Higher insurance correlated with higher BHP, is it a myth?
Discussion
There's a common perception that higher power output and bigger engines leads to higher insurance premiums, but in all my experience of playing with comparison sites, I have never really found it to be the case.
What seems to matter with regards to cars is how likely a certain model is to be written off, which generally means youthful hatchbacks. More powerful cars are clearly not a high risk category, probably because most owners are either enthusiasts or older so generally more careful drivers.
How did this misconception start, and why is it so prevalent?
What seems to matter with regards to cars is how likely a certain model is to be written off, which generally means youthful hatchbacks. More powerful cars are clearly not a high risk category, probably because most owners are either enthusiasts or older so generally more careful drivers.
How did this misconception start, and why is it so prevalent?
DarkVeil said:
There's a common perception that higher power output and bigger engines leads to higher insurance premiums, but in all my experience of playing with comparison sites, I have never really found it to be the case.
What seems to matter with regards to cars is how likely a certain model is to be written off, which generally means youthful hatchbacks. More powerful cars are clearly not a high risk category, probably because most owners are either enthusiasts or older so generally more careful drivers.
How did this misconception start, and why is it so prevalent?
In the absence of being able to analyse such significant amounts of data, insurance estimates were based on more 'common sense' factors alongside what could be derived from historical information.What seems to matter with regards to cars is how likely a certain model is to be written off, which generally means youthful hatchbacks. More powerful cars are clearly not a high risk category, probably because most owners are either enthusiasts or older so generally more careful drivers.
How did this misconception start, and why is it so prevalent?
The amount of data recorded and in a state that's able to be incorporated in to the premium calculations now means that 'common sense' is utterly irrelevant, and it is far more accurately tied to the statistical reality of historic claims etc. Except for gender of course as the statistical reality that men are likely to cost the insurer more than women was deemed sexist.
EDIT:
Some good examples of reality not matching 'common sense':
Parking on driveway less risky than parking in a garage, because people tend to hit their garage and have to claim.
Third party often more expensive than fully comp, because people who go third party only are more likely to claim (under the assumption it's cheaper).
Paying monthly more expensive than up front, but not just from a finance perspective, but because of the claim profile of those who pay monthly.
Arranging your insurance weeks in advance is cheaper because the profile of those who do is less risky.
Anecdotal, but I think once you get beyond a few modifications, it actually makes no difference or potentially becomes a bit cheaper if you have a full on shopping list of changes, again because those that provide so much detail tend to fit a different risk profile.
Edited by SturdyHSV on Tuesday 21st November 10:55
My experience is the same, only a weak correlation. Seems to be much more linked to probability of write off/stolen
Had a W204 C63 city centre Manchester postcode, paid around £1k per year for the two years I had it. Was looking briefly at W212 E63's (5.5 biturbo) which are around 100bhp more and prices were cheaper by about £200. Guess its the fact that alot less wannabe 'certi drivers' drive a E63 than the W204 C63 which has a certain reputation
Looked at 3.0d X5's randomly and cheapest quote was £2500 for something which has 250bhp.... says it all!
Had a W204 C63 city centre Manchester postcode, paid around £1k per year for the two years I had it. Was looking briefly at W212 E63's (5.5 biturbo) which are around 100bhp more and prices were cheaper by about £200. Guess its the fact that alot less wannabe 'certi drivers' drive a E63 than the W204 C63 which has a certain reputation
Looked at 3.0d X5's randomly and cheapest quote was £2500 for something which has 250bhp.... says it all!
I think it used to be a major factor years ago, but isn't so much now.
It seems to be more about how prone certain newer models are to getting stolen, and while higher powered models still feature like Audi RS, BMW M and Mecredes AMG feature quite highly so do Range Rovers.
And EVs seem to have got expensive to insure too.
But older cars seem to be completely different. In 2019 I had a BMW 3.0Si Z4 Coupe with a couple of modifications and replaced it with a Z4M Coupe with a few more modifications and another 80BHP, but my next renewal was cheaper than what I had to pay for the 3 litre.
It seems to be more about how prone certain newer models are to getting stolen, and while higher powered models still feature like Audi RS, BMW M and Mecredes AMG feature quite highly so do Range Rovers.
And EVs seem to have got expensive to insure too.
But older cars seem to be completely different. In 2019 I had a BMW 3.0Si Z4 Coupe with a couple of modifications and replaced it with a Z4M Coupe with a few more modifications and another 80BHP, but my next renewal was cheaper than what I had to pay for the 3 litre.
