The Insurance Thread Continues

[Pete Kraus <Pete_Kraus@Emory.Org>]

Among many other good things, Al Powell writes (please excuse the
edits):

>Regarding the recent insurance thread.....

>I am convinced that (and of course, I state the obvious) insurance 
>companies use actuarial tables adjusted ONLY to maximize their 
>profits.  (aka: figures don't lie, but liars figure...)

>Case in point:  My 1983 Datsun 280ZXT vs my 1990 Audi 200.

>The Z just MIGHT have a resale value of $4500 . . . 

>The Audi is worth $7195 according to Edmunds, $10025 according to 
>Kelly (sounds good to me...) so let's say it's worth twice as much at 
>$9000. 

>Guess which costs a LOT more to insure?  The Z-car, of course!! 

>This makes NO sense.  

I had recent conversation with my State Farm agent on this very subject
after receiving an insurance bill or three containing the usual upwardly
creeping premiums despite a ticket-free no-claims record.  Why, I
asked, should my two year old Z28 cost more to insure now than when
it was new, even allowing for inflation?  And why should the Ford
pickup, with higher resale value than the 4KSQ, cost less than the
Audi, bearing in mind that both have the same coverage limits?

Her explanation, though incomplete, was not entirely illogical.  First,
consider the various category ratings insurance companies give to cars
regardless of driver age and record, presumably based on risk history
with the car (i.e. it costs more to insure a Z28 than a Camaro V6, even
if the replacement cost is approximately equal). Much of the difference
between Al's 280ZXT and his Audi 200 probably has to do with the Z
being, from the insurer's point of view, an inherently dangerous sports
car while the 200 is a fine upstanding sober sedan (heh, heh).

She went on to insist that vehicle replacement value is not nearly as
important a factor as the cost of parts to repair accident damage.  Parts
for the Z28 may cost more now than they did two years ago, ergo,
collision coverage rates are higher.  This kinda sorta makes sense but
still leaves many unanswered questions which I did not have time to
pursue. Can others, perhaps with insurance industry connections,
enlighten us further?

Pete
Pete_Kraus@emory.org
'85 4KSQ
'89 F250 4x4 diesel
'95 Z28