By on November 14, 2017

NYC street driving

Insurance may be one of the greatest scams ever pulled on the general public, but it’s a very necessary evil. Right around the time the automobile became popular, people starting crashing them into things. By the 1920s, individual states began requiring drivers to purchase insurance — creating a pooled solution that covered at-fault drivers for damages they might be unable to pay otherwise.

However, not all drivers crash and not all vehicles incur the same costs when they take or deliver a beating. Collision losses might be astronomical for high-end sports cars but comparably moderate for midsize pickup trucks. The Insurance Institute for Highway Safety and Highway Loss Data Institute recently compiled the loss averages for hundreds of models, grouping them by segments, to establish how lightly-used autos stack up against each other. 

The data, compiled for 2013-2015 models, separates losses by collision, property damage liability, and comprehensive (accounting for frequency of claims and the average loss payment per claim), and injuries — which only factor in frequency.

According to the IIHS, all results are adjusted to reduce possible distortions from non-vehicle factors, like operator age, gender, marital status, model year, sales density, and average risk. However, we noticed that both medical payments and bodily injury coverage was far lower on vehicles people tended to drive less often and less aggressively.

Insurance Loss Averages MY 2013-2015

For example, the Chevrolet Corvette’s medical coverage losses were incredibly low while the Ford Mustang’s were abnormally high. As anyone who has ever watched a Mustang crash compilation video knows, this was to be expected. Stang owners are abundant and can’t leave a Cars & Coffee without hitting at least 10 objects, while Vette owners primarily rub their rides with a cleaning rag. That doesn’t mean the data is bunk, it just means frequency plays a major factor.

Size also had a role to play in terms of medical payments. For the most part, large trucks and SUVs had almost comically low loss averages on personal injury claims. Among the lowest were the Ford Expedition and Ford F-150, but even segment loss leaders like the Dodge Durango still incur significantly slimmer personal injury losses than most large sedans.

Insurance Loss Averages MY 2013-2015

Getting into collision losses, SUVs and pickups had the edge once again. While the disparity between cars wasn’t nearly as obvious, larger vehicles still tended to do a little better. That logic flies out the window once you factor in vehicle price, however. Luxury SUVs cost a lot to fix and collision claims clearly represented that. One notable exception was Acura, which boasted impressively modest losses for both the RDX and MDX.

Collision expenditures could generally be tracked by how expensive or sporty a vehicle is, making luxury sedans among the biggest insurance risks for providers. For example, the BMW M6 saw collision losses 349-percent higher than average, while the all-wheel-drive Volvo XC70 stood at only at 69 percent of average. This was mirrored in mainstream sedans too — hybrid powertrains and high-performance engines tended to cost more than traditional internal-combustion units.

There were, of course, plenty of outliers. Mini and micro cars fared exceptionally well overall, possibly because of their low repair costs or likelihood of being involved in lower-speed accidents. Meanwhile, minivans acted as a sort of happy medium between trucks and cars — providing a baseline without obvious highs or lows.

Insurance Loss Averages MY 2013-2015

There were also a couple of brands that appeared to outperform the competition. In most cases, Subaru and Volvo seemed less apt to incur sizable losses, regardless of segment. It wasn’t a catch-all, however. Sporting models like the WRX were still higher than average, while the Legacy was among the lowest in terms of midsize sedan losses.

Clearly, there is a lot to unpack here and a truly comprehensive analysis would take another two thousand words. Since the research is bound by collected insurance data, the results stop at 2015 but stretch back as far as 1989.

If you’re interested, we’d recommend you visit the IIHS website and peck around, looking at the segments and models which intrigue you most — and using this article as an initial point of reference. It should be interesting to read your takeaways in the comment section.

[Images: IIHS.org]

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52 Comments on “Which Segments Incur the Largest (or Smallest) Insurance Losses?...”


  • avatar
    brettc

    A European Dodge Journey? I didn’t know such a thing existed.

  • avatar

    “Insurance may be one of the greatest scams ever pulled on the general public…”

    Oh come on. The pooling of risk is necessary, as you point out. People can’t cover losses individually. When you burn your house down, that $50 a month suddenly doesn’t seem so bad.

    The insane profits are the scam part, but that’s down to companies being companies.

