Car Insurance Costs: The Role of Vehicle Safety and Performance

For better or for worse, our world is full of cars: big ones, little ones, electric ones, ancient ones, and fresh-from-the-factory models with paint so shiny you can see your face in them. Needless to say, with so much variety on the roads in Florida, not all cars are created equal. Consequently, the cost to insure a 1973 Volkswagen Superbeetle will be considerably different than that to insure a 2012 Mercedes Benz.

Thinking of buying a car? You probably know that insurance companies use several rating factors to determine the cost of coverage. Companies calculate these rating factors to figure out how much to charge for each individual policy. There are ratings that reflect a driver's age, locale, and even gender. If you are a 16-year-old driver in metropolitan Los Angeles, you'll likely be deemed statistically more likely to have an auto accident than if you are a 40-year-old mom driving in rural Montana.

And, naturally, the more expensive the vehicle, the more you can expect to pay for car insurance. However, whether a car is used or new, there is another main factor that significantly influences the cost of insurance: vehicle safety.

Safety

The safer your car is, the less you will pay for auto insurance. Every car is assigned a vehicle safety rating, and auto insurance companies take these ratings into account, just as they do a driver's age and location. Safety ratings are determined by different companies and organizations, the most prominent of which is the Insurance Institute for Highway Safety (IIHS). A safety rating is essentially a way of translating a vehicle's success in two areas: Prevention and Performance.

Prevention

Specifically, a rating reflects how well a vehicle can prevent, or avoid, an accident as well as how well it performs in the event that it does crash. The IIHS even gives annual awards to the most highly rated vehicles. Top safety picks for 2012 include the Chevrolet Cruze, Toyota Prius, Jeep Grand Cherokee, and Volkswagen Toureg, among many others. Check out www.iihs.org to see if your car-or the car you are thinking about purchasing-made the list. If so, you should feel satisfied for two reasons: you'll be safer when you drive and, chances are, you will also save a bit on auto insurance.

Performance

There is another type of "performance" that auto insurance companies consider when determining the cost of coverage, which is distinct from how well a vehicle performs in the event of a crash. This type of performance refers to such factors as road handling, acceleration and deceleration. "High performance sports cars" -those speedy, seductive vehicles that are known for being a thrill to drive-tend to be more costly to insure than, say, mom's 1995 Ford Taurus. So, if you have your eye on a new Porsche, expect to pay a higher monthly premium in exchange for its satisfying performance.

For more information about the cost of your auto insurance policy, contact Insurance Wagon today.