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If you’ve been looking forward to insure your car and spent some time on learning the basics of this type of insurance you’ve probably noticed that the rates vary significantly depending on the type of car you’re trying to cover. The vehicle you want to insure is definitely the most crucial factor when it comes to determining your rates. And the types of vehicle you drive can put you in a particular risk category according to the insurance provider’s classifications. So, the logic question would is: what types of cars will be costly to insure and which won’t? Let’s go through all main types of cars we see on the road.

Small cars

Small cars usually cost less and have good gas mileage. Yet it’s usually more costly to insure this car type because the damage delivered in course of a typical accident is excessive and involves higher repair and medical costs.

Medium sized sedans and hatchbacks

These cars usually cost more and fill the price range from budget to business class vehicles. The rates at which this particular car type gets insured vary to a certain degree yet they are usually more affordable than for smaller vehicles because mid sized vehicles usually have better safety ratings and don’t involve as much costs after a typical collision. Yet, it all depends on a particular car make and model as there are always exceptions to any rule.

SUVs

Large SUVs and minivans are certainly very comfortable from the driver and passenger point of view. Yet, if you’re looking for cheap car insurance it may be a wrong pick. This vehicle type is known for its increased safety bud due to the larger size these cars tend to deliver more damage to other cars and elements of infrastructure, which results in higher repair cost towards the other party involved. (more…)

We live in the cradle of capitalism. No matter what the Occupy movement may actually want to happen to Wall Street (and that’s by no means clear), the underlying truth is we all depend on the financial system for America’s economy to work. It’s therefore reassuring when we see the latest consumer survey show confidence at the highest level for the year. As a nation, we are starting to buy more goods and services. With increased demand, our industrial and service sectors can slowly return to profit. As all of us who watch the stock exchanges will know there was a marked drop in values followed by considerable volatility. There’s been slow upward movement and many of the larger corporations have managed to maintain their dividends despite the recession and its aftermath. Taking the general view, this is good for the economy. Taking a more limited view, times have been difficult and this has put a break on the profitability of the service sector including the insurance industry. Insurers cannot continually increase the premium rates to their clients when even a small increase in business overheads may be the difference between survival and bankruptcy.

It’s therefore interesting to see the commercial insurance market now beginning to increase its rates. Not surprisingly, the companies formally announcing this trend have seen their stock prices rise – an increase of revenue triggers greater profits and better dividends. For businesses of all size who must carry insurance, this is bad news. Already under pressure, seeing the premium rates go up by 5% and more is not welcome. Looking across the commercial sector, it’s difficult to get an overview. Neither side of the bargain publicizes the rates paid for each type of policy. Every company wanting cover, regardless of size, negotiates with the insurance industry based on their individual risks. Most of the rates are tailored within bands. Nevertheless, there are more general signs of rising rates. MarketScout, an insurance exchange based in Dallas, showed rates rising by 1% in November.

In a way, we should not begrudge the insurance industry a little latitude. Under normal trading conditions, it invests its premium revenue in stock exchanges and different forms of portfolio. When the recession arrived, investments lost their capital value and underperformed in returns. By coincidence, there have also been a series of bad years for claims with 2101 and, now, 2011 breaking records for catastrophic weather events. It’s ironic to see revenue falling at a time when extraordinary amounts of money have been paid out. The insurers need to start the process of filling their bank accounts and making new investments, hoping to recover their previous strength. (more…)