    • 0 avatar
      brandloyalty

      I would venture the degree to which people have been conditioned that operating a car makes life worth living is a much bigger scam.

      • 0 avatar
        Matt Foley

        If you don’t enjoy driving, why are you here, troll?

        • 0 avatar
          JohnTaurus

          To prove how smart and witty he is. To show how he’s “above” all us Neanderthals who do enjoy automobiles.

          • 0 avatar
            brandloyalty

            @JohnTaurus: If you bother to review my ttac posts you’ll find plenty of evidence I find cars interesting and useful. You will find one of those posts just above.

            I make no bones about my view that we have been conditioned into buying into sloppy private car use to an unhealthy extent. As far as I’m concerned that is a truth about cars. People of your view show no restraint in scorning non-enthusiats, so don’t have a tantrum when you occassionally get a bit of push back.

        • 0 avatar
          brandloyalty

          @Matt Foley: the name of the site is: “The Truth about Cars”, not “Hangout For Redneck Driving Cultists”.

          Why do you assume that pointing out the success and dubious value of car marketing proves one dislikes driving? Watch out for the dorsal fin.

    • 0 avatar
      Matt Posky

      All obligatory fees (insurance, taxes, feeding your children) are scams until you are able to reap the rewards directly. That’s why I recommend crashing your car instead of trading it in at a dealership. Put that investment to good use.

    • 0 avatar
      DenverMike

      You’ve never had your house burn down for you, I’m positive you don’t know anyone who’s house did, or ever met some one, or even heard of some one who had one burn down. The insurance industry is betting most spend more time watching the news than doing the math. Then fire insurance would be 50 cents a month.

      When you self-insure, take a little extra precaution, a couple extra preventive measures, you pocket the $600 a year, invest it wisely, and if you ever have a fire 30 years later, you’re still way ahead, except you won’t have a fire.

      • 0 avatar

        While I love your assumptions about the entirety of my personal knowledge and family, you are wrong.

      • 0 avatar
        bumpy ii

        Dunno about Corey, but it seems like someone’s house burns down around here every 2-4 months or so.

      • 0 avatar
        Adam Tonge

        Self insure? LOL.

        That’s fine for small things. Don’t go calling your insurance company for something that will be just over your deductible.

        But bigger things…its hard to self insure for that. I bought by house in 2012 and we had a flood in 2014 that caused $50K+ worth of damage. There was no way I could have self insured what the insurance company paid out. Chances are I probably won’t have another homeowners claim for awhile, but insurance did what it was supposed to do in my case.

        • 0 avatar
          DenverMike

          If you live in a fire or flood zone you might be pushing your luck, self-insuring. If it’s a “total loss” you could afford in the event, more reason to self-insure, but it also takes a common sense approach calculating risk.

          I do the same with my autos. I did carry simple liability on an expensive sports cars I owned outright at 20 years old and had a tolal loss “accident”. I drove extremely reckless though. What did I learn? To not drive recklessly of course.

        • 0 avatar
          arach

          @Adam Tonge

          I started self insuring my collector cars. In Ohio you don’t need car insurance if you self insure yourself.

          However, once I got older the insurance rates got so low I just started buying insurance. Its way easier and more convenient, and it only costs me about $150/yr per car.

          But what I do on both my home and my car is partial self-insurance- by taking a massive deductible. Therefore I’m covered by catastrophic losses to keep my home insurance cost about 0.2% of my house value. To me that’s a drop in the bucket, and worth it for those very rare occaisons like when my next door neighbor’s chimney caught fire.

          There are some legitimices to both sides. One thing we started doing at our company is self-insuring our fleet and then re-insuring our fleet as a whole. In other words, we self-insure our own cars but have an umbrella-like reinsurance policy for anything beyond the expected.

          Insurance is “technically” a losing game- you pay more than you expect to return, but if you cannot afford to lose what your insuring, its a great way to pool potential losses with others in your community. In the scheme of things, its really a cheap way to protect those things that are important to you.

          However, like you mention, by knowing it is a “losing game” you can easily take elements of self-insurance like high deductibles and not filing low dollar claims to keep your outflow low and keep more cash in your pocket while still benefiting from the pooling benefit of insurance products.

