I’m getting quotes for auto insurance. My wife and I have two cars:
- 2015 luxury brand compact SUV with very low mileage
- 2010 mainstream brand hatchback with high mileage
My questions stem from how the relative pricing of various types of coverage for the two cars.
| Coverage | Relative Pricing | Question |
|---|---|---|
| Comprehensive and Collision | hatchback < SUV | None |
| Liability | hatchback > SUV for all but one; hatchback < SUV for the outlier | Why the inconsistency? |
| Uninsured Motorist | hatchback > SUV for all but one; hatchback << SUV for the outlier | Isn’t this counterintuitive? Why the inconsistency? |
| Overall | hatchback > SUV for all but one; hatchback << SUV for the outlier | Should I be suspicious of the outlier? |
Collision and Comprehensive are clearly driven by the cost of the vehicles that would need to be repaired or paid out. That makes sense to me.
In terms of the liability and uninsured motorist coverage, it seems to come down to the cars themselves, since most other factors are equivalent:
- Neither of us commutes anymore, so both vehicles are listed as “pleasure” and are expected to travel less than 5000 miles/year.
- Both are “garaged” at our home address.
- None of the quotes indicates primary drivers of a particular car. Even if there is an unstated assumption there, our driving records are essentially indistinguishable.
Both cars have airbags, antilock brakes, backup cameras, basic cruise control, and vehicle stability assist. The SUV also has daytime running lights and blind spot alerts.
I’m trying to understand:
Why do most insurers think the cheaper car is a higher risk than the more expensive one for uninsured motorist coverage? That’s counterintuitive for me.
How does the outlier company reach a different conclusion for both liability and uninsured motorist coverage than the others? Is that a red flag?
