How Car Insurance Companies Determine Insurance Rates

Insurance rates are based on more than your car's price tag and include repair costs, if thieves like your car, and new-fangled safety features.

· 

by

Owning a Mercedes-Benz or BMW may be part of the American Dream, but generating the bucks to buy such a prize is difficult enough without adding in the extras of car ownership, like insurance. When you’re buying a new car, the least exciting part is almost always the insurance. Heated seats? Yes, please! Figuring out insurance premiums? No, thanks. Unfortunately for your “ugh” factor, insurance premiums play a pretty key part in determining if you can afford the car you want. While it’s not shocking that a Mercedes tops the list of most-expensive cars to insure and a Ford Edge is at the bottom of that list, knowing how different car makes affect insurance rates puts you in the driver’s seat when searching for your next new car. Bear in mind that car insurance companies take into consideration a whole host of factors when it comes to setting premiums, with the make playing a big factor in this process.

Car insurance companies focus on repair costs, how likely a car is to be stolen, and, primarily, on the make of the car when setting premiums. In the article below, Part 1 reveals how owning an expensive car plays a role in determining your insurance rates, Part 2 lists the most and least stolen makes and models of car, and Part 3 details the deadliest and safest makes and models of cars and how that plays a part in setting your rates.

Part 1 of 3: What are the most expensive and least expensive cars to insure?

The more expensive a car, the more it costs to fix and replace its parts, which means that insurance companies end up paying more to repair a luxury car versus a standard family vehicle. Because a Maserati costs substantially more to fix compared to a Subaru, the insurance rates on the Maserati will be much higher than the Subaru. Go figure!

The chart below, from Insure.com, outlines the most-expensive cars to insure, with the Mercedes S65, Dodge GTS Viper, and Maserati Quattroporte GTS topping the list.

<style type="text/css"> .tg {border-collapse:collapse;border-spacing:0;} .tg td{font-family:Arial, sans-serif;font-size:14px;padding:10px 5px;border-style:solid;border-width:1px;overflow:hidden;word-break:normal;} .tg th{font-family:Arial, sans-serif;font-size:14px;font-weight:normal;padding:10px 5px;border-style:solid;border-width:1px;overflow:hidden;word-break:normal;} .tg .tg-m4gj{font-weight:bold;font-size:20px;background-color:#0d202f;color:#ffffff;text-align:center} .tg .tg-s6z2{text-align:center} .tg .tg-baqh{text-align:center;vertical-align:top} .tg .tg-hgcj{font-weight:bold;text-align:center} </style>

Most Expensive Cars to Insure
Make/Model Average Annual Premium
Mercedes S65 AMG (convertible) $3,835
Dodge GTS Viper $3,779
Mercedes S63 AMG 4Matic (convertible) $3,624
Maserati Quattroporte GTS $3,547
Mercedes S550 (convertible) $3,502
Mercedes C43 4Matic (convertible) $3,418
Mercedes Maybach S600 $3,355
Mercedes SL65 AMG (convertible) $3,322
Nissan GT-R Nismo $3,313
Audi R8 5.2L V10 Quattro $3,267
BMW M6 Gran Coupe $3,211
Audi S8 4.0T Quattro Plus $3,208
Audi RS7 Quattro Prestige $3,176
Mercedes AMG GT $3,164
Mercedes C300 (convertible) $3,157
Mercedes S600 Bi-T $3,111
Porsche Panamera Turbo Executive $3,059
Porsche 911 Turbo S $3,050
Jaguar F-Type SVR (convertible) $3,035
BMW Alpina B6 XDrive Grand CP $3,030

Less-expensive makes and models of cars cost less to insure because repair and replacement costs run cheaper. The following table, from Insure.com, details the least expensive cars to insure, including the Ford Edge SE, Honda HR-V LX, and Subaru (XV) Crosstrek 2.0l.

<style type="text/css"> .tg {border-collapse:collapse;border-spacing:0;} .tg td{font-family:Arial, sans-serif;font-size:14px;padding:10px 5px;border-style:solid;border-width:1px;overflow:hidden;word-break:normal;} .tg th{font-family:Arial, sans-serif;font-size:14px;font-weight:normal;padding:10px 5px;border-style:solid;border-width:1px;overflow:hidden;word-break:normal;} .tg .tg-m4gj{font-weight:bold;font-size:20px;background-color:#0d202f;color:#ffffff;text-align:center} .tg .tg-s6z2{text-align:center} .tg .tg-baqh{text-align:center;vertical-align:top} .tg .tg-hgcj{font-weight:bold;text-align:center} </style>

Least Expensive Cars to Insure
Make/Model Average Annual Premium
Honda Odyssey LX $1,112
Jeep Renegade Sport $1,138
Jeep Wrangler Black Bear $1,148
Honda CR-V LX $1,170
Jeep Compass $1,183
Subaru Outback 2.5l $1,187
Jeep Cherokee Sport $1,188
Buick Encore (tie) $1,190
Jeep Patriot Sport (tie) $1,190
Subaru Forester 2.5l $1,196
Ford Escape SE $1,203
Mazda CX-3 $1,204
Honda Pilot LX $1,205
Fiat 500X Pop $1,210
Nissan Frontier S $1,216
Hyundai Tucson SE $1,217
Subaru (XV) Crosstrek 2.0l (tie) $1,219
Honda HR-V LX (tie) $1,219
Ford F-150 XL (tie) $1,219
Ford Edge SE $1,221

Part 2 of 3: Owning a “most stolen” car

When setting insurance rates, insurers also consider how attractive your car is to thieves and it’s odds of being stolen. Every year, certain cars end up in the hands of thieves, leading to higher insurance rates for those particular makes and models. The following table from Insurance Information Institute details the top 10 most frequently stolen vehicles by make and model in 2016, with the Honda Accord, Honda Civic, and Ford Full-Size Pickup at the top of the list.

