I don't understand how insurance rates work, but I'll accept it!

"themanwithsauce - has as many vehicles as job titles" (themanwithsauce) 07/17/2017 at 10:27 • Filed to: None

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I pick up the new FoST tomorrow so I went online and got my insurance all settled up to drive it. I purposely needed to have a smaller monthly payment with the FoST to make up for a bit of extra gas useage and (presumably) higher insurance. I was prepared to pay 5-10$/month extra. I am now paying 5$/mo LESS than the FiST.

Now, my FiST is lumped in with the rest of the fiesta lineup. The FoST is its own class, presumably because it gets wrapped around telephone poles and tossed into impound lots. And yet, somehow, the FoST is cheaper. I don’t get it, but I’m not complaining.

Ash78, voting early and often > themanwithsauce - has as many vehicles as job titles 07/17/2017 at 10:32

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I still don’t get why the US doesn’t have “insurance bands” or classes to make this easier. It seems like — both actuarially speaking, as well as for consumers — life would be a lot easier if they just had maybe 10 possible rates for all cars. Then you could add or subtract based on the individual’s driving history, etc. It sure would make car shopping easier, and I guarantee you it could make the insurance companies more profitable/stable and efficient.

This whole notion that I have to call my agent and give her the exact VIN is ridiculous and complex.

themanwithsauce - has as many vehicles as job titles > Ash78, voting early and often 07/17/2017 at 10:34

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It gets even more fun when you get into each state’s individual policies. I live in a no-fault, unlimited medical coverage state. I once got quoted at over 6,000$/yr for insurance for a mustang.

The Crazy Kanuck; RIP Oppositelock > themanwithsauce - has as many vehicles as job titles 07/17/2017 at 10:37

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Where I live Corvettes are cheaper to insure then Civics. The avg driver is older & mature then the avg Civic driver.

BeaterGT > themanwithsauce - has as many vehicles as job titles 07/17/2017 at 10:39

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Same thing happened to me. Z06 less insurance than an Legacy GT? Ok, I’ll take it!

themanwithsauce - has as many vehicles as job titles > The Crazy Kanuck; RIP Oppositelock 07/17/2017 at 10:42

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Huh. Well, I guess I’ll just make sure to keep my perfect record and keep my rates low.

nerd_racing > themanwithsauce - has as many vehicles as job titles 07/17/2017 at 11:04

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That might not even save you, my record is perfect and my rates always seem to creep up every year. I’ve bounced around from insurance to insurance places every 2-3 years as a result. It sucks, but I regularly save $40 a month when I switch.

ITA97, now with more Jag @ opposite-lock.com > The Crazy Kanuck; RIP Oppositelock 07/17/2017 at 11:12

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My Corvette was the cheapest to insure car I’ve ever owned.

OPPOsaurus WRX > themanwithsauce - has as many vehicles as job titles 07/17/2017 at 11:27

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when I had my WRX they listed it as a sedan. I called up my insurance and said its actually a hatchback. They class those as wagons which dropped my insurance cost despite it being the same basic car.

sony1492 > themanwithsauce - has as many vehicles as job titles 07/17/2017 at 11:35

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My minimum coverage was $10 cheaper per month with two cars rather than one. It blew my mind that canceling a car off the insurance made it more expensive

OmerCarrothers333 > themanwithsauce - has as many vehicles as job titles 07/17/2017 at 11:40

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It’s weird, but insurance premium on my GTI was only a couple bucks more over my Accord, but if I had gone with a FiST or a FoST, it would have made my premium several hundred dollars more. I live in Southern California by the way.

bwp240 > Ash78, voting early and often 07/17/2017 at 11:47

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There is sort of a stage system. Premium rates are based off a combination of age and country GDP. Assuming full coverage...

Under 25 = GDP of United States

*if male and red car: GDP of World

26-39: Canada

40-55: Latvia

56-65: Estonia

66+: Montenegro or Algeria (depends on how many things you hit)

TheRealBicycleBuck > themanwithsauce - has as many vehicles as job titles 07/17/2017 at 11:50

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I can provide a little insight. Insurance rates are set by the state, based on actuarial information provided by the insurance providers. The rate is a fairly wide band for each product type and the insured class. Each insurance company decides where they want to be in that band. For example, State Farm or Farmers might choose to be at the high end of the rate band while Geico might choose to be at the low end of that band. They justify their position by the level of service they provide to the customer.

Insurance companies try to segment their market by product type, customer type, and geography. All of this is an attempt to normalize their risk. Product and customer types are pretty easy to understand. Geography plays a role at the bigger level because laws are different in each state. They may also play a role at the local level because of local hazards. For example, rates went up in the Dallas/Fort Worth area after a series of hail storms caused a lot of damage. Rates went up in the Houston area after a series of floods. At one point, Farmers put a moratorium on new policy sales in Texas because they had huge losses in the state.

Classifying product types is a headache for the insurance companies because manufacturers make it difficult. For example, until 2015, the WRX was a model type of the Impreza. The STi was a performance package of the WRX which was a performance package on the Impreza. This is confusing for insurance agents and messes with the actuarial tables. Database updates help clear muddy waters and are one of the reasons agents require a VIN.

Being at a lower price point probably meant that more high-risk consumers purchased the FiST than the FoST. This would drive the prices up. It may also be that there have been more FiST losses in your area. There’s just no telling for sure without digging into their data.

SPAMBot - Horse Doctor > themanwithsauce - has as many vehicles as job titles 07/17/2017 at 14:08

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My Ferrari is cheaper to insure than my 11 year old Beetle ¯\_()_/¯

Chan - Mid-engine with cabin fever > themanwithsauce - has as many vehicles as job titles 07/17/2017 at 14:10

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This year my Honda Accord is the most expensive car on our policy, beating out my wife’s Fiat and my Ferrari (yes, it’s on the same policy). The Honda is by far the cheapest car in current value, which makes no sense.

themanwithsauce - has as many vehicles as job titles > Chan - Mid-engine with cabin fever 07/17/2017 at 14:13

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Relbicyclebuick hinted that the low purchase price can make a car more expensive to insure. So the FoST has a base MSRP of 26k while the fiestas start at 15/16k so my FiST, despite being almost 25k, was lumped in with the commoner filth.

gmporschenut also a fan of hondas > themanwithsauce - has as many vehicles as job titles 07/18/2017 at 19:17

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often its highest risk driver, with safest vehicle in household. wiht the 5 star all around focus vs the s-star side of the fiesta.

gmporschenut also a fan of hondas > Chan - Mid-engine with cabin fever 07/18/2017 at 23:50

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I was seeing an insurance adjuster for a while. She wrote up quotes all day but knew nothing about cars. For unussual or rare cars, their numbers get all screwy, which is why it often mean crazy high premium, or no quote.

FiST of FuRRY > OPPOsaurus WRX 07/19/2017 at 06:22

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I went from a scat pack 6.4 hemi challenger to a WRX and pay nearly the same amount, WHAT IN THE FUCK! A few bad WRX drivers messing it up for the rest of us.

Chan - Mid-engine with cabin fever > gmporschenut also a fan of hondas 07/19/2017 at 13:47

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That really irritates me. Also, rental car office staff who don’t have a basic grasp on how cars work.

At least with insurance it’s all algorithm-driven.