Are SUV’s harder to insure or more expensive?

Not only do they have a higher ticket price at the dealership and cost a mint to fill-up, SUV’s are also a magnet for high insurance premiums. On average, it costs 10-20 percent more to insure a SUV than a regular car.

So why the big increase?

More often than not, SUVs cause more damage to other vehicles when they are in accidents. Chances are that a goliath SUV will do some pretty hefty damage to a two-door convertible. This raises the payout rates for the insurance company, and therefore liability premiums increase.

Even if you are a safe and careful driver, SUVs have historically fared much better than their counterparts in accidents. This is not to say that a driver in an SUV is safer necessarily, but they feel safer. And this feeling of safety is exactly the reason why many drivers still choose to drive the behemoths. It is estimated that about 12% of all vehicles on US roads are Sports Utility Vehicles.

But SUVs aren’t without their own inherent dangers. While progress has been made in safety design and roll-over prevention in the past years, SUV’s still have a greater potential to flip during high-speed turns, in collisions, or when avoiding accidents. They sit higher off the ground, which means their center of gravity is less balanced and they become “top-heavy”. To the insurance company, rollover accidents are very costly in terms of vehicle repairs and personal medical expenses.

SUVs have also recently become very coveted among car thieves, costing millions of dollars in replacement claims. According to the Highway Loss Data Institute, the Cadillac Escalade was the most stolen vehicle in 2004. To replace the Escalade, an insurance company can pay upwards of $18k.

Repairs on an SUV are also quite expensive. Insurance companies will pay quite a bit of money towards body and engine work, even in the most negligible collision. This is because SUVs do not have to meet the bumper standards set by the federal government’s in terms of withstanding fender benders. Just a slight tap on the rear can cost hundreds of dollars.

The high risk factors of SUVs equate to a potential for high medical, liability, and settlement payments for the insurance company, and they must recoup those costs in the form of higher premiums.