      • 0 avatar
        doublechili

        In the old days fire insurance companies had their own fire brigades. If you had a policy they’d put a medallion on the front of your house or business. In case of fire, if you had the medallion on your building they’d put the fire out. If not, they’d turn around and go back to the brigade house. Those were the good old days.

      • 0 avatar
        chuckrs

        Well, I have heard of someone whose house burned down. A work colleague had a kitchen fire in a 3000ft2 house. I saw it shortly after the multiple fire companies left. It didn’t look too bad, but ultimately, his insurance paid >$500K as the house had to be brought up to current code – damage exceeded 50% of rebuild cost. You insure against catastrophe and almost by definition of the word, they are fortunately rare.
        Self insurance would have left him without either a)a home, or b)a retirement fund. Much of the home’s value was accumulated appreciation over 20+ years.

        • 0 avatar
          brandloyalty

          @chuckrs: If the insurance industry is so good at harvesting cash, do you have considerable investments in the industry? Seems like a no-brainer according to your claims.

      • 0 avatar
        srh

        My father-in-law’s house burnt down.

        Let’s say you pocket that $600/year. After 30 years you have $18,000. OK, invest it. If you’re super, super lucky that’s $72,000. My house is worth about $900,000. $72,000 won’t even pay to rebuild the detached shop.

        So no, if you have a fire you’re not way ahead. And yes, you probably won’t have a fire. Insurance companies have to make money after all. But rolling the dice doesn’t work well when you’re talking unbounded liability and limited rolls.

        • 0 avatar
          DenverMike

          Yeah right! You’re insuring a near million dollar house for $50 a month?? Then mine should insure for no more than $5 a month!

          I’m not saying it’s not a “gamble” self-insuring, and if you can’t absorb the loss, then that increases the risk-factor a bit, but if you yourself were an “investment”, would you consider *you* too risky to mess with?

          Risky behavior, with a lot of it “calculated” is what got many of us from a dirt floor to Pergo, or better, with a lot of hard work and sacrifices. College is a gamble, but I’m confident my 1906 house will still be standing long after you and I are gone. Fire insurance is risky behavior for me.

          Houses don’t go up in flames as easy as you think. There’s a burned area in my attic rafters, so I asked the seller if it was an attempted arson. He said yes it was by one of his tenant’s criminally insane kids. The flames kept going out!

          • 0 avatar
            WildcatMatt

            Although I’ve never suffered a house fire (and pray I never will), the last apartment my wife and I lived in burned down when a neighbor smoked with oxygen. That’s something that’s out of my control.

            We lived in that apartment for 3,680 days and by my reckoning we paid close to $1/day for insurance on contents. While only a fraction of our possessions were lost — we were in the process of moving when it happened — it still resulted in a $10,000 claim.

            Even if our lease agreement didn’t require renter’s insurance, I still received a greater payout than if had put a dollar a day into the market.

      • 0 avatar
        random1

        Seriously? I live in a town with a population of 20,000, and I know two houses that burned down in the last 5-10 years. One a friend, one not somebody I know. And a 3rd of a guy I worked with. It’s not *that* rare. Obviously it’s still not terribly likely, but “don’t know, ever met, ever heard” is a bit much. You should get out more.

        • 0 avatar
          Featherston

          Not to pile on, but yeah, that was a weird assertion. A close friend’s house had a fire that was so big and spread so quickly that it killed the family cat. Fortunately, his wife and he got out, but they lost pretty much every possession except the clothes on their back.

          – – –

          Favorite, if you can have a favorite, fire story: Family friends have a very nice 1930s motorboat. One autumn, the owner of the storage facility where they normally kept it during the winter strongly suggested that they should confirm they had the best possible insurance. They took the hint and found an alternative facility for that off-season. Storage operator number one’s facility burned a couple of month’s later.

          Who says that there is no honor among thieves?

          • 0 avatar
            DenverMike

            When you look at the causes of most house fires, they’re easily preventable. No overloaded extension cords, candles near combustibles, etc. Just a common sense approach and smoke detectors/sprinklers/fire extinguishers if it helps you sleep better at night.

            Fear sells a lot of needless policies and over coverage. I should’ve got into the insurance racket!

        • 0 avatar
          philipwitak

          our family’s summer cottage burnt down – back in 1961, and it was full of houseguests at the time. no personal injuries, thank the gods.

          cause was determined to be faulty construction of it’s original fireplace, installed sometime in the 1920s, long before we assumed possession.

