Auto insurance industry takes the gas money savings from small car owners
Filed under: Insurance, Transportation
An examination of automobile insurance premiums from The Wall Street Journal reveals that the nature of smaller autos makes them justifiably more expensive to insure. For some smaller cars, such as some of the new hybrid models, replacement parts can be difficult to obtain, and labor costs are sometimes higher than for conventional autos. Additionally, hybrid cars can often take longer to repair.
Hybrids in the News
The BMW Concept 7 Series active hybrid car is seen on the back of a camera display at the Paris Auto Show, in Paris, Wednesday, Oct. 15, 2008. (AP Photo/Remy de la Mauviniere)
AP
People are seen looking at the BMW Concept 7 Series active hybrid car at the Paris Auto Show, in Paris, Wednesday, Oct. 15, 2008. (AP Photo/Remy de la Mauviniere)
AP
SHENZHEN, CHINA - OCTOBER 14: (CHINA OUT) Visitors view a F3DM electric vehicle and its model at 2008 China High-tech Fair (CHTF) on October 14, 2008 in Shenzhen of Guangdong Province, China. BYD F3DM, which has been claimed as China's first mass-produced electric vehicle by BYD Auto, is a gasoline-electric hybrid plug-in vehicle, using a small gasoline combustion engine to charge the car's battery. When fully charged, it can run as far as 100 to 110 kilometers by electricity. BYD planned to launch F3DM hybrid by the end of this year in Shenzhen. (Photo by China Photos/Getty Images)
Getty Images
SHENZHEN, CHINA - OCTOBER 14: (CHINA OUT) Visitors view a F3DM electric vehicle and its model at 2008 China High-tech Fair (CHTF) on October 14, 2008 in Shenzhen of Guangdong Province, China. BYD F3DM, which has been claimed as China's first mass-produced electric vehicle by BYD Auto, is a gasoline-electric hybrid plug-in vehicle, using a small gasoline combustion engine to charge the car's battery. When fully charged, it can run as far as 100 to 110 kilometers by electricity. BYD planned to launch F3DM hybrid by the end of this year in Shenzhen. (Photo by China Photos/Getty Images)
Getty Images
SHENZHEN, CHINA - OCTOBER 14: (CHINA OUT) A model poses to promote a BYD F0 at 2008 China High-tech Fair (CHTF) on October 14, 2008 in Shenzhen of Guangdong Province, China. F0, a traditional gasoline-fueled car, will be replaced by a Dual Mode (DM) plug-in hybrid in the future. BYD Auto unveiled on October 12 the F3DM, which has been claimed as China's first mass-produced electric vehicle by BYD. F3DM is a gasoline-electric hybrid plug-in vehicle, using a small gasoline combustion engine to charge the car's battery. When fully charged, it can run as far as 100 to 110 kilometers by electricity. BYD planned to launch F3DM hybrid by the end of this year in Shenzhen. (Photo by China Photos/Getty Images)
Getty Images
SHENZHEN, CHINA - OCTOBER 14: (CHINA OUT) A model pets a child as she poses to promote the BYD autos at 2008 China High-tech Fair (CHTF) on October 14, 2008 in Shenzhen of Guangdong Province, China. BYD Auto unveiled on October 12 the F3DM, which has been claimed as China's first mass-produced electric vehicle by BYD. F3DM is a gasoline-electric hybrid plug-in vehicle, using a small gasoline combustion engine to charge the car's battery. When fully charged, it can run as far as 100 to 110 kilometers by electricity. BYD planned to launch F3DM hybrid by the end of this year in Shenzhen. (Photo by China Photos/Getty Images)
Getty Images
SHENZHEN, CHINA - OCTOBER 14: (CHINA OUT) Visitors view a F3DM electric vehicle at 2008 China High-tech Fair (CHTF) on October 14, 2008 in Shenzhen of Guangdong Province, China. BYD F3DM, which has been claimed as China's first mass-produced electric vehicle by BYD Auto, is a gasoline-electric hybrid plug-in vehicle, using a small gasoline combustion engine to charge the car's battery. When fully charged, it can run as far as 100 to 110 kilometers by electricity. BYD planned to launch F3DM hybrid by the end of this year in Shenzhen. (Photo by China Photos/Getty Images)
Getty Images
SHENZHEN, CHINA - OCTOBER 14: (CHINA OUT) Visitors view a car model depicting the structure of F3DM electric vehicle at 2008 China High-tech Fair (CHTF) on October 14, 2008 in Shenzhen of Guangdong Province, China. BYD F3DM, which has been claimed as China's first mass-produced electric vehicle by BYD Auto, is a gasoline-electric hybrid plug-in vehicle, using a small gasoline combustion engine to charge the car's battery. When fully charged, it can run as far as 100 to 110 kilometers by electricity. BYD planned to launch F3DM hybrid by the end of this year in Shenzhen. (Photo by China Photos/Getty Images)
Getty Images
SHENZHEN, CHINA - OCTOBER 14: (CHINA OUT) The Household Charge Port and Quick Charge Port are seen on a F3DM electric vehicle at 2008 China High-tech Fair (CHTF) on October 14, 2008 in Shenzhen of Guangdong Province, China. BYD F3DM, which has been claimed as China's first mass-produced electric vehicle by BYD Auto, is a gasoline-electric hybrid plug-in vehicle, using a small gasoline combustion engine to charge the car's battery. When fully charged, it can run as far as 100 to 110 kilometers by electricity. BYD planned to launch F3DM hybrid by the end of this year in Shenzhen. (Photo by China Photos/Getty Images)
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SYDNEY, AUSTRALIA - OCTOBER 09: The Toyota Hybrid Supra HV-R is unveiled during the Australian International Motorshow at the Sydney Convention & Exhibition Centre October 9, 2008 in Sydney, Australia. (Photo by Cameron Spencer/Getty Images)
Getty Images
Karen Block, an independent insurance agent in Medford Wisconsin, indicates that the situation is quite basic and easy to understand. She stated: "Smaller cars have statistically higher repair costs." The Wall Street Journal article reports: "A recent study by the Highway Loss Data Institute, an affiliate of the IIHS, found that overall insurance costs for crash damage were higher for 11 of 12 hybrid cars and SUVs than for their gas-only counterparts."
