I’m hoping someone here can shed some light on this:
We have a 2021 Toyota Highlander Hybrid Platinum 4WD that was around $60k new and is still worth over $40k. We recently bought a 2021 Toyota Corolla LE for about $18k.
Surprisingly, our insurance company is charging us $600 more per year for the Corolla than the Highlander, even though both have the same coverage, drivers, and usage (both listed as commuter cars). Liability, collision, PIP—everything is more expensive on the Corolla, except comprehensive, which is $20 cheaper.
The Corolla has no accident history, was a one-owner vehicle, and isn’t modified. It’s not exactly a performance car either.
We asked our insurance agent, but they had no explanation. Any ideas why this might be the case?
Your insurance rates could be based on different factors than when you originally insured the Highlander. Also, new policies tend to be priced higher than existing ones.
You could ask your agent to quote you on adding another 2021 Highlander with the same trim and coverage. I bet the new Highlander’s rates would be higher than what you’re currently paying for the one you already have.
@Gray
If that’s the case, shouldn’t my Highlander’s cost also be increasing to match? We renew every six months, and the cost does go up each time, but not by that much.
As far as I know, there aren’t strict limits on how much insurers can raise rates.
@Haze
There are limits—insurance companies have to get rate increases approved by the state insurance commission. They can’t just double rates overnight, though they can (and do) raise them incrementally over time.
The accident and claims history for Corollas might be worse. If more Corollas are involved in accidents or their repairs tend to be costly, insurers adjust rates accordingly.
Insurance companies assign a primary driver to each vehicle. If the driver they see as ‘higher risk’ is assigned to the Corolla, that could increase its rate.
Corollas are also often driven by younger or older drivers, who statistically file more claims. That might be playing a role here.
@scofield
For #2, I just checked, and every vehicle on our policy is assigned the same way—I’m listed as the primary driver, my wife as secondary, and the other two as additional drivers. So that’s not it.
I get the accident history point, but it’s still surprising. The Corolla is one of the most common cars on the road, and being smaller and easier to maneuver, you’d think it would cause less damage in a crash. It also has cheaper parts, fewer expensive features, and doesn’t seem like the kind of car that would be frequently targeted for lawsuits compared to a high-end SUV.
I was expecting it to be cheaper to insure than the Highlander, not $600 more. Guess we’ll just have to shop around for better rates.
@Haze
I get what you’re saying, but popularity doesn’t mean a car has better accident rates. Corollas tend to be popular among two groups—new drivers and older drivers—both of whom are statistically more likely to get into accidents.
The insurance industry uses actual claims data, and if they see Corollas getting into more accidents or causing expensive claims, the rates reflect that.
I know it’s frustrating, but the best way to avoid surprises like this is to get a quote before buying a car.
@scofield
That makes sense, but it’s frustrating that insurance pricing is so opaque. Even our insurance agent couldn’t explain why the Corolla is more expensive.
As for getting a quote beforehand, the issue is that insurers want an exact VIN. By the time you get the quote, the car could be sold, and if you’re considering multiple models or years, no agent is going to run 20 different quotes for you.
@Haze
I totally get that. It’s one of those things that would be easier if the insurance industry were more transparent.
The info is available in rate filings, but most agents don’t have access to that level of detail. Their job is more about selling policies, not understanding every factor that goes into pricing.
If you’re frustrated, shopping around is your best bet. Different insurers weigh risk factors differently, so you might find a better rate elsewhere.