Why are car insurance companies quoting me rates at more than the value of my car?

[snberk103]

..
Not to mention the fact that if you get hit in one of those things you'll probably be dead.

... and not drive a tin can death trap too.
...

Not true. Their safety ratings are very respectable. Don't be fooled by the small size - they incorporate a steel safety cage that uses the other car's crumple zones. Keep in mind that the majority of people never have a collision. For those that do, it's almost always a slow speed one where a Smart Car has excellent protection. If you are one of the unlucky people who get hit by falling Oak trees and speeding fuel tankers, nothing is really going to help.

Our Smart is very reasonable to insure. I note that the OP has quoted on fairly extensive coverage. Raising the deductibles will help bring the cost down.

 

[yg17]

Not true. Their safety ratings are very respectable. Don't be fooled by the small size - they incorporate a steel safety cage that uses the other car's crumple zones. Keep in mind that the majority of people never have a collision. For those that do, it's almost always a slow speed one where a Smart Car has excellent protection. If you are one of the unlucky people who get hit by falling Oak trees and speeding fuel tankers, nothing is really going to help.

Our Smart is very reasonable to insure. I note that the OP has quoted on fairly extensive coverage. Raising the deductibles will help bring the cost down.

Being someone who has walked away from a not so slow speed collision, there's no way in hell I'd want to have that same accident in a Smart car. Even if the Smart car does well in crash tests, my mind would not be at ease being in something that looks like it will crumple like a soda can.

Raising the deductible's not going to offer any significant cost savings. His coverages seem alright (I would personally opt for rental coverage but then again, I live in a city where it's impossible to get around without a car) and there's no magic bullet there that's going to drop his quote to a more reasonable level. When I quoted my insurance, I noticed the difference between $250 and $500 was noticeable, the difference between $500 and $1,000 was negligible. So I stuck with $500. Half of the quote from eSurance is the liability, and that will stay the same no matter what deductible he chooses.

I also wouldn't skimp on bodily injury either - $100,000 is the minimum I'd go with. People are sue happy. I've been sued as a result of an at-fault accident. It's not fun. Thankfully my policy limit ($100,000) more than covered what they were asking for and I didn't pay anything out of pocket.

 

[adk]

To the OP - Are you entering your actual SSN and vehicle VIN when you're getting these quotes? The last time I shopped for insurance I first quoted coverage generically as "Joe Schmoe." Later, once I got serious and entered my actual detailed information the rates quoted were lower.

Although when I was a 24 year old living in Chicago I was quoted something like $600 per month for a Toyota Corolla, so it may just be entirely the product of where you live.

 

[zioxide]

Not true. Their safety ratings are very respectable. Don't be fooled by the small size - they incorporate a steel safety cage that uses the other car's crumple zones. Keep in mind that the majority of people never have a collision. For those that do, it's almost always a slow speed one where a Smart Car has excellent protection. If you are one of the unlucky people who get hit by falling Oak trees and speeding fuel tankers, nothing is really going to help.

Our Smart is very reasonable to insure. I note that the OP has quoted on fairly extensive coverage. Raising the deductibles will help bring the cost down.

They might get decent ratings but I still wouldn't trust the thing. The only time I've ever been in a car in an accident I was in the back seat, sitting at a red light, and we got rear ended by a drunk driver going over 40 mph. Pushed us 250 feet through the intersection. If we were in a little smart car, we probably would have all been dead. But we were in a newish Camry (08-09ish) and we all walked away without a scratch.

They also just look like they wouldn't be very stable at highway speeds. A few months ago I was driving home on the highway at about 1am and all of a sudden a deer appeared about 30 feet in front of me right off my right bumper. Luckily my car handles amazing, is low to the ground, and has symmetrical AWD so I swerved right around the thing and missed it by what seemed to be about 5 feet. Having driven a couple of vehicles that are box-shaped like that smart car, I'd be willing to bet if you tried to do that in one of those it would end up tipping and rolling over.

I just personally wouldn't trust the thing and they don't seem very practical either.

Also, see here: http://usatoday30.usatoday.com/money/autos/2009-04-14-big-cars-safer_N.htm

Buyers choosing the smallest cars for low price and high gas mileage could be endangering themselves and their passengers, says a major auto-safety researcher.
In new crash tests, the Insurance Institute for Highway Safety rammed three automakers' smallest cars into their midsize models. Although the small cars had passed other IIHS tests, they flunked in collisions with larger but still-fuel-efficient sedans. "The safety trade-offs are clear," IIHS President Adrian Lund says. "There are healthier ways to save gas."

