There’s a price to pay for riding in style. Nobody has ever said that style is cheap, and when you are a convertible owner, that is true in more ways than one. After stomaching the higher sticker price and maintenance costs, your insurance bill can be a whopping 30% higher than a traditional car. The rumors about the hidden costs of convertible ownership are sadly true.
Understanding how insurance companies calculate rates in the first place will help to make sense of the high rates for convertible owners. When an insurance company sells you a policy, they are assessing the amount of risk they are taking on while still trying to turn a profit.
Suppose you appear to be a safe and responsible driver that avoids risky situations. In that case, insurance companies can’t wait to write you a policy because chances are, they will never need to write you a check to replace your car. But if they assess that you may be a risky driver or live in a high theft area, they will charge you more to cover the perceived risk they are taking on, knowing chances are higher that they will need to cover the cost of repairing or replacing your car.
So how does an insurance company decide the dollar amount when they are willing to sell you a policy and take on the risk you pose as a driver? It’s a complex algorithm that is different for each insurance company. As the value of your vehicle, or the perceived risk of you as a driver, increases, so will your insurance premiums.
Not only are they looking at the car you drive, potential repair costs and replacement value, and the risk of being involved in an incident, but they are also looking at your age, zip code, driving history, and even your credit score. Their calculations will spit out a dollar amount that they decide makes the risk of insuring you profitable to them. Unfortunately for convertible owners, convertibles are perceived as being higher risk for several reasons.
Why is Insurance Higher for Convertibles?
$$$. We will start with the obvious. Convertibles are more expensive cars, meaning the replacement value will cost the insurance company more. As a result, they will raise your premiums to try and recoup some of the risks of insuring your expensive car. Convertibles are also built differently than traditional cars. While convertibles don’t get into more accidents than their traditional counterparts, their complex systems and engineering lead to higher repair costs.
Powerful Engines. If your convertible is a sports car with a powerful engine and high horsepower, your insurance company assumes you drive fast. Higher speeds lead to more accidents and more extensive damage in the event of an accident. Therefore, your insurance company will increase your premiums to offset some financial risks.
Higher Rates of Theft. Soft top convertibles are a magnet for thieves, who can gain access to the cabin of your car by cutting through the soft top. Easy access to convertibles results in higher rates of stolen personal belongings as well as instances of thieves driving off with your car.
Heavier Weight. Hard-top convertibles, in particular, weigh more than their sedan counterparts. The solid top and the mechanism that operates the top add significant weight to the car. A ratio of horsepower to curb weight can be used to calculate insurance rates, resulting in a higher cost for convertible drivers.
How Can I Get Lower Insurance Rates?
Keep a Clean Driving Record. A clean record is a surefire way to convince your insurance company that you deserve a discount. In their overall assessment of risk, your driving record is the easiest way to convince an insurance company that you are safe on the road.
Shop Around. Every insurance company determines its rates in slightly different ways, so if you feel your insurance quote from one company is too high, shop around, and get a handful of quotes to determine the one you are most comfortable with.
Look for Smaller Engines. If you don’t need, or even want, the big engine and horsepower that will drive up your insurance prices, look for a comparable convertible with a smaller engine. Even with a smaller engine, you will feel like a million bucks on the road without feeding more money to your insurance company.
Invest in Security. Since convertibles are more prone to theft, having high-tech and up-to-date security systems may convince your insurance company to lower your rate.
Choose a Higher Deductible. Not everyone wants or is financially prepared to carry a higher deductible on their insurance policy, so while this isn’t an ideal solution for every situation, it can save you money over time. If you can stomach a higher deductible, in the event you need to make an insurance claim, you will save money on your monthly insurance bill.
If you are a safe driver prepared for higher out-of-pocket costs in the event of an accident or theft, you may end up paying the insurance company a lot less money (especially if you don’t need to make any claims).
Improve Your Credit. While some states (California, Hawaii, Massachusetts, and Michigan) have deemed it illegal to factor your credit score into your insurance rates, many insurance companies add your credit into the equation when determining rates. That’s why improving your credit score could lead to lower insurance premiums.
Will higher insurance stand between you and your dream of owning a convertible? Probably not. It’s a small price to pay for getting to drive the car of your dreams. But given a little work and careful planning, you can drive the cost of your insurance policy down to a rate that is easier on your pocketbook. You can also find peace of mind knowing you are covered if anything goes wrong.