Many drivers of smaller automobiles may be smiling about their fuel cost savings, but their smiles may soon fade when they start to realize that the auto insurance industry is taking a share of the money that they aren't paying for gasoline. Let it not be said that smaller automobiles don't come with a cost trade off.
An examination of automobile insurance premiums from The Wall Street Journal reveals that the nature of smaller autos makes them justifiably more expensive to insure. For some smaller cars, such as some of the new hybrid models, replacement parts can be difficult to obtain, and labor costs are sometimes higher than for conventional autos. Additionally, hybrid cars can often take longer to repair.
Hybrids in the News
Karen Block, an independent insurance agent in Medford Wisconsin, indicates that the situation is quite basic and easy to understand. She stated: "Smaller cars have statistically higher repair costs." The Wall Street Journal article reports: "A recent study by the Highway Loss Data Institute, an affiliate of the IIHS, found that overall insurance costs for crash damage were higher for 11 of 12 hybrid cars and SUVs than for their gas-only counterparts."
While the owners of smaller cars may be paying higher costs to have their own cars repaired, it should be noted that their premiums for property damage liability may be lower. This is due to the fact that, when compared to larger vehicles in similar collisions, smaller cars tend to do less damage to the things they hit. There is concern however, that this condition may also mean that smaller cars offer their occupants a reduced level of crash protection, which is why I keep myself surrounded by a full sized Chevy pick-up truck, and keep my wife in her well built Jeep SUV.