Can someone please explain the stupidity present in Car Insurance!!

[mAdD INDIAN]

We were previously looking at a 98 GS300 for the family car. However we spotted a MINT 94 LS400 in the process and decided to go for that. We put down the deposit and all that jazz.

Anyway, so my dad decided to check the insurance on that car. It turns out that the 94 Lexus LS400 costs $100 MORE PER MONTH than the 98 Lexus GS300.

How does that work when the LS400 is almost half the price of the GS300 (the sales price that is)!!! The insurance company's risk on the LS400 is less than that on the GS300 since the LS costs only $16k while the GS costs $30k, so therefore the premiums should be less. Should the car get totalled, they would only pay us $16k on the LS400 rather than $30k on the GS300, which should be reflected in the cheaper insurance payment.

Man this LS was a MINT car...very very low mileage....

 

[jemcam]

Maybe it costs more to repair those cars, or the parts prices are more expensive. Maybe it has a higher incident of injuries in that car. A multitude of factors could be taken into account.

 

[edmicman]

insurance sucks....don't even bother.

 

[Quixfire]

It also could be the engine, some insurance compaines charge extra based on the performance or size of the engine, V8 or Turbo.

 

[conjur]

Theft rate is a big influence. More LS models were sold than GS so there's a greater black market for it, I reckon.

 

[mAdD INDIAN]

Originally posted by: jemcam
Maybe it costs more to repair those cars, or the parts prices are more expensive. Maybe it has a higher incident of injuries in that car. A multitude of factors could be taken into account.

But assuming the car gets totalled (which is there biggest concern), the ins company would pay the market price on the car (LS400), which is much less than the GS300.

 

[mAdD INDIAN]

Originally posted by: conjur
Theft rate is a big influence. More LS models were sold than GS so there's a greater black market for it, I reckon.

Ok fine. Assume it was stolen. The insurance company WOULD ONLY PAY $18k whereas if it were the GS300, they would pay me $30k. However the LS400 still has a higher insurance!

 

[Spac3d]

I don't understand it myself. The insurance on our ES was $200 more every 6 months than a Landcruiser, but it costs $20,000 new (both new when we bought them, same year). We didn't understand.

 

[conjur]

Originally posted by: mAdD INDIAN

Originally posted by: conjur
Theft rate is a big influence. More LS models were sold than GS so there's a greater black market for it, I reckon.

Ok fine. Assume it was stolen. The insurance company WOULD ONLY PAY $18k whereas if it were the GS300, they would pay me $30k. However the LS400 still has a higher insurance!

No...if the theft rate is higher for the LS than the GS, the insurance companies pay out more often, hence, a higher rate on that model.

 

[mAdD INDIAN]

Originally posted by: conjur

Originally posted by: mAdD INDIAN

Originally posted by: conjur
Theft rate is a big influence. More LS models were sold than GS so there's a greater black market for it, I reckon.

Ok fine. Assume it was stolen. The insurance company WOULD ONLY PAY $18k whereas if it were the GS300, they would pay me $30k. However the LS400 still has a higher insurance!

No...if the theft rate is higher for the LS than the GS, the insurance companies pay out more often, hence, a higher rate on that model.

hmmm...makes sense. I would hate to drive a Prelude then! (epecially in Toronto where they have a VERY high theft rate).

 

[Viperoni]

Originally posted by: mAdD INDIAN

Originally posted by: conjur

Originally posted by: mAdD INDIAN

Originally posted by: conjur
Theft rate is a big influence. More LS models were sold than GS so there's a greater black market for it, I reckon.

Ok fine. Assume it was stolen. The insurance company WOULD ONLY PAY $18k whereas if it were the GS300, they would pay me $30k. However the LS400 still has a higher insurance!

No...if the theft rate is higher for the LS than the GS, the insurance companies pay out more often, hence, a higher rate on that model.

hmmm...makes sense. I would hate to drive a Prelude then! (epecially in Toronto where they have a VERY high theft rate).

I could buy 3 of my car every year if I used my insurance premium.
91 Mercury Topaz... $4000 (insurance, not car value ).
Now regarding stealery... who would steal a Topaz?

 

[mAdD INDIAN]

Originally posted by: Viperoni

Originally posted by: mAdD INDIAN

Originally posted by: conjur

Originally posted by: mAdD INDIAN

Originally posted by: conjur
Theft rate is a big influence. More LS models were sold than GS so there's a greater black market for it, I reckon.

Ok fine. Assume it was stolen. The insurance company WOULD ONLY PAY $18k whereas if it were the GS300, they would pay me $30k. However the LS400 still has a higher insurance!

No...if the theft rate is higher for the LS than the GS, the insurance companies pay out more often, hence, a higher rate on that model.

hmmm...makes sense. I would hate to drive a Prelude then! (epecially in Toronto where they have a VERY high theft rate).

I could buy 3 of my car every year if I used my insurance premium.
91 Mercury Topaz... $4000 (insurance, not car value ).
Now regarding stealery... who would steal a Topaz?

That's INSANE! A Topaz is worth all of $3k maybe..!

 

[BigSmooth]

Trying to figure out car insurance rates is only going to make your head hurt.

I imagine there are huge, complex actuarial tables that factor in just about EVERYTHING to determine the rate.