    • 0 avatar
      danio3834

      “Neddy doesn’t believe in insurance. He considers it a form of gambling.”

  • avatar
    brandloyalty

    Autonomous car technology will turn the car insurance industry upside down. Note the Subaru with Eyesight.

    Hardly surprising hybrids have slightly higher collision losses since their higher purchase prices would be reflected in higher writeoff payouts.

  • avatar
    Boff

    Regarding the Mustang, there isn’t sufficient data on the Mustang GT for medical losses. I guess we’ll have to blame V-6 and Ecoboost cars for all those Cars & Coffee mishaps.

    I’ll also note that the GT fares no worse than the non-GT in the categories for which there is sufficient data.

    Bottom line, I think statistical noise is driving a lot of what we are seeing here, outside of collision losses which are largely a function of relative repair costs.

    Pretty colours, though.

  • avatar
    MrIcky

    The profit made on underwriting has been shrinking for years, 2017 is going to be an underwriting loss for most insurers. Insurance companies have been making money on investments and lending more and more. Buffett used to espouse how much money insurance made but he’s been quieter on the subject now since AIG is taking some major hits.

    Localized catastrophic weather events have been really smacking the industry around world wide and although car insurance is big to individuals, it’s been property insurance that’s been driving the show lately.

    • 0 avatar

      Life insurance sales have been flat as well.

    • 0 avatar
      chuckrs

      “Localized catastrophic weather events…”

      They had 12 years of no US continental hurricane landfall – did they not prudently foresee that was an aberration and plan accordingly?

      • 0 avatar
        MrIcky

        I’m not talking about hurricanes. The industry is generally prepared for a hurricane or 2 and some tornados. Localized catastrophic weather events are smaller and generally in regions not prone to catastrophic weather and much harder to predict.

        Such as several areas in the country getting 500 year floods 2 to 7 times in 4 years, major ice and hail storms, 4 feet of snow where they average a foot, etc. Those kinds of storms have been more common the last 10 years.

  • avatar
    NeilM

    I don’t even know how to think about this data, since nowhere in the article is it stated what unit of measure those numbers represent. Cubits per light-year? Dollars per ft-lb per femtosecond? Imperial long crap-tonnes?

    • 0 avatar
      TR4

      From the web site:

      About these numbers
      All results are stated in relative terms, with 100 representing the average for all vehicles under a given coverage type. For example, a result of 122 is 22 percent worse than average, and 96 is 4 percent better than average.

  • avatar
    Sjalabais

    How do you explain the Kia Optima Hybrid’s data compared to its peers? Extra power, extra trouble? It’s, sort of, supposed to be an eco model.

  • avatar
    guardian452

    When I was looking at replacing my mazda 3 with a new v6 mustang my insurance bill would have dropped by more than half (keeping a ford escape on the same policy).

    When I actually did replace the 3 with an mx5 the insurance went down by a fair bit, about 70% of the previous rate, but not as much as if I had bought the mustang. Still, going from a 2011 economy car to a 2016 sport car, I wouldn’t have guessed that.

    We then traded the escape for a dodge challenger, it went up again but not enough to exceed the cost of insuring the 3.

    I have a perfect record, no claims, etc, etc… Right now I pay $160/mo to a reputable agency but I am in a no-fault state (KY).

    What the hell makes a base model blue mazda 3 2011 so expensive to insure? The damn thing didn’t even have an automatic transmission!

  • avatar
    stingray65

    If you look at the cars with the highest personal injury and medical payout claims they are almost all either cars purchased heavily by poor credit risk types (Chrysler 200, Kias, Nissans, Hyundai) and/or cars heavily in rental fleets (add Camry, Malibu, Mustang). Could be those are just the vehicle choices of lots of bad drivers, but it also smells a bit like insurance scam material – I bet there are lots of back and neck injuries and headaches that don’t show up on x-rays but “disable” the person from work and require compensation.

  • avatar
    DenverMike

    I’d have to say the F-150 incures the least losses since it’s 5-Star rated and good-size dents done by the owner or friend/family are left on to give them character, and don’t really affect resale. A Tahoe, Expedition, Escalade, etc, with the same damage, you have to race to the body shop.

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