IIHS, funded by auto insurers, usually crashes cars into stationary barriers at 40 miles per hour. This time, it was car into car, each going 40 mph.
....
• Fit vs. Accord. The Fit crash-test dummy registered severe leg injuries. The dummy's head also slapped through the air bag and whacked the steering wheel.

• Toyota Yaris vs. Camry. Yaris nearly lost a door. Its driver's seat tipped forward. The dummy's head hammered into the steering wheel.

• Daimler Smart vs. Mercedes-Benz C-Class sedan. IIHS says the Smart "went airborne and turned around 450 degrees … a dramatic indication of the Smart's poor performance, but not the only one." Much of the interior was shoved into the crash dummy "from head to feet."

They just aren't worth it when you can get an Impreza or Civic for the same price, get the same gas mileage, have way more passenger and storage space, and be way safer.

Also, I know my posts in this thread have been pumping up the Subaru's a bit, but since the OP was originally about insurance costs, it's worth noting that the symmetrical AWD in all Subaru's (except the new BRZ) is actually considered a safety feature by insurance companies and you actually get a small discount because of it.

 

[snberk103]

Being someone who has walked away from a not so slow speed collision, there's no way in hell I'd want to have that same accident in a Smart car. ....

They might get decent ratings but I still wouldn't trust the thing. ..

Trying not to derail this to much into OT... but when you look at the numbers, you are 3 times as likely to be injured or to die in a household accident (falling off ladder, in the bathtub, etc) than in car accident. SUVs are more dangerous due to their tendency to roll over. Smart Cars have a computerized stability system to prevent roll-overs... so dodging deer is no problem... even on wet slick roads. I live in deer country, and I have personal experience with this. They are fine on the highway... we take road trips all the time. So, go ahead and make your judgements based on how you feel. But when I look at the numbers, and the likelihoods of various real scenarios... I'm quite happy with the Smart.

What does make a difference, and this applies to the topic, is how much highway speed vs non-highway driving is involved in the commute. One thing that does make the Smart hard on the highway is a taut suspension... it can get a bit tiring if the roads are rough and you're driving at speed. If you are driving mostly country or city than a Smart can be very good. They were designed as an urban car primarily.

The comments about coverage I will assume are accurate as I am in British Columbia and the insurance coverages are different here. I will note though, that on a Smart Car I'm paying about $750 a year, and that includes some premium add-ons. However, I am far past 25 and I'm not in a city.

 

[puma1552]

Yup. I actually test drove a 13 Passat TDI with my grandfather a couple of weeks ago. They get upwards of 50 on the highway.

Keep in mind though, diesel (at least near me) is 60-70 cents more expensive per gallon than 87 octane gasoline.

My grandfather is trying to choose between the Passat TDI and the '13 Accord. We did the calculations, and taking into account the extra cost of the TDI (about 1400 more than the Accord v6) it would take him 12 and a half years to start actually saving money.

They're great cars no doubt, and the diesel engines are great (so is getting 800 miles on a single tank), but don't fall into the trap of "It gets 45-50mpg" without realizing that it's also going to cost you more each time you fill up the tank. You need to drive ALOT to actually realize the savings with the diesel.

Agreed, depends where you live. For years and years here, diesel was cheaper and now it's more expensive, but not much. Diesels are definitely best if you have a long commute where the diesel can really warm up and shine...won't utilize it as much on lots of short trips.

That said, I'd still take a diesel Jetta/Passat/Whatever over a smart car. Even a Jetta or Passat will probably still get better mileage even on short trips and won't be a laughable deathtrap.

 

[acearchie]

Have you considered adding someone else to your insurance? Worked out cheaper for me here in the UK.

I put my dad on the insurance as a named driver and I saw a drop in the price than if I had just insured it myself. It seems if you add someone seen as being responsible 15+ years NCD in my case then it works out cheaper.

 

[prostuff1]

I don't believe that is the case. There is very specific language in the policies insurance companies issue. If there is a large claim made on the policy the insurance company looks for reasons to not pay it out... and invalid residency declarations are an easy excuse. So, you end up paying a huge amount in premiums... for no coverage. Which can bankrupt the driver - and the parents if the driver has put someone into hospital due to negligence.

Plus now the parents may get audited by the IRS to confirm residency/dependant status.

All i know is that I was covered under my parents policy until I was basically graduated from college. My permanent address was not at home where my parents live.

