How are Auto Insurance Rates Determined?
Auto insurance is definitely somewhat of a mystery. Most policy owners don't really understand how their car insurance rates are determined. They simply provide an agent or Web site their driving records, some other personal information like age and sex, and the make and model of their cars. The agent or car insurance quote generator takes this information and then spits out a price. This price is determined by a number of different factors, including what kind of car you own.
Car Insurance Rates Explained
Auto insurance companies set their premiums based on two large factors: the probability you will get into an accident, and what it will cost them if you do. Your age, sex, and driving record help them determine how safe a driver you are, and the type of car you own tells them how much it will generally cost to fix.
Popular Cars with Higher Auto Insurance Rates
Of course people that own luxury cars aren't going to find low cost car insurance. For example, Insure.com reports that cars like the Lamborghini Muriélago Roadster and Rolls Royce Phantom cost a fortune to insure (approximately $300,000). But surprisingly some affordable cars can be much more expensive to insure than others in the same price range. Insure.com recently ranked the ten most expensive cars to insure out of the 20 most popular vehicles sold in the U.S. Here are the results:
2. Chevrolet Cavalier
3. Nissan Altima
4. Ford Focus
5. GMC Sierra
6. Ford F-Series Pickup
7. Chevrolet Silverado
8. Dodge Ram
9. Toyota Camry
10. Honda Accord
As you can see, the top four cars on the list are all smaller-sized. Smaller cars, when hit by larger, heavier cars, generally sustain more damage and thus cost more to fix. Among the smaller cars on the list, many of them are foreign made. Foreign parts generally cost more that those that are made domestically. It's not too hard to rationalize why so many pickup trucks would be on this list. Those who buy pickup trucks are generally tougher on their vehicles.
Source: Insure.com