UNINTENDED CONSEQUENCES: Why Your Extra-Safe Car Costs More to Insure.
Enabling the safety tech are cameras, sensors, microprocessors and other hardware whose repair costs can be more than five times that of conventional parts. And the equipment is often located in bumpers, fenders and external mirrors—the very spots that tend to get hit in a crash. Insurance companies, unwilling to shoulder all the pain, are passing some of the cost off to buyers.
Jeff Woods, a professor in Illinois, recently bought a 2017 Volkswagen Passat to replace a two-year-old model. It was loaded with so-called active safety equipment. So he wasn’t expecting his State Farm insurance policy to spike 20% to $1,200 a year.
“I was told by the car dealership all the technology would improve the cost of insurance,” Mr. Woods said. “Instead, it went up.” Volkswagen AG declined to comment on Mr. Woods’ experience but said it is “proud to offer advanced-safety technology systems on our vehicles.”
Mr. Woods ended up negotiating a price reduction with State Farm.
Don’t accept the first number they give you.