(And I have a theory that what’s actually happening is that higher risk cars tend to be bought by higher risk drivers, rather than that the cars are inherently risky - I suspect that a hypothetical 20 year old who had a Golf R because for some reason it was the only car available and didn’t give a toss what he drove would be less risky than one who was living on beans on toast just to have one. Modern bread and butter cars have the performance of 80’s hot hatches without the insurance loading)
I remember when car reviews in magazines would always mention what insurance group a car was in. Used to be 1-20 in the 90’s. People used to obsess over it when choosing cars especially younger drivers. I can honestly say I haven’t seen any correlation whatsoever.
Whatever I buy now seems to cost about the same to insure. Big/little/powerful/slow/expensive/cheap etc. Doesn’t even seem to matter too much whether I use NCD or not. I take all this to mean that the driver and where they live has by far the biggest weighting when it comes to pricing.
Whatever I buy now seems to cost about the same to insure. Big/little/powerful/slow/expensive/cheap etc. Doesn’t even seem to matter too much whether I use NCD or not. I take all this to mean that the driver and where they live has by far the biggest weighting when it comes to pricing.
He would have an astronomical premium because of his profession anyway. I think sports people have very high premiums too, because of their profession. Load up a bunch of your celeb mates who might earn millions, have an accident at 4am after a showbiz party etc.
Was watching a program about the rising premiums for EV’s, because of an immature battery infrastructure, they are writing off EV’s with any kind of battery pack damage because there aren’t many firms that can assess and fix them. Tesla too, their gigapressed front and rear ends are currently unfixable so moderate damage is going to write off cars that would be repairable if built with ‘normal’ construction methods. Proper support industries need to form around these EV’s before their premiums will drop.
From personal experience, the performance of a car has a very high correlation with premiums as a young unexperienced driver and tails off the older you get.
Was watching a program about the rising premiums for EV’s, because of an immature battery infrastructure, they are writing off EV’s with any kind of battery pack damage because there aren’t many firms that can assess and fix them. Tesla too, their gigapressed front and rear ends are currently unfixable so moderate damage is going to write off cars that would be repairable if built with ‘normal’ construction methods. Proper support industries need to form around these EV’s before their premiums will drop.
From personal experience, the performance of a car has a very high correlation with premiums as a young unexperienced driver and tails off the older you get.
Edited by wyson on Wednesday 22 November 07:52
DarkVeil said:
There's a common perception that higher power output and bigger engines leads to higher insurance premiums, but in all my experience of playing with comparison sites, I have never really found it to be the case.
What seems to matter with regards to cars is how likely a certain model is to be written off, which generally means youthful hatchbacks. More powerful cars are clearly not a high risk category, probably because most owners are either enthusiasts or older so generally more careful drivers.
How did this misconception start, and why is it so prevalent?
Same reason some blokes believe all attractive women to be lesbians. It's a simple coping mechanism for rejection What seems to matter with regards to cars is how likely a certain model is to be written off, which generally means youthful hatchbacks. More powerful cars are clearly not a high risk category, probably because most owners are either enthusiasts or older so generally more careful drivers.
How did this misconception start, and why is it so prevalent?
. One's choice of car must be being discriminated against because it is so powerful and manly. Without that self delusion is the bare reality that the algorithm has identified one as a loser who has a car typical of people who can't drive, desired by scum and that you live in a s
tty hole surrounded by aforementioned scum. But you can't win. Years ago in central London my 540i was being quoted £4K to insure because I shared a postcode with an army of scrotes down the road who worshipped all things BMW and weirdly openly confrontational to other people in 'their' BMWs. Yet the TVR V8 parked next to it was quoted less than £400 by most run of the mill insurers which was hugely insulting as it very clearly meant that people didn't want to steal it, didn't want to drive it off the road for trespassing, didn't want to get whiplash from it and didn't want the wheels from it.
It was harsh learning from one V8 quote that you were uncool, off trend and had nothing the street wanted but then equally harsh to learn that the price of being street cool was £4K and you couldn't afford it.
Cheapest insurance is typically about not driving a scummer car, not living in a scummer zone and not having a scummer career.
SturdyHSV said:
Some good examples of reality not matching 'common sense':
Parking on driveway less risky than parking in a garage, because people tend to hit their garage and have to claim.
Third party often more expensive than fully comp, because people who go third party only are more likely to claim (under the assumption it's cheaper).
Paying monthly more expensive than up front, but not just from a finance perspective, but because of the claim profile of those who pay monthly.
