When people ask us for a car insurance quote, many people ask us why one type of car is more expensive to insure than another. They wonder, why do insurance rates change? To help illustrate the answer, we’ll give you an example:

In this case, we have two cars and two drivers:

The first car is associated with one of two drivers: The 1988 GMC is rated for Fernando, and as he is a new driver, the rate is reflected as such. The second car, has a different driver. Yet both will drive each vehicle. We will assign a primary driver to each vehicle. The insurance rates end up being different for each. Here’s why:

The 2010 Ford F150 costs more to insure than the 2010 Dodge because when the F150 is damaged, it costs more than the Dodge. In our business, we look to how the physical damage rating for the unit – each auto – measures ups. Some vehicles cost more to insure because the the physical damage (collision, comprehensive) to repair or replace the vehicle, is more expensive, due to how it is rated with the Insurance industry “CLEAR” rating system.

So What does “Clear” mean?

When looking at a person’s insurance rate, “CLEAR” stands for “Canadian Loss Experience Automobile Rating.” It is a professional insurance standard that look to to help customers. The rating system takes many factors into consideration when the rate groups are assigned to a vehicle. They include safety features of an auto, like anti lock brakes, or a personal history with claims occurrence… in other words, how often a particular auto is stolen, or even right down to the model of a unit. We wonder, is it a 4 door or 2 door vehicle? It’s important to us insurance geeks! In answering that, although the rating and driver is identical for both of these trucks, the Ford poses more of a “threat” to insure than the Dodge does, as it appears within the CLEAR rating system and acts as the reason for the difference in price.

I have attached a copy of the last change done on the policy where the two units are showing identical coverage and use, however the rate groups , CLEAR rating system, of the two units are different. The Ford is higher, especially on the comprehensive coverage, so I would wager a guess that the statistics in Canada show that a Ford F150 gets stolen more times than a 2010 Dodge Ram, so the rate is higher on the Ford.

I hope that “clears” up the explanation and please let us  know in the comments if there are any more questions!