Why Safer Cars Don’t Lead to Cheaper Car Insurance

It has been common knowledge to people for years that if you have a car with a good safety rating that you will get a better deal on your insurance. If you consider only the safety rating, and nothing else, then this would be true.

Unfortunately, that is not all that they look at. In fact, there are other aspects that they judge more harshly. Let us take a deeper look into the other aspects of your life that will explain why a safer car does not guarantee cheaper auto insurance, although it helps.1. Driving Record

This is the most impactful thing that they will use to determine a risk number to assign to you. If you have a good, long driving record then this will not be as crucial as it would be for someone that has marks against them. If you get into an accident or two, or even get some tickets, it will increase your premium no matter if you drive a tank. The higher that your risk number is, the more your premium will be. Period.2. Policy Specific

One thing that you need to realize is that to come up with your risk number your information is typed into a program that is made up of advanced mathematical equations. All factors that affect your cost will be analyzed by a computer and then it will spit out a number. The risk number you are assigned will place you in a bracket of plans available to you, and what cost they will be. Not all carriers will consider any safety rating scores that your vehicle may have. The best way to shop for auto insurance is to see if the company that you are going through gives you discounts for safety.3. Reversed

The one thing that may not make any sense to you might be how some companies use safety ratings to factor out a premium amount. If the car has some bad marks against it the insurance company will use it against you. It is kind of backwards, but that is the way that it works. Anything negative that comes up will be used against you, while the good may not.4. Repairs

Another huge thing that the carrier will consider is the cost of repairs or replacement for your car. If you have an expensive car, such as a Ferrari, all the safety features in the world will not give you a low premium. The more that an automobile costs to repair or replace, the higher the premiums will be. This also applies to luxury cars, compact cars, electric cars, and any others that are costly to repair. 5. Technology of Today

You would think that with all the advancements made on technology and safety that a newer car would have lower premiums. Even though this is a sound thought, it is not the case. The higher tech that a car has, the more it will cost to repair. Once again, the cost that the insurance company may have to pay out is more important than how safe the car is. 

Money talks in the insurance world. It is how they stay in business. The premiums cover their costs, hopefully giving them a small profit. The reason that they are in business is to make money so if they must pay a claim that they undercharged for they will go in the hole. For an insurance company that means money out of the pockets of the shareholders and owners. Not an effective way for them to operate.



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