Is Insurance More Expensive for Pricier Cars?
1 Answers
Vehicle insurance can be divided into compulsory traffic insurance and commercial insurance. The premium for compulsory traffic insurance is not related to the vehicle's price, while commercial insurance is based on the vehicle's price, meaning more expensive cars will have higher commercial insurance premiums. Commercial auto insurance is further divided into basic insurance and additional insurance. Basic insurance includes vