Car Insurance Policies and their Relationship with the Vehicle to be Insured
Are you thinking about getting a brand new car? Is this new automobile you have your eye on expensive and fancy? If you are going to say yes to both of these questions, then you should know that you also have to be prepared to face greater and much more expensive car insurance costs. Why? This is because there is a direct relationship between auto insurance rates and the specific type of vehicle to be insured. If you are going to have a luxury sports car or a very fancy SUV insured, you can expect to be charged by insurance companies with extremely high rates.
Insurance Premiums – Based Partly on the Vehicle’s Overall Price
There are many factors that car insurance companies base the rates and the premiums that they charge their policy holders on. One of these is the specific type of the vehicle that the policy holder will be insuring under their company. In a nutshell, insurance premiums and rates are partly determined by the overall rice of the vehicle. This price impacts the replacement cost of the automobile in the event that it gets stolen or it gets ‘totaled’ in a road traffic accident. In addition, the overall repair costs of the car, which includes parts and labor, will also determine the auto insurance premiums and rates.
Lowest Injury Claims – Made for Large Vehicles
According to the Highway Loss Data Institute, or the HLDI, large vehicles are those that have the lowest injury claims. These include cars, sport utility vehicles, and pickup trucks. Small automobiles, particularly 2-door and 4-door models, on the other hand, are those that have the highest injury claims. In addition to having the highest claims, these small automobiles are also some of those that have the highest collision costs, with sport cars also being included in this category.
What This All Means to You as a Car Buyer
So what does this relationship mean to you as someone who is out to purchase a brand new car? As mentioned above, the specific type of automobile you will be purchasing will either mean low or extremely high insurance costs. So with this being said, if you are planning to get a sporty vehicle, you should know that you are probably going to pay dearly not only for the car itself, but also for your insurance premiums and rates. Keep in mind that having a high performance car insured can easily result in your overall insurance costs being doubled or even tripled.