Archive for July 17th, 2009

Smaller Cars Linked to Larger Insurance Rates?

Friday, July 17th, 2009
Smaller Car Equals Larger Insurance Premiums

Smaller Cars Equal Larger Car Insurance Premiums.

MSN Money has a nice article on smaller cars leading to larger insurance premiums.  You can read the entire article here.   While smaller cars lead to better fuel savings, which is a big deal right now, they most likely will lead to larger insurance premiums as well.  The Honda Civic and Toyota Prius are the most expensive cars to insure.  The reason might surprise you.

According to insurance companies smaller cars tend to be in more accidents and suffer more collision losses.  Smaller cars tend to be inexpensive and also tend to be driven by younger more at risk drivers.  If you buy a particular model that suffers large losses, you will pay for other driver’s mistakes.  For instance, the Civic is rated at “worse than average” for personal injury losses and medical payments.  The Civic Coupe is even worse.  It is “worse than average” for personal injury and “substantially worse than average” for collision, personal injury protection, and medical payments.

Unfortunately, this could have a terrible affect on the types and amounts of insurance coverage you buy.  Many drivers might be tempted to reduce their coverage or eliminate it all together just to afford the insurance on a new, smaller car.  This could be disastrous if you are involved in an car accident.  Saving a little money a month in premiums is simply not worth the overall cost you could suffer if you are underinsured, or worse uninsured, with particular coverage.

Be sure to consider the affect a new car purchase may have on your insurance rates before you buy.  Perhaps, it’s good to also remember that bigger may just actually be better.