[MrLOL]

Could one of you guys please explain to me how car insurance works in america ?

I'll give you a few facts about how it works in the UK. In the UK you pay a premium every year, but this premium takes into account

1) your age
2) your job, your address, points on your driving license, how many other cars you have in your household, where you park your car during the day, where you park your car at night, your previous accident history, generally everything they can think to ask you about
3) the car your insuring
4) how much the car is worth
5) how long you've had your license

They use all this information to build up a "risk profile" that is, how likely you are to have a crash into something, or somebody else. Your more likely to crash if you have a fast car, and your even more likely to crash if your under 21.

If your say, 17, then insurers will simply refuse to quote you AT ALL for fast cars. You want a quote on an M3 at 18 ? 99.9 % of insurers will refuse to deal with you. And those that will deal with you, will likely charge you something approximating $12,000. Not even the most richest of parents spend $12,000 purely on 1 years insurance. So young kinds by and large dont drive expensive cars like M3s and AMG Mercs.

But the thing that confuses me, is that you see on TV that its completely normal for kids in america to get themselves something like a mustang, as their first car, at 16/17.

Again, insurers in the UK will completely refuse to insure something like a V8 mustang for anybody under 21,and if they do, it will run into thousands of dollars.

So how does it work in the US ?

[MrLOL]

Obviously it does happen

But its not nearly as common as it is in the US due to the massive price tags that the insurance carries.

So essentially the insurance is a flat fee then ? it doesnt vary depending on what car your parents insure you on etc.. ?

[c0nstant]

spec 1 is an agent, ill bump this for you. hopefully he sees it

[c0nstant]

either that, or you can pm him lol

[lib]

Originally Posted by MrLOL

Could one of you guys please explain to me how car insurance works in america ?

I'll give you a few facts about how it works in the UK. In the UK you pay a premium every year, but this premium takes into account

1) your age
2) your job, your address, points on your driving license, how many other cars you have in your household, where you park your car during the day, where you park your car at night, your previous accident history, generally everything they can think to ask you about
3) the car your insuring
4) how much the car is worth
5) how long you've had your license

They use all this information to build up a "risk profile" that is, how likely you are to have a crash into something, or somebody else. Your more likely to crash if you have a fast car, and your even more likely to crash if your under 21.

If your say, 17, then insurers will simply refuse to quote you AT ALL for fast cars. You want a quote on an M3 at 18 ? 99.9 % of insurers will refuse to deal with you. And those that will deal with you, will likely charge you something approximating $12,000. Not even the most richest of parents spend $12,000 purely on 1 years insurance. So young kinds by and large dont drive expensive cars like M3s and AMG Mercs.

But the thing that confuses me, is that you see on TV that its completely normal for kids in america to get themselves something like a mustang, as their first car, at 16/17.

Again, insurers in the UK will completely refuse to insure something like a V8 mustang for anybody under 21,and if they do, it will run into thousands of dollars.

So how does it work in the US ?

It works very similar in the US. They use much of the same information to generate a similar risk profile.

If you're deemed a low risk you may only pay hundreds of dollars a year. If you're deemed a high risk you may pay thousands.

Most parents simply add their children to their existing auto policy. It's usually much less expensive that way.
Some go as far as buying the car and insuring it in the parent's name, listing the child as a part-time driver even if it really is intended to be the child's car.

The main difference is the highest risk people in the UK appear to be charged a LOT more than the highest risk people in the US. I'm guessing it's because you guys drive on the wrong side of the road

[Hawkeye]

Yeah, if your parents insure you on any vehicle they own you are insured on all of the vehicles under their plan. So the beater car is an easy way to get around the high premiums.

Insurance is generally cheap here. I am 25 with a speeding ticket and I pay near nothing for insurance (then again I live in a "safer" part of the US than most)

[E90SLAM]

Reminded me the Top Gear episode where the presenters pretend they are 17 and buy a used car and quote insurance. There are some quoted 3-4k GBP for a used car worth 1,000.

[leocdmg]

Well one thing to note here in america is whether you have military status or not. I had a toyota supra when I was 20 and my 25 year old buddy had an intergra. Granted my supra was a 91 and his integra a 94 I paid half for full coverage than what he paid for liability alone. This was in NJ where insurance is expensive as hell!!

[montreal red]

different countries have different insurance costs... even for very low risk drivers like a 40 year old M3 owner with a clean record, you'd be looking to pay about $1 to $1.5k for insurance in canada... but in the states, it could be as low as $500 or $600 a year.

i am 23 and i pay $3.5k/yr for my m3's insurance. its still quite expensive but still much cheaper than insurance in the UK.

then again, everything in the UK seems expensive. i pay only $300 for registration and roadtax for my vehicle every year. i believe in the UK, its many times that.

[fdsasdasdf]

Well as an upcoming actuary I'd love to be able to tell you exactly how it works, but I'm not done with my studies yet I'll gain some insight this summer doing an internship, hopefully.

[GreenPlease]

I'll summarize how it works here in the U.S.

You pay your premium, they don't pay for shit. /story