 

[Demon-Xanth]

Next time around, I'm going to double check mine. I think they listed mine as a half ton. Although not totally inaccurate (given the 1450LB payload, and the same engine, transmission, and rear end as the 1500 Ram), the compact class is cheaper to insure.

 

[TwinkleToes77]

Originally posted by: mAdD INDIAN

Originally posted by: Viperoni

Originally posted by: mAdD INDIAN

Originally posted by: conjur

Originally posted by: mAdD INDIAN

Originally posted by: conjur
Theft rate is a big influence. More LS models were sold than GS so there's a greater black market for it, I reckon.

Ok fine. Assume it was stolen. The insurance company WOULD ONLY PAY $18k whereas if it were the GS300, they would pay me $30k. However the LS400 still has a higher insurance!

No...if the theft rate is higher for the LS than the GS, the insurance companies pay out more often, hence, a higher rate on that model.

hmmm...makes sense. I would hate to drive a Prelude then! (epecially in Toronto where they have a VERY high theft rate).

I could buy 3 of my car every year if I used my insurance premium.
91 Mercury Topaz... $4000 (insurance, not car value ).
Now regarding stealery... who would steal a Topaz?

That's INSANE! A Topaz is worth all of $3k maybe..!

Why would you even still have full coverage on a 91 car?

 

[jemcam]

Originally posted by: mAdD INDIAN

Originally posted by: jemcam
Maybe it costs more to repair those cars, or the parts prices are more expensive. Maybe it has a higher incident of injuries in that car. A multitude of factors could be taken into account.

But assuming the car gets totalled (which is there biggest concern), the ins company would pay the market price on the car (LS400), which is much less than the GS300.

Paying for repairs or for total losses aren't what cost insurance companies the big money. The big cost is in bodily injuries. Property damage is a drop in the bucket compared to medical costs.

 

[40oz]

are to two cars different colors? if they are, I have heard that the color of cars has some thing to do with the rate of ins. example red is the most expensive car to own

 

[amnesiac]

Among other things, the insurance companies factor in the following.

1) Safety ratings
2) Cost to repair/replace
3) Accident histories
4) Theft likelihood

They use what's called "the law of large numbers" - a statistical average of the thousands upon thousands of cars and their involvement in such factors. It's not just the cost of repair/replacement.

 

[ElFenix]

what i don't get is why a 350Z is the same a month as a sentra, but a mustang is double that.

 

[XZeroII]

It also has to do with risk. They may have found that people with the 94 were more reckless than the people with the 98. They may have had 1000 claims for the 98 in a given year, but 3000 claims for the 94. They look at a lot more than just the value of the car.

 

[CurtCold]

Originally posted by: amnesiac
Among other things, the insurance companies factor in the following.

1) Safety ratings
2) Cost to repair/replace
3) Accident histories
4) Theft likelihood

They use what's called "the law of large numbers" - a statistical average of the thousands upon thousands of cars and their involvement in such factors. It's not just the cost of repair/replacement.

Even engine size is becoming irrelavent, except for sportscars eg. Viper, Vettes etc.

Geo Trackers have some of the highest insurance rates I've seen, for their value. Alot of suv's are hiher rated because of roll overs, and theft. Get a car you don't have to carry full coverage on, and don't worry about it

Bought 97' Nissan in 98, had 10K miles on it.
truck cost about 9K
Insurance Premiums for 4 1/2 years for me. $~6K
Never had a wreck or claim *knocks on wood
So basically I paid chrysler financial, and the insurance co for my truck.

Full Coverage sucks!

 

[UF Jspec]

Maybe one is rated as a sports car. I think 2 doors classifies it as a sports car sometimes.

 

[glugglug]

Here's my theory:

Car companies pay the insurance companies to charge extra to insure older vehicles to encourage people to buy new cars.

My ex-roommate had an early 80's Honda he bought for $100 and paid over $3K/year in insurance on.

 

[glugglug]

Originally posted by: 40oz
are to two cars different colors? if they are, I have heard that the color of cars has some thing to do with the rate of ins. example red is the most expensive car to own

Red cars end up with more expensive insurance only because they get more tickets. I have gotten 7 or 8 tickets when driving red vehicles, 2 of those on a red bicycle!, while NEVER getting a ticket in a vehicle any other color. (The majority of my driving has been in a grey bonneville, a large portion of that at well over 100MPH).

 

[amnesiac]

Originally posted by: glugglug

Originally posted by: 40oz
are to two cars different colors? if they are, I have heard that the color of cars has some thing to do with the rate of ins. example red is the most expensive car to own

Red cars end up with more expensive insurance only because they get more tickets. I have gotten 7 or 8 tickets when driving red vehicles, 2 of those on a red bicycle!, while NEVER getting a ticket in a vehicle any other color. (The majority of my driving has been in a grey bonneville, a large portion of that at well over 100MPH).

Color has nothing to do with it.

http://www.aaa-low-cost-auto-insurance-rates.com/Myths.htm

Like I said, companies look at the long term factors which can affect loss.
Their sole purpose is to transfer the risk from the car owner to the insurer.
As such, the only factors considered in the ratings are factors that would propose an increase in the risk of a claim. Again:

1) Car make, model, year
2) Car safety record
3) Accident history
4) Claim history
5) Driver record

etc.

I work in the insurance industry. There's nothing "underhanded" about the underwriting.
The problems are usually with those making claims.