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COPYRIGHT 2002 Consumers Union of the United States, Inc.
A thirty-something couple with squeaky-clean driving records and good credit can pay GE Auto Insurance $1,087 a year to fully insure a 2002 Saturn SL2 in the St. Louis suburb of Frontenac. So why would the same coverage from the same insurer cost the same couple dramatically more--$1,565 a year--if they instead owned a 2002 Dodge Neon ES? Both cars are small sedans in the same price range--about $14,000 to $15,000.
Drivers who move up to a luxury vehicle like a Lincoln Navigator or buckle into a high-performance Corvette often figure they'll pay more for insurance because pricey repair parts tend to boost the cost of any accident. But no one on a Dodge budget expects to pay Maserati prices for insurance. "Most consumers don't know that premiums on more-common vehicles can vary by make and model," says Madelyn Flannagan, vice president for education and research at the Independent Insurance Agents and Brokers of America trade association. And the same insurance company may charge the same driver wildly different prices to insure similar vehicles, as we found for the couple mentioned above--a test-shopper profile we created as part of a CONSUMER REPORTS study of some 550 insurance quotes on 45 cars and light trucks. Indeed, the Frontenac couple would have paid State Farm only $1,700 to insure a $91,000 2002 Maserati, just $135 more than for the Neon.
To find out how the kind of car you choose affects premiums, we gave our profile couple a fictitious residential address in three ZIP codes, in Oakland, Calif., Frontenac, Mo., and Yonkers, N.Y. Then, using InsWeb, the largest independent insurance marketplace site on the Internet, we gathered rate quotes from four major national insurers that offered policies in those states--Amica, GE Auto Insurance, Kemper Direct, and Progressive. State Farm, the nation's largest insurer, with 19 percent of the market, does not participate in InsWeb, so we used the same model couple to obtain quotes from StateFarm.com. By holding the shopper profile and coverage limits constant, we were able to filter out the effects that driver and location have on insurance rates and isolate how the vehicle itself can influence the premium.
That study is just part of this month's examination of auto insurance, designed to give you the information you need to cut what can be one of the most significant costs of car ownership--higher than fuel bills, maintenance, or finance charges. We also studied how premiums on particular cars for our model couple vary from insurer to insurer, and we collected shopping and savings tips along the way. And with the help of two reporters and our Consumer WebWatch team, which assesses web-site credibility, we evaluated the six most popular insurance shopping sites on the Internet.
Our findings:
* Certain types of automobiles are cheaper to insure than others. Full insurance coverage cost the least for small sedans, minivans, and midsized family sedans in our sample--$263 to $328 per year less, on average, than the same coverage on large SUVs. Over the first five years of ownership, when lenders and lessors typically require full coverage, that would produce about $1,500 in savings.
* Insurance costs also varied from model to model within similar vehicle groups. Among 12 small sedans we compared, the Mazda Protege DX cost $233 more per year to insure than the Saturn SL2.
* Some cars showed tremendous variation in pricing from carrier to carrier, making premiums for them much more "shoppable" than others.
* Insurers used to charge the same driver the same price for liability coverage, which pays for damage done to others, no matter what the car. Now, however, some are charging the same driver hundreds more for liability coverage on certain vehicles--up to $238 more at Progressive and $480 more at GE for our model shoppers in Missouri. And since laws in most states require liability coverage, owners are stuck paying that extra amount as long as they own the car.
* The Internet's car-insurance shopping web sites proved disappointing. Among the six leading sites, we found that only one, InsWeb.com,...
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