I think the thing that might have "saved" us was that the vehicle I was driving was actually registered to my dad. I technically paid for it but when we wne to get plates and the like for it my dads name was the one we used for the paperwork.

 

[snberk103]

All i know is that I was covered under my parents policy until I was basically graduated from college. My permanent address was not at home where my parents live.

I think the thing that might have "saved" us was that the vehicle I was driving was actually registered to my dad. I technically paid for it but when we wne to get plates and the like for it my dads name was the one we used for the paperwork.

I know that there are options to do this. And it doesn't really matter in your case as your situation has now changed. And I'm sure you folks had it all sorted properly.

But.... at least as far as ICBC is concerned.... the factor that they look at is who is the primary driver, and where does that driver live. They don't care whether someone is listed as a dependent on a tax form, as long as the primary driver is listed correctly. ICBC are also very happy to take premiums... for years... even if the situation is not exactly as described. That is ... if they don't know that there was a false declaration. But... if someone makes a claim, and they notice that the primary driver listed was not the driver at the time ... they will start looking into it. And if they decide that a false declaration was made then they will - at a minimum - deny the claim on the basis that there was no valid insurance. Not so bad if the claim was for a couple thousand dollars. But imagine if the collision injured someone seriously. Having an invalid insurance policy could bankrupt someone.

 

[Dr McKay]

Lots of my students are being quoted £4000 for a £200 car, 3rd party fire and theft. They can reduce their insurance a lot though by having a black box fitted.

Something needs to be done, as it is ageism, pure and simple..... There was a similar problem with females being quoted much less than males over here, but all that happened was that female quotes went up to the same price as male quotes

I'm afraid the same scenario exists in the UK...Younger drivers are being hammered by Insurers...It's a total catch 22...You can avoid the high charges by going on your parents insurance, but you gain no NCB if you do it that way...Truth is that somewhere down the line you have to take the hit.

My biddies 25 year old drives an old Audi...Nothing racy, just a 2 door diesel...They wanted 5 times the value of the car to insure him third party only.

Seems that this will only change when you pass the age of 26.

Damn, Im 22, my first car cost me £2000 and I was quoted £1500 a year to insure it.

 

[0dev]

Black boxes don't really reduce your quote much at all once you consider the cost of getting the box itself fitted (over £300 in most cases). I looked into this myself before and saw no real benefit.

 

[sim667]

My first car I got for free, and they wanted £1300 to insure it (I got them to insure it for £500 valuation in the end).....

That was in 1999, its so much more horrific now.

I caught a student looking at an Audi A3 1.8 today worth about 10K, he was under the impression they'd insure him on it for £2k...... he's only 17.

I pointed out that the quote he'd got was for 3rd party, and insuring it like that was a massive risk considering he probably will have a crash in his first year.

In all fairness with another freind who did start driving recently, he found his premium went down when he added females as named drivers, regardless of the fact that the policy is in his name.

 

[yg17]

In all fairness with another freind who did start driving recently, he found his premium went down when he added females as named drivers, regardless of the fact that the policy is in his name.

This has always bothered the hell out of me. How is it not discrimination to charge males more? If they were to charge Asians more because stereotypically, they're bad drivers, or charge black people more because stereotypically, they're more likely to be in the ghetto where their car could get stolen, there would be a *****torm, and rightly so. I never understood why it's OK to charge males more, because stereotypically, we're more likely to street race or something.

 

[eric/]

This has always bothered the hell out of me. How is it not discrimination to charge males more? If they were to charge Asians more because stereotypically, they're bad drivers, or charge black people more because stereotypically, they're more likely to be in the ghetto where their car could get stolen, there would be a *****torm, and rightly so. I never understood why it's OK to charge males more, because stereotypically, we're more likely to street race or something.

No I think they actually have the stats, but they could also have the stats saying "oh you're Asian and Asians drive worse, etc...". So I agree that they are being discriminatory, but they also have stats to back it up.

 

[robbieduncan]

This has always bothered the hell out of me. How is it not discrimination to charge males more? If they were to charge Asians more because stereotypically, they're bad drivers, or charge black people more because stereotypically, they're more likely to be in the ghetto where their car could get stolen, there would be a *****torm, and rightly so. I never understood why it's OK to charge males more, because stereotypically, we're more likely to street race or something.

Gender based pricing was made illegal in the UK due to EU rules. The result was predictable: prices for males did not come down, prices for females went up a lot.

