How Does My Car Model Affect My Premium?

January 27, 2012

Car insurance companies set their rates for auto coverage based the car model you own, plus several other factors. Understanding these factors can have a substantial impact on what car you choose to lease or purchase if you are looking for a new car.

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Car Rating

What many consumers do not know is that the auto insurance industry has their own organization called the "Insurance Services Office" that provides a rating system for every single car that is available on the market today. This organization rates cars from 1 to 27, based on purchase price, safety rating, accident rates and any other factor that might contribute to how much it costs an insurance company to provide coverage for that particular car model. The higher the car rating--1 being low and 27 being high--the higher the premium the insurance company will charge the consumer.

Safety Rating

Another major factor that affects auto insurance premiums according to car model is the rating from the Insurance Safety Car Crash test and governmental crash test. The more poorly a car performs on these various safety tests, the higher the premium will be for that car. If a car is expected to inadequately protect passengers and drivers from accidents, then the carrier can anticipate that accidents will not only cost them the money to repair the vehicle, but also additional medical costs and lost wage claims. Additionally, other costs for the insurance company may include accidental death and dismemberment claims.

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Car Value

The more expensive a car is to purchase, the more likely it is that the insurance premium will also be correspondingly high. In good part this is because expensive cars are expensive to repair. It will cost substantially more to repair a Cadillac than it will to repair a Ford.
Not only is the overall cost of the car part of the consideration when it comes to premiums and cost, but also the cost of parts that are commonly damaged in collisions or as part of routine car use. For example, a particular car may be prone to requiring a fender panel replaced when a car is in a front end accident, but may also typically need the hood replaced and even a passenger or driver side door replaced if the car tends to entirely buckle for this type of accident.

For an insurance company, the more parts that need to be replaced and the more expensive those parts are the higher premium they need to charge in order for coverage to be cost effective for their business.

Typical Drivers for Specific Car Models


While you may not be the typical driver for the car you have in mind, car insurance companies base premium rates on actuarial data from claims. This means that if the typical driver for a specific car is a 23 year old single male, then insurance rates will partially be based on what claims for that car often cost for the insurance carrier. The higher risk driver that is associated with a car model, the higher the premium rate that a car insurance company will probably charge for that car, regardless of who is actually driving the car.

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