in April I decide it is time to retire my DD from the road trips duties and find a newer one - 2015 Mazda 3. All was good until I had to look at the insurance ...

Turns out the liability on the 2015 Mazda cost twice MORE than liability on 2000 Nissan !? That's right - I mean liability coverage. Not talking about collision premium due to the car value. I checked with two major national insurance companies. Both think I'm twice more dangerous to the others when I drive my 2015 mazda. Both cars are the same class - 2.0L engine, 150hp, similar weight. Same projected annual millage,etc.
Of course I asked the agents what's the logic - couldn't get a meaningful answer. The closes to a believable one was - "Well, it's a bit sportier than the other cars in the same class". So I ran a new quota with 2015 Corolla instead - same outcome (within 8%) - the liability is twice more expensive on 15 years newer car. I also checked with 2015 Forester - same exact thing, and it didn't make much of a difference that it is an SUV and can inflict more damage! Of course on the newer cars you get all the (now) mandatory safety feature as brake assist, stability control,etc. On the older cars I have only ABS.

Go figure ...

 

[14Accent]

That's strange... I went from a 2003 car with liability to a 2013 car with full coverage and the difference was about $80/mo. This is with a TERRIBLE driving record.

Something doesn't seem right. Find a local independent agent and work with them?

 

[JTK]

I hear you. Makes you wonder if it's real statistical data they base their numbers on, or do they just throw a number out there. Every new vehicle I buy causes my insurance rates to creep up. They never go down.

 

[Mainia]

I went from a 2013 Hyundai Elantra GT 1.8 liter to a 2018 Hyundai Kona AWD turbo and it was only $8 more quarterly. State Farm. But I think they inflated me on average through the years. I bet next year it will be $50 more then the next $50 more.

 

[Johnny2Bad]

It's a method they use to hide the profit in the premium. That way they can advertise certain "logical" practices like basing coverage on the true cost of repair amortized over the fleet of vehicles in the wild, while still using the old tricks to maintain profitability.

 

[alarmguy]

Do at least 4 online quotes from different insurance companies.

Geico, Progressive, esurance and one of your choice.

Let us know how you make out, everyone should do this every year to make sure their current company isnt maximizing profits on your loylaity to them as their loyalty is legally bound to their stockholders for maximum profits.

Mazda 3 is a blast to drive, do you have the Skyactive engine?
Its the highest compression mass produced engine in the world and with Mazda's patents, runs on reg gas.

 

[billt460]

Originally Posted By: DzoG20
Turns out the liability on the 2015 Mazda cost twice MORE than liability on 2000 Nissan !? That's right - I mean liability coverage. Not talking about collision premium due to the car value.....


Insurance of any type is simply risk management vs. cost. Many times that risk is not so easily determined. Sure, we all know why hurricane insurance costs more in Florida than it does in Montana. And why 60 year old obese smokers pay more for health care than 25 year old fitness trainers. But with motor vehicles it's not so clear cut.

Insurance companies feed everything into computers. Makes, models, years, average cost per claim. Average number of claims. Along with where in the country those claims are filed and when. Along with the total combined cost of all of those claims, and what they were paid out for. (Personal injuries, body work, damage to personal and city property, etc.) They also know the average age of the people who drive them. Along with the amount of tickets and violations they have received on average.

They leave absolutely nothing to chance. They can't. From all of this they extract a cost vs. coverage per policy, per vehicle that's dependent on location. Many times it doesn't make sense. Most insurance salesmen and claims adjusters don't have this information at their fingertips. And most wouldn't understand it any better than you would. But you can believe it makes sense to the people who compiled all of it. It had better, because they are the one's writing the checks.

 

[MasterSolenoid]

I can't answer your question, but can only suggest-

Make sure your getting all the Discounts your entitled to on each vehicle.
State Farm gives me a discount called Vehicle Safety Based on the loss experience of the Make and Model.

Edit: Insurance Agents SELL insurance.
It's your responsibility to:
Shop around
Get the right amount of Coverage
Choose your Deductable
Verify all the Discounts

 

[grampi]

What gets me about insurance companies is when they raise everyone's premiums in a given area because there have been more claims in that area. Shouldn't they be raising the premiums of only those who are filing the claims? Why make everyone pay more?

