Vehicle Affects Insurance Rates

Y­ou have always wanted to own a Ferrari, one of the fastest sports cars in the world. However, what you pay to drive that sports car or fancy SUV that you have always dreamed of might not be worth the rates. Your insurance company may charge you a higher rate to protect you while driving it.

Insurance premiums are based primarily on the cost of the vehicle, which affects the replacement cost if the car is damaged, stolen, or "totaled" in an accident. The more exotic the vehicle is the more it cost to repair -- including parts and labor -- which can also affect the coverage rates. In addition, surcharges may apply to vehicles that are frequently stolen or involved in accidents based off of national statistics.

Industry-wide information available on injury claims, collision repair costs, and theft rates by vehicle model is available from the Highway Loss Data Institute (HLDI). You can write them at 1005 North Glebe Road, Arlington, VA 22201. HLDI is affiliated with the Insurance Institute for Highway Safety (IIHS). This is not a government organization.

According to HLDI, the lowest injury claims are from large vehicles -- cars, pickup trucks, and sport-utility vehicles. Small 2- and 4-door cars have the highest injury claims. Small cars also are among the highest in collision costs, along with sports cars.

If you have your heart set on a certain vehicle, it's very important that you consider the cost of coverage before making a purchase. Insuring a high-performance vehicle can easily cost two or three times the insurance amount of an ordinary family model.

Sport-utility vehicles, are not as expensive as they used to be, the economy has cost the price to fall. Therefore insurance rates for mid and full-size cars is less expensive but some SUV models are relatively cheap to insure. SUVs are good for other reasons as well. Such as high safety ratings. However, they are among the most frequently stolen vehicles, and they used to be more expensive than most cars. Cadillac's Escalade is currently the most popular model sought by thieves, but it's followed by the Nissan Maxima, which cares a rather high insurance rate. SUVs also costly to fix, especially if the 4-wheel-drive system is damaged in an accident.

However, insurance companies set rates based on their own terms and experience. If Company A has more collision and theft claims for a particular vehicle than Company B, then A might charge more for the same coverage. It all comes down to what a company's actual experience with a certain vehicle or type of driver. That is why it pays to shop around for insurance.