While the owners of smaller cars may be paying higher costs to have their own cars repaired, it should be noted that their premiums for property damage liability may be lower. This is due to the fact that, when compared to larger vehicles in similar collisions, smaller cars tend to do less damage to the things they hit. There is concern however, that this condition may also mean that smaller cars offer their occupants a reduced level of crash protection, which is why I keep myself surrounded by a full sized Chevy pick-up truck, and keep my wife in her well built Jeep SUV.
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Reader Comments (Page 1 of 3)
10-27-2008 @ 6:29AM
bright light said...
It might cost more for insurance, maintenance and all.. but if you drive a smaller car you polute less, spend less fuel, and
best of all your money does not got to the already wealthy oil
industry companies.....we should of done it a long time ago like
all other countries...
Reply
11-26-2008 @ 12:15AM
Samuel Clugston said...
Small cars are death traps, big trucks don't just bang into them,
they run over them, flatten them out like pancakes, and no matter how safe these cars are made to be , or how fuel efficent they are, reatity is that until "the nut behind the wheel is fixed " the size of the car means nothing. The insurance companies know this , that's the reason for that extra cost. I travel a lot, and I see driving habits that are in need of serious repair, not the cars. It seems
like people think that their car ( samll or big) makes them bullet
proof. Remember Insurance companies like to rape the american public, and what is going on is a sample of that. One way or the other we are getting screwed , so be careful and drive like you
want to live., and just maybe the price of your insurance will come down, not likely, but we can hope.
10-27-2008 @ 8:04AM
capt. mike said...
I have seen so many rolled over s u v 's and women , mainly trying to panic stop one on slippery roads, to no avail, that I cringe when I see a small childs face in the window of a Soon to be Upside Down vehicle. 9 of 10 drivers cant handle them in in a crisis or when a tire blows. The turnpike rest areas are littered with the flattened remains of suv's. They cant avoid accidents , dont skid well, and they hit hard sending their occupants into the restraints at highway speed. a smaller car with crumple zones, if it did not manage to avoid the trouble by being more nimble would absorb the impact much better. Sorry the gas hogs are deadly to their occupants , and whoever else they hit
Reply
10-27-2008 @ 12:49PM
joncdodge said...
Mid sized SUV's are okay, its the full sized SUVS who really are the most dangerous on the road.
I just did a story on what to say in regards to being pulled over by the cops and what to say check it out at http://curiousread.com
Thanks,
Jon
11-07-2008 @ 12:24PM
Belinda said...
I have to agree with this comment. Having a smaller, fuel efficient car, and one that I can control is much more important to me than any SUV gas hog that might flip over in an accident. Yes, they might cost more for insurance, but one flip in an SUV and your insurance company will make you pay for that for many years.
10-27-2008 @ 8:38AM
Paul Burch said...
The attitude of the author of this item is EXACTLY why we are in the fuel predicament we are (or were, at the moment) in. If everyone drove a smaller fuel efficient car then the situation with injuries and damage favoring the gas hogs and luxury excesses wouldn't be as it is. Sorry, but there's no need for a vehicle as inefficient as a full-size pickup or SUV to transport one person. No excuse at all.
Reply
10-28-2008 @ 12:38PM
Chris said...
Paul, you and your tree-hugging for no reason friends will never take away my full size truck. Not everyone works in a cute little cubicle, some of us earn money differently and there is not a single vehicle made by a Japanese car company that could possibly hold up to the work I do, or evne come close to a Chevy or Ford pickup. Helping the environment is a good thing, and the right thing to do, not just something to do because it is the "in" thing. Just because you feel that no one should drive a truck does not make it the correct thing. Opinions are like a-holes, everyone has one and they all stink.
10-27-2008 @ 8:51AM
CHRIS said...
Slow down and there will be less opportunity for accidents. Dont blame the vehicle. CRIME IS UP, PROTECT YOUR FAMILY, PEPPER SPRAY, WIRELESS HOME SECURITY, HOME MONITORING, PROTECTION DVDS, WWW.YOUBSAFE.COM
Reply
10-27-2008 @ 9:05AM
Gary said...