 

[Donald]

It may be a combo of the safety rating of the vehicle and the person likely to buy a particular type of vehicle. A person who buys a motorcycle is probably more of a wild person than the person who buys a Camry.

They sometimes assign a certain driver to a vehicle, and that assignment may not be who actually drives the vehicle.

As other have said, get a few estimates. While GEICO has been good to me, I would switch insurance companies if I found a better price.

 

[wander2039]

Our Focus is $20 higher than the Escape. Same safety features in both. The Festiva is in-between those two but the Dakota is cheaper than Escape... I'm sure it makes sense to computer running the statistics!

 

[billt460]

Originally Posted By: grampi
What gets me about insurance companies is when they raise everyone's premiums in a given area because there have been more claims in that area. Shouldn't they be raising the premiums of only those who are filing the claims? Why make everyone pay more?


No, because they wouldn't be able to raise them enough to make up the difference. For example, after Hurricane Andrew destroyed the bulk of South Florida in 1992, (it wiped Homestead Florida completely off the map), and caused over $27 BILLION in damage. (Keep in mind that was $27 billion in 1992 dollars). If they only raised homeowners insurance to people who were effected by it, they would no longer be able to afford it.

So they raise everyone's rates unilaterally across the country. Remember, insurance involves the spreading of risk. So the more of that risk they can spread, the less per person it amounts to.

It's much the same with drunk drivers, and people who buy fast cars. If you've never driven drunk in your entire life, you're still paying for those who do. And a 65 year old with a perfect driving record who buys a ZR-1 Corvette, will still be saddled with a high premium. Because enough people with bad driving records will buy and wreck them more often.

 

[billt460]

I should add that while you will definitely pay more for homeowners insurance in South Florida, just as you will pay more if you have a DUI or several accidents and speeding tickets on your driving record. The extra all of those people pay is nowhere near enough to completely make up all the difference in the claims they'll likely file over a lifetime. Hence everyone's rates go up across the board.

 

[blupupher]

Was looking at buying a beater car (a '97 Saturn SL1) to teach my kids to drive stick on.
Decided to pass since insurance on it was $59/month just for liability just for me (kids have another year till they get a vehicle).
I pay $113 for full coverage on my '02 F150 and '12 Scion xB.
This was with my current insurer, getting quotes from Progressive and Geiko was a little more (may have been the same if I had bundled).

 

[billt460]

Liability cost is determined by location, along with the age and driving record of the insured person or persons who are the primary operators of the vehicle. The age, condition, and value of the vehicle really isn't much of a factor. Because liability does not cover comprehensive or collision damage. And a cheap, older vehicle can cause as much injury and or damage, as the latest model with all of the latest safety bells and whistles.

 

[Leo99]

Maybe Mazda 3's are involved in a lot of accidents.

Car insurance is crazy in NJ. Same person car and you could get premiums +/- 50% for the same coverage. They are obviously not using the same underwriting criteria.

 

[Pew]

Did your insurance at least lower your premium a few months ago? I know that State farm, Geico, and Progressive all lowered their premiums in Illinois earlier this year, I'm not sure who else.

Younger folks like to buy the Mazda 3, which also tend to result in more accidents for that specific car. IE: Honda Civics are stolen alot more than any other cars, so their insurance tends to be higher for what the car is worth.

 

[StevieC]

I went from a $30K Dodge Journey with the same amount of insurance to a $65K Toyota Highlander and my insurance increased $23/month. I have a five star driving record though and I'm here in Canada so I'm not sure if they base it on different factors even though we are still private insurance system here in Ontario.

That said I'm sure your insurance isn't $240/month like mine is.

 

[StevieC]

I went from a $30K Dodge Journey with the same amount of insurance to a $65K Toyota Highlander and my insurance increased $23/month. I have a five star driving record though and I'm here in Canada so I'm not sure if they base it on different factors even though we are still private insurance.

That said I'm sure your insurance isn't $240/month like mine is.

(My cousin has a DUI and her renewal was $9200 for the year)

 

[Delta]

Wow, I guess I've been fortunate. Went from $60/mo on my old '08 Jetta to around $70/mo for my GTI. There even wasn't that much difference between just liability and full coverage on my S10. Somewhere around $45/mo for full coverage, even though I wouldn't get squat as far as value. Both are on low mileage policies though, something in the 5K a year range.