 

[eric/]

Gender based pricing was made illegal in the UK due to EU rules. The result was predictable: prices for males did not come down, prices for females went up a lot.

Works for me

 

[sim667]

This has always bothered the hell out of me. How is it not discrimination to charge males more? If they were to charge Asians more because stereotypically, they're bad drivers, or charge black people more because stereotypically, they're more likely to be in the ghetto where their car could get stolen, there would be a *****torm, and rightly so. I never understood why it's OK to charge males more, because stereotypically, we're more likely to street race or something.

They're not allowed to do it in the UK now

Cue lines of pissed of females as their insurance costs went up to the same as males

 

[snberk103]

This has always bothered the hell out of me. How is it not discrimination to charge males more? If they were to charge Asians more because stereotypically, they're bad drivers, or charge black people more because stereotypically, they're more likely to be in the ghetto where their car could get stolen, there would be a *****torm, and rightly so. I never understood why it's OK to charge males more, because stereotypically, we're more likely to street race or something.

Because the statistics backed them up. Young male drivers were very very more likely to have a serious accident injuring others. There is also no question, with very few exceptions, about whether you are male or female.

Your other "stereotypes" are not based on science, but simply on prejudices. Meaning there are no stats that show a significant risk based on meaningless distinctions that are hard to determine in the any case.

I believe gender neutral insurance pricing is also in effect in BC. But I don't know for sure, or care. What is interesting is that they have gone to a graduated licensing system with decals. For the first period of time (I think a year) a 'learning' driver has some very strict conditions about who can be in the car, and must display an ' L ' on the their car. Then the conditions loosen somewhat, and they have to display an ' N ' on the car for a while. After that they get a full license.

Cops here started putting an L or N decal on unmarked cars, and starting writing a lot of tickets. Seems that there are a lot of people who like to give new drivers a scare. And who don't recognize an unmarked cop car even when they are right next to it.

 

[ender land]

Make your deductibles higher.

Save the difference into a savings account (presumably if you have a 2013 smartcar you have some serious money available) so you have the money available should something happen.

 

[eric/]

Because the statistics backed them up. Young male drivers were very very more likely to have a serious accident injuring others. There is also no question, with very few exceptions, about whether you are male or female.

But that's stereotyping. I'm a young male driver. No accidents yet. What then? Should the insurance company reimburse me for their mistaken assumption?

Your other "stereotypes" are not based on science, but simply on prejudices. Meaning there are no stats that show a significant risk based on meaningless distinctions that are hard to determine in the any case.

How do you know? I'm willing to bet there is a treasure trove of data

 

[snberk103]

But that's stereotyping. I'm a young male driver. No accidents yet. What then? Should the insurance company reimburse me for their mistaken assumption?



How do you know? I'm willing to bet there is a treasure trove of data

Not going to bite. I believe you know about stats.

 

[dukebound85]

But that's stereotyping. I'm a young male driver. No accidents yet. What then? Should the insurance company reimburse me for their mistaken assumption?



How do you know? I'm willing to bet there is a treasure trove of data

Statistics based on an age group is quite different than stereotyping (where no foundation exists for the claim being made)

 

[eric/]

Statistics based on an age group is quite different than stereotyping (where no foundation exists for the claim being made)

No, it's stereotyping just the same, it's age discrimination.

And those foundations probably do exist. Insurance companies have alot of data.

 

[dukebound85]

No, it's stereotyping just the same, it's age discrimination.

And those foundations probably do exist. Insurance companies have alot of data.

There are many factors that go into insurance premiums. The fact that our age group is, on average, more apt to cause damages, it is perfectly reasonable to charge appropriately

The good news? That is not the only factor considered and your driving record is taken into account.

Are you against higher health insurance/life insurance premiums for older people? I mean after all, even though the stats say they use more disproportionately more health resources, it is age discrimination right?

What about higher insurance rates for those that drive high performance vehicles? against that too?

What do you propose? Why are you against the use of data to help formulate premiums?

 

[malman89]

What do you propose? Why are you against the use of data to help formulate premiums?

It's just because he's such an upstanding citizen and driver, he believes he deserves an exception in his insurance premium. The problem with this is so would everyone else regardless of whether they deserve it or not.

I guess eric/ should consider an insurance provider like Allstate that markets lowering rates for safe driving.

I'm still stuck in one of the inflated insurance rate age brackets myself and am a safe driver, but I fully understand why I have to pay a slight premium to be insured. The eventual dip in my premium will be the payoff for years of safe driving.