Those feeling as if they are paying more for car insurance are not wrong. Car insurance premiums rose by more than 20% between 2011 and 2018 to a national annual average premium of $1,427. All signs suggest rates will continue to rise in the near future.
The amount Americans pay for car insurance depends on many factors, including driver age, driving record, and location. Of course, the kind of vehicle also makes a big difference in insurance costs.
The Insurance Institute for Highway Safety, a nonprofit research organization funded by auto insurers, collects data on insurance claim frequency and insurance cost per vehicle. In a given year, insurance companies make claim payments of roughly $964 on average per vehicle. This is an average — so while insurers pay zero dollars for vehicles that go without incident in a given year, they might pay over $20,000 or more for vehicles involved in accidents or other events.
Insurers use average insurance claim payment as the basis for charging premiums, charging consumers more, of course, to make a profit. If models have a higher average insurance claim payment, insurers transfer the higher expected costs to the consumer. If the model has lower and less frequent payments, insurers will often charge lower premiums.
Some vehicles get into more accidents, and some have higher payouts for each accident. Insurers make claim payments on some models averaging less than $600, while they are more than double that on others. 24/7 Wall St. reviewed the 25 cars with the lowest annual cost to insurers. In the case of duplicates, we only listed the version of the model with the lowest insurance cost. We also excluded those vehicles where a relative cost figure was not included by IIHS for all six payout categories: collision, property damage, comprehensive, personal injury, medical payment, and bodily injury.
Generally, less expensive models tend to require lower insurance payouts in categories related to damage repair, in particular when covering collision costs. Just three of the 25 most expensive cars to insure are luxury vehicles or sports cars, compared to close to half of the 25 cars with the highest insurance costs.
In addition to price, the size of the vehicle appears to be a major determinant of insurance payouts. Many of the vehicles with low insurance claim payments are large and midsize SUVs. Such cars tend to have low personal injury, medical, and bodily injury insurance payouts, likely the result of being safer. While 17 of the 25 cars with the lowest annual insurance costs are SUVs, minivans, or pickup trucks, just two of the 25 cars with the highest insurance premiums are. Several of the least expensive cars to insure are among the safest cars in America.
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