The insurance industry could probably afford to stop the discriminatory style of coverage it has somehow, through legislation and government lobbying; arranged (to screw the very people that pay them these frightening fees) for coverage. The style of coverage and variable deductibles allowed in this trade should be changed. The industry probably spends more on lobbying and advertising and bonuses than it pays to the very hand that FEEDS them WE THE PEOPLE. As with the mortgage business, the banks and virtually every business: you will suffer if you forget the customer provides you with your income.What you give you will recieve.
TLOG
Reply
10-27-2008 @ 9:04AM
Harry said...
On the highway, I drive 70. About about 2 of every 3 vehicles PASS ME me! I see many state patrol cars sitting on the sides of the highway doing nothing...
Reply
10-27-2008 @ 9:13AM
Lauryn said...
Great, the author has no sense of being responsible for BOTH his family's safety AND curbing outrageous emissions. With all of the great technology today like side and curtain air bags, it is only a person trying to make themselves feel better about their gas-guzzling truck that will try to claim that they're only safe in an SUV.
Reply
10-27-2008 @ 9:37AM
mike said...
your wife isn't as safe in that jeep as you may think I own a bodyshop and Jeep Cherokee's and Liberties are some of the worst vehicles to be ibn an a collision , we had one Cherokee that had a head on collision with a Hyundia Excele and the woman in the Jeep was killed the engine was in the front seat the man in the hyundai walked away , so just because a vehicle is bigger doesn't make it safer
Reply
10-27-2008 @ 10:16AM
Mike said...
"...keep my wife in her well-built Jeep." A well-built Jeep? Where did you find one? I didn't know Chrysler made a Jeep well.
Reply
10-27-2008 @ 3:17PM
watdafuk said...
They don`t, Must be a real jeep you know the ones they used to make , before chrysler bought them and fucked them up.
10-27-2008 @ 10:18AM
Pauline Kasper said...
I used to own a Jeep Cherokee. One day I was driving from Keene to Walpole and hit a deer. The front end of the car sustained a lot of damage both to the body and the engine. (The deer was killed.) I had it repaired but it was never the same since the accident. Too many things went wrong with the car and I just couldn't see repairing them! So I traded my Jeep for a Subaru Impreza.
Reply
10-27-2008 @ 10:59AM
mead carlson said...
The little cars are death traps and don't hold up well in our part of the country (NWPa.). Terrible roads and poor weather make trucks and truck based SUV;s the best buy. High maintenance and frequent expensive repair are far more costly than a few gallons of gasoline. Check the price lately?
When in a wreck the law ogf gravity favors the bigger vehicle,just ask the rescue guys.
Reply
10-27-2008 @ 11:03AM
Robert said...
I am a Paramedic, I see many accidents as well as having studied the mechanisms of damage to vehicles. Now For an Insuance agent to have said what she did about why she drives her type of vehicle is rediculous. Cars these days are not safer because of their size. Cars today are made to absorb impacts in many different directions and have crumpling effects or crumple zones. The older cars transfer the forces of an impact to the occupants. The SUV's rollover so easily. I have been on many accident scenes in which they have flipped three or four times sometimes more. There are a few who walk away, some who are injured and a few who are injured with head inuries and spinal fractures. The forces involved in lateral and rotational impacts with any vehicle can cause many types of injuries including but not limited too internal injuries ( ruptured spleen, heart complications, lacerated liver...) broken neck or spine, fractured ribs and limbs and puntured lungs. I must say that I am surprised that an insurance agent who knows these figures would say what she did. Be safe
Reply
10-27-2008 @ 11:53AM
Riki said...
I thought about switching to a smaller car BUT every time somebody rides in the passenger seat of my 1984 black Pontiac Trans Am (KITT!) people always say "man, your car is so tiny"...And it's fuel-efficient, it only holds 13 gallons in its tank at a time. So I guess there's no point in getting a small car when I already got one. :-D
Reply
10-27-2008 @ 12:29PM
ellenbetty said...
Air quality is a major concern to me. Powering my car with imported Muslim oil offends me. Minor details, like the ability to mount my nav system on the dash in front of the steering wheel, helped my pick my new car. I bought a Yaris, a car better Consummer report rating than any American made car or truck. With 35 MPG the Yaris is hard to beat. I got 120,000 miles out of my Escort. The Japanese made motor ran better than any of the American made motors I have owned. At 60,000 miles, my brother's Ranger head had to be resurfaced because of warping.
Reply
10-27-2008 @ 12:19PM
benetonf1 said...
Let's see... What have I learned so far in this discussion?
-Jeeps are very safe and not safe at all.
-The '84 Trans Am is fuel efficient.
-The law of gravity determines the outcome of an auto accident.
-The concept of "We The People", stolen from the Constitution recently by people who imagine that Americans actively banded together to reduce consumption and THAT is why gas prices are down, has now been co-opted to complain about auto insurance rates.
-The rest stops of our land are littered with flattened SUV's.
-The State Police don't pull people over for speeding.
My day is now complete.
Reply