The Automotive Guessing Game

The Automotive Guessing Game

Reading your insurer’s mind can save your money

If you’re a 22-year-old male driving a souped-up Porsche, you may want to think about getting married. There’s nothing cheap about a high performance sports car, including insurance premiums, but insurers do give a discount to married sports car enthusiasts under the assumption – based on hard data – that they will get into fewer accidents.

That doesn’t mean you should get married just to get a lower rate, of course, just that auto insurers know more about you than you think. Like anyone that makes a living by gambling, insurance companies make it a point to know the odds. Years of accumulating data on the kinds of people who will get into accidents have allowed them to play the percentages with increasing accuracy.

You can’t change who you are, but it helps to know how insurers make their calculations – that way, you can make a few calculations yourself about how to save on your bill when you, say, buy your next car. Here are some of the basics that insurance companies consider when setting rates.

Prior accident and conviction rate: Most insurers will give a break of 20 percent to 40 percent for maintaining a clean driving record. In California, a 20 percent “good driver” discount is even mandatory.

Your age: According to insurers’ bell curves, drivers between 50 and 64 have the fewest accidents. The peak accident rates are after 75 and (no surprise) at about 16. Marriage, of course, can throw you into an entirely different part of the bell curve.

A car. Illustration by Elena

Choice of car: Insurers tend to charge more for pricey, high-performance vehicles. State Farm and Allstate both publish rankings of cars by their risk category. The Acura Legend, the Ford Explorer SPW, and the GMC Safari van are included on both lists as vehicles with lower-than-standard collision and comprehensive premiums. The BMW 325 and Camaro Z-28, on the other hand, are ranked by Allstate as “much worse than average risks” and rates are higher.

Where you live: The higher the density of vehicles, the more likely you are to have an accident, so cities can be more expensive than suburbs.

Safety devices: Air bags and anti-lock brakes can bring down the cost of insurance by more than 10 percent. Some states, like Florida and New York, require discounts on collision coverage for cars equipped with anti-lock brakes and other safety devices.

Multi-car discounts: When you insure more than one car with the same company, you can sometimes qualify for a 10 percent to 25 percent discount.

Annual mileage: Less time on the road and shorter commutes mean less of a chance of getting into accident.

Good grades: Student who keep a B average can win themselves or their parents a 10 percent to 20 percent discount.

Anti-theft devices: Devices that set themselves automatically are likely to win bigger discounts since insurers know that people sometimes forget to set car alarms. (Do your neighbors a favor, though: don’t set the sensitivity too high. Heavy trucks passing by often can set off the device).

Defensive-driving courses: Most insurance companies will give you a discount for taking a state-approved defensive driving course. Check first; sometimes the discount only applies to drivers over 55.