Insurance Claims-Cost Booklet: Did You Even Know It Exists?

Since 1993, car dealers have been required by law to keep on hand a booklet with information on damage susceptibility for different makes and models of cars. The booklet was intended by the Department of Transportation to be an informational guide for consumers who want to get a feel for a specific car’s crashworthiness and its relative insurance costs.

But a group of federal lawmakers is saying that only a tiny fraction of consumers actually request to review the booklet and that dealers should no longer be required to keep it on hand. So what is this booklet, and can it actually be a reliable indicator of relative insurance costs?

The booklet contains model-specific information, compiled by the Highway Loss Data Institute, based on claims data collected from insurers across the country. The data in the booklet show how the size of claims for a specific model of car compares with the average for all cars. The average score is set at 100, so cars with scores that are above 100 tend to have larger-than-average claims costs and cars with scores below 100 tend to have smaller-than-average claims costs.

What does this tell consumers? In theory, it tells them 1. that they can expect larger repair bills for cars with higher scores and 2. that they can expect to pay larger insurance premiums for cars with higher scores. But is that the case?

All auto insurers look at the type of car you have when they’re considering whether to insure you and, if so, how much to charge you for coverage. And the reason’s simple: If you’re coming to them with a car that has an average repair cost of $13,500 dollars, you’re likely to cost them more than if you had a car with an average repair cost of $2,500.

But according to a report from the Committee on Energy and Commerce, the booklet’s “value to consumers in estimating insurance premiums is questionable. The insurance cost data is general, averaging repair costs from incidents ranging from a low-speed fender collision to a vehicle rollover.”

The report goes on to quote the Obama administration as saying the following:

“Though these rankings provide an indication that one model will have a higher collision insurance premium than another, a prospective buyer still must consult an insurance agent to determine how much the premium will differ according to that person’s specific personal information.”

What that means is a 60-year-old suburbanite driving a minivan with a low claims record is still probably going to pay less for coverage than a 16-year-old driving the same car in a densely populated urban area.

But still, the book does have some value. If the 60-year-old suburbanite is trying to decide between two minivans for his next purchase, the data contained in the booklet could act as a tie-breaker. And consumers will still be able to access the information even if the Senate does pass the legislation that would get rid of the booklet. That’s because the HLDI will still make the insurance losses by make and model available on its website.

If prospective buyers truly want to know exactly how much insurance will cost for one car compared with another, the only surefire way to do that is to contact their insurer and get quotes for each car. So if you haven’t heard of the claims-cost booklet before, don’t worry. There are plenty other ways to check up on insurance costs. They might be a little more time-consuming, but they’re bound to be more accurate.

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