<style type="text/css"> .tg {border-collapse:collapse;border-spacing:0;} .tg td{font-family:Arial, sans-serif;font-size:14px;padding:10px 5px;border-style:solid;border-width:1px;overflow:hidden;word-break:normal;} .tg th{font-family:Arial, sans-serif;font-size:14px;font-weight:normal;padding:10px 5px;border-style:solid;border-width:1px;overflow:hidden;word-break:normal;} .tg .tg-m4gj{font-weight:bold;font-size:20px;background-color:#0d202f;color:#ffffff;text-align:center} .tg .tg-s6z2{text-align:center} .tg .tg-baqh{text-align:center;vertical-align:top} .tg .tg-hgcj{font-weight:bold;text-align:center} </style>

Top Ten Most Frequently Stolen Vehicles in 2016
Make/Model Number of Thefts
Honda Accord 50,427
Honda Civic 49,547
Ford Pickup (Full Size) 32,721
Chevrolet Pickup (Full Size) 31,238
Toyota Camry 16,732
Nissan Altima 12,221
Dodge Pickup (Full Size) 12,128
Toyota Corolla 11,989
Chevrolet Impala 9,749
Jeep Cherokee 9,245

Part 3 of 3: How safety ratings affect insurance premiums

Car safety is another huge factor in the calculation of insurance rates, with cars that have lower safety ratings costing more to insure. The following table from Newser.com lists the 5 deadliest makes and models in 2016, including the Hyundai Accent and Kia Rio.

<style type="text/css"> .tg {border-collapse:collapse;border-spacing:0;} .tg td{font-family:Arial, sans-serif;font-size:14px;padding:10px 5px;border-style:solid;border-width:1px;overflow:hidden;word-break:normal;} .tg th{font-family:Arial, sans-serif;font-size:14px;font-weight:normal;padding:10px 5px;border-style:solid;border-width:1px;overflow:hidden;word-break:normal;} .tg .tg-m4gj{font-weight:bold;font-size:20px;background-color:#0d202f;color:#ffffff;text-align:center} .tg .tg-s6z2{text-align:center} .tg .tg-hgcj{font-weight:bold;text-align:center} </style>

Five Deadliest Cars of 2016
Make/Model
Hyundai Accent (sedan)
Kia Rio
Scion tC
Chevrolet Spark
Nissan Versa

On the flip side, cars with a high safety rating can save insurers on property and personal injury costs, garnering cheaper rates. The following chart from Newser.com reveals the five safest make and model of car for 2016, including the Volkswagen Tiguan 2WD and Mazda CX-9 2WD.

<style type="text/css"> .tg {border-collapse:collapse;border-spacing:0;} .tg td{font-family:Arial, sans-serif;font-size:14px;padding:10px 5px;border-style:solid;border-width:1px;overflow:hidden;word-break:normal;} .tg th{font-family:Arial, sans-serif;font-size:14px;font-weight:normal;padding:10px 5px;border-style:solid;border-width:1px;overflow:hidden;word-break:normal;} .tg .tg-m4gj{font-weight:bold;font-size:20px;background-color:#0d202f;color:#ffffff;text-align:center} .tg .tg-s6z2{text-align:center} .tg .tg-hgcj{font-weight:bold;text-align:center} </style>

Five Safest Cars of 2016
Make/Model
Volkswagen Tiguan 2WD
Toyota Tacoma (double-cab long bed 4WD)
Mazda CX-9 2WD
Jeep Cherokee 4WD
Mercedes-Benz M-Class 4WD

While it doesn’t take rocket science to figure out that more expensive and less safe cars cost more to insure, knowing the ins and outs of how insurance rates are set helps get you closer to your dream car. So, before buying your next car, consider how your insurance company views the make and model of your car, whether that’s a BMW, Ford, or something in between.

Share this article

Hate shopping for car insurance?

Jerry shops for your insurance automatically using AI technology.

Jerry negotiates with the top 20 insurance providers and does all the paperwork for you to switch, for free.

Hate shopping for car insurance?

Jerry does that for you automatically using AI technology.

1. Tell us your name, phone and current insurance company.

2. We shop top 20 insurance companies to find you savings.

3. We do all the paperwork for you to switch, at no cost to you.

illustration

hi@getjerry.com
1-833-445-3779
(M-F 8am-5pm PT)

Apps

  • Download App on iOSDownload App on Google Play
Jerry Financial and Insurance Services is a licensed insurance broker licensed to do business in all 50 states.
Copyrights © Jerry 2018. All rights reserved.