Arranging your insurance weeks in advance is cheaper because the profile of those who do is less risky.
Anecdotal, but I think once you get beyond a few modifications, it actually makes no difference or potentially becomes a bit cheaper if you have a full on shopping list of changes, again because those that provide so much detail tend to fit a different risk profile.
Just curious how you know those examples. Do you have access to the statistical data to show the correlation and causation?Parking on driveway less risky than parking in a garage, because people tend to hit their garage and have to claim.
Third party often more expensive than fully comp, because people who go third party only are more likely to claim (under the assumption it's cheaper).
Paying monthly more expensive than up front, but not just from a finance perspective, but because of the claim profile of those who pay monthly.
Arranging your insurance weeks in advance is cheaper because the profile of those who do is less risky.
Anecdotal, but I think once you get beyond a few modifications, it actually makes no difference or potentially becomes a bit cheaper if you have a full on shopping list of changes, again because those that provide so much detail tend to fit a different risk profile.
otolith said:
You have to keep in mind the interaction between factors. The older and more experienced you get, the less difference what you drive makes, particularly if you’re not a high theft risk.
My own quotes seem to match this theory. In the 10 or so years I've lived in my current property, through my forties, my insurance has been around £500 no matter what car it has been over a wide range of values and power - from a £500 Subaru to a leased £30k Volvo, and that 115bhp diesel Volvo to a 500bhp M5.Truckosaurus said:
My own quotes seem to match this theory. In the 10 or so years I've lived in my current property, through my forties, my insurance has been around £500 no matter what car it has been over a wide range of values and power - from a £500 Subaru to a leased £30k Volvo, and that 115bhp diesel Volvo to a 500bhp M5.
Yup. I've pretty much sat between £250-£500 for cars for the last twenty years with the more valuable and expensive ones tending to be cheaper than the run of the mill stuff, arguably as a function of them being used less and stored better. In general terms, the cost of insurance has fallen with time/age in this regard. This is the first I've heard of this.
It's purely statistics. If you live in London or Birmingham where alot of people have thief on their CV then getting insurance is harder and/or more expensive.
If the particular car you're trying to insure is stolen alot or expensive to repair, think Range Rover then again it will be expensive to insure.
If the risk pattern of some XX years old that wants to insure something powerful that is rarely recorded as stolen, damaged etc for their age and location then the premiums will reflect that.
It's purely statistics. If you live in London or Birmingham where alot of people have thief on their CV then getting insurance is harder and/or more expensive.
If the particular car you're trying to insure is stolen alot or expensive to repair, think Range Rover then again it will be expensive to insure.
If the risk pattern of some XX years old that wants to insure something powerful that is rarely recorded as stolen, damaged etc for their age and location then the premiums will reflect that.
satfinal said:
Far, far, FAR too many variables that go into an insurance quote to focus on one data point
I agree.There are though some general picture points which when put together can indicate a riskier vehicle owner and location. The date which is relevant is likely about the typical/generalised data on owner of a specific vehicle and the other people you will interact with in your area or roads, not really much about the vehicle.
My SLK32 AMG was insured as an SLK320. 350bhp v 200bhp.
I asked the bloke eight times if he was sure.
Ran it like that for three years but I'm glad I didn't have to test it in a claim situation.
In the seventies my brother bought a 1969 Cooper S that had an extra loading because it was red. He had the car for so long eventually it was lumped with the 1275GT.
Logic doesn't seem to influence the arithmetic.
I asked the bloke eight times if he was sure.
Ran it like that for three years but I'm glad I didn't have to test it in a claim situation.
In the seventies my brother bought a 1969 Cooper S that had an extra loading because it was red. He had the car for so long eventually it was lumped with the 1275GT.
Logic doesn't seem to influence the arithmetic.
My basic understanding is it's about risk and how commonly claimed on a particular vehicle is.
I went from a 260bhp RS Megane to insuring a 510bhp Merc CLS and the premium didn't change. I assume a hot hatch is more risky than a 'sensible' saloon car. Plus I'm guessing less claims on a CLS due to having a different audience perhaps than hot hatches.
So no the cost of insurance isn't by default based on bhp from what I've experienced.
I went from a 260bhp RS Megane to insuring a 510bhp Merc CLS and the premium didn't change. I assume a hot hatch is more risky than a 'sensible' saloon car. Plus I'm guessing less claims on a CLS due to having a different audience perhaps than hot hatches.
So no the cost of insurance isn't by default based on bhp from what I've experienced.
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