Auto insurance collision and comprehensive coverage rates are
based on several factors, such as a vehicle's:
- original cost new
- horsepower, size, weight, other physical
characteristics
- year of manufacture (model year)
- vulnerability to damage, and
- sports features (speed, handling, styling,
seat capacity)
The above items are represented in a Vehicle Identification
Number (VIN). Besides being used as a sort of automobile fingerprint, each VIN
is converted into a number between one and twenty-six. At this point, the number
is called a "symbol." The higher symbols are assigned to higher end
cars such as Mercedes, Ferrari, and similar vehicles which represent the ultimate
in luxury, styling, sportiness, etc. Logically, the lower symbols are assigned
to modest cars, but even the little Yugo has a symbol higher than one.
Other Characteristics That Affect
Symbols
Insurance companies look at vehicle safety features, weight
to horsepower ratios, body styling, utility of the vehicle and many other factors
beyond the price of the vehicle when assigning a symbol. Generally, vehicles
that are known for their safety features (Volvos, Saabs, etc.) receive lower
symbols than comparably priced sedans and will cost less to insure. Two door,
two-seater, high horsepower vehicles will generally receive a symbol much higher
than their actual value because of their sport or high performance nature. Such
cars are built to attract drivers who take advantage of the speed and handling
ability of their cars.
An insurance company may actually increase or decrease
a symbol based upon the claims and damage repair cost history of a vehicle.
This can happen a few months or several years after a new model is introduced.
Symbol changes may also be made for vehicles that are prone to special dangers
such as vehicle rollover or gas tank explosions.
Why You Should Consider Symbols?
First, it will affect your cost to insure a new car. Ask
your agent about the differences that features make before buying a car. A simple
decision such as ordering a 4 door vs. a 2 door could make the difference in
hundreds of dollars in additional insurance costs over the years.
Second, insurance companies calculate their premiums based
only on factory built cars containing factory installed options. Other dealer-installed
options or aftermarket options (installed by custom auto shops) may not be covered
unless you tell your agent. Sure you'll have to pay additional premiums, but
that's better than the alternative of not having a feature repaired or replaced
after a loss. Cars, trucks and vans are big investments that need to be properly
insured. Talk your needs over with an insurance professional to make certain
that you're protected.
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COPYRIGHT: Insurance Publishing Plus, Inc. 2000
All rights reserved. Production or distribution, whether
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