Auto insurance - Collision premium

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BostonButterfly
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Auto insurance - Collision premium

Post by BostonButterfly » Thu Aug 23, 2018 7:42 am

I'm not looking to get way deep into the weeds here, but basically what factors go into the premium for collision coverage on a car? Is it only the car specifically, or do other factors come into play........say location, other coverage, etc?

I've recently been going over all of our insurance policies to make sure we are adequately insured. Back in December, a friend and I purchased the exact same car, which is a 2017 electric VW Golf. He lives about 20 miles away from where I do. I mentioned that I was going over my insurance stuff, and we discussed the auto coverage and realized that we are paying drastically different amounts, and the main culprit is Collision. He is paying $85 per YEAR for collision through Geico, while I'm paying $930 per year.......just for collision through Arbella. What the heck can cause such a massive price difference for the exact same car??? What am I missing here? Is collision collision, and I'm getting royally screwed, or does collision premium vary depending on certain factors?

thanks!

Rupert
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Re: Auto insurance - Collision premium

Post by Rupert » Thu Aug 23, 2018 7:47 am

Your driving record, your credit history, your gender, your age, your precise location (where the car is garaged), your marital status, etc., all factor into your collision premium. (Edited to add: Both your collision premium (too high) and your friend's collision premium (too low) seem wrong to me. Are you sure your friend is telling you the truth? Are you sure his isn't that amount per quarter or every 6 months?)

bob60014
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Re: Auto insurance - Collision premium

Post by bob60014 » Thu Aug 23, 2018 8:04 am

It may be as simple as the spreading of risk. Geico is national and Arbella is a regional. Obviously Geico has a bigger pool then, hopefully, lower rates.

FWIW, We have Geico and pay $90/yr for collision on a 2012 Honda Accord. Just paid the premium and it is $450/yr for full coverage in the nw suburbs of Chicago.

Jack FFR1846
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Re: Auto insurance - Collision premium

Post by Jack FFR1846 » Thu Aug 23, 2018 8:12 am

Insurance number comparisons are futile and worthless. Things that go into the number include:

Driving record
The car itself and it's history as a model (a Subaru WRX typically has higher rates than a Subaru WRX STi because more kids can afford the WRX and wrap it around a tree).
The repair cost for a vehicle (nearly any accident for a Lotus Elise will total the car, as an extreme)
Your marital status
Your other policies with the company (home, umbrella, life)
Other cars on the policy (multi-car discount)
Your discounts (AAA, good student, low mileage, theft systems in the car)
Your location (Very important)
Your age
Your number of years driving
Other people licensed in the household (doesn't matter if they drive the car unless you get a specific exclusion form signed by high risk drivers not to ever drive the car)
Your credit rating
Number of years with the insurance company
Limits set by the state (until recently, my state set all insurance rates and all insurance companies charged the same high rate)
The legal playing field of your state
The safety rating of your car
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BostonButterfly
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Re: Auto insurance - Collision premium

Post by BostonButterfly » Thu Aug 23, 2018 8:21 am

Hmm. Ok. FWIW, I'm looking at his actual policy, and it is his annual premium. We both have excellent credit, excellent driving records, both married, have the exact same exact car, etc. I now realize that a lot more goes into calculating premium. Even still, ten times the difference seems way wrong.

I'll get a quote from Geico for the same coverage and see how the premium differs between us.

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dual
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Re: Auto insurance - Collision premium

Post by dual » Thu Aug 23, 2018 11:42 am

FWIW I only insure for events that could affect my overall financial well-being so I do not carry collision coverage. If you are like most Bogleheads you can replace the car without it affecting you significantly. I am not saying you would like it but you could do it. Most BH are also better than average risks--another reason for self-insuring.

BTW, I do carry high limit liability and have an umbrella policy because a large legal judgement could affect my finances.

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dm200
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Re: Auto insurance - Collision premium

Post by dm200 » Thu Aug 23, 2018 1:21 pm

dual wrote:
Thu Aug 23, 2018 11:42 am
FWIW I only insure for events that could affect my overall financial well-being so I do not carry collision coverage. If you are like most Bogleheads you can replace the car without it affecting you significantly. I am not saying you would like it but you could do it. Most BH are also better than average risks--another reason for self-insuring.

BTW, I do carry high limit liability and have an umbrella policy because a large legal judgement could affect my finances.
Yes - one good way to look at it.

There are, though, some possible benefits of carrying a higher deductible collision policy. One is that it can save money and lower risk when you rent a car. Another is that if the car is damaged by another party and they or their insurance balks at paying, you put a claim on collision and then your company will fight for you and them.

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FIREchief
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Re: Auto insurance - Collision premium

Post by FIREchief » Thu Aug 23, 2018 1:31 pm

OP - that is your collision deductible and what is your friends? That can make a big difference. Somebody with a $1500 deductible isn't going to be turning in those $1000 repairs because of something that happened in a parking lot. Somebody with $100 deductible likely will be.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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jharkin
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Re: Auto insurance - Collision premium

Post by jharkin » Thu Aug 23, 2018 1:37 pm

OP is in Massachusetts. Mass law does not allow credit report information to be used in auto insurance.

Collision premium is based on vehicle, location, age, marital status, driving history (RMV step rating), annual milage, deductable and discounts.


An $85 collision premium is believable in this state for an inexpensive car for an older driver with a perfect record. Ive got a perfect step rating, married, over 40 and with a lot of discounts my annual collision premium is under $200 on a $40k vehicle.

Get quotes from GEICO and Amica.
Last edited by jharkin on Thu Aug 23, 2018 1:43 pm, edited 1 time in total.

Starfish
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Re: Auto insurance - Collision premium

Post by Starfish » Thu Aug 23, 2018 1:42 pm

How many miles you drive is among the most important factors.

Jack FFR1846
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Re: Auto insurance - Collision premium

Post by Jack FFR1846 » Thu Aug 23, 2018 1:45 pm

Starfish wrote:
Thu Aug 23, 2018 1:42 pm
How many miles you drive is among the most important factors.
In Mass, only if you're applying for a low mileage discount. Otherwise, I've never had to report mileage.
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Starfish
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Re: Auto insurance - Collision premium

Post by Starfish » Thu Aug 23, 2018 1:55 pm

Interesting.
My commute in California always added ~500$ to my yearly premium.

BogleMelon
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Re: Auto insurance - Collision premium

Post by BogleMelon » Thu Aug 23, 2018 3:17 pm

dm200 wrote:
Thu Aug 23, 2018 1:21 pm
dual wrote:
Thu Aug 23, 2018 11:42 am
FWIW I only insure for events that could affect my overall financial well-being so I do not carry collision coverage. If you are like most Bogleheads you can replace the car without it affecting you significantly. I am not saying you would like it but you could do it. Most BH are also better than average risks--another reason for self-insuring.

BTW, I do carry high limit liability and have an umbrella policy because a large legal judgement could affect my finances.
Yes - one good way to look at it.

There are, though, some possible benefits of carrying a higher deductible collision policy. One is that it can save money and lower risk when you rent a car. Another is that if the car is damaged by another party and they or their insurance balks at paying, you put a claim on collision and then your company will fight for you and them.
+1
For these reasons I too decided to carry collision insurance for a $5000 car ($1000 Deductible though)
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