Why Insurance Premiums Differ Among Car Brands

Motor insurance premiums can vary hugely. There are many factors at play – for example the make and model itself. Here are some reasons why insurance costs may differ among different car brands:

Vehicle Value:

The market value of a car plays a crucial role in determining insurance premiums. This is because if a customer purchases comprehensive insurance, it covers all repair and replacement costs. In extreme cases, if the vehicle was damaged beyond repair, the insurer would have to compensate for the market value of the vehicle at the time of loss. As a result, we see higher insurance premiums for expensive and high-end cars.

Example: Rolls Royce costs on average $2 million and above.

Repair Costs:

A comprehensive policy will also cover repair costs. This is impacted by the availability and costs of spare parts. Some car brands may have higher repair costs, influencing the prices of insurance premiums.

Example: Land Rover is one of the most expensive cars to maintain and repair.

Performance and Engine Size:

High-performance cars or those with larger engines are often associated with higher speeds and greater risk. Insurers may charge more to cover these vehicles, considering their increased likelihood of accidents and potential for more significant damage.

Example: Lamborghini has high horsepower and engine capacity.

Claim History:

The historical claims data for specific car models or brands is also considered by insurers. Certain brands and models have a higher frequency of claims or result in more expensive claims. This can impact the insurance costs for those vehicles.

Example: The record payout for an insurance policy was for a McLaren.

Demographics of Owners:

The typical demographics of the car owners can influence insurance premiums. Brands popular among younger or higher-risk drivers may experience higher insurance costs.

Example: BMW positions itself as a young and sporty brand, attractive to younger drivers.

Brand Volume:

The volume of a particular brand can impact insurance premiums. 

Insurance companies tend to rely on risk pooling to buffer and reserve for potential claims. Brands with higher volume have a larger base to collect premiums from, and tend to have more buffer reserves, resulting in lower average premiums per vehicle. 

Example: Toyota has a higher volume than Proton.

Get insured with the right help.

Having an expert on your side to help you pick the right insurance plan and find the best price can be a big help. If you need help finding the right insurance coverage, consider working with an experienced broker like eazy. Our team can advise you on various insurance plans, including motor, health, corporate, lifestyle, and marine coverage. Speak to us today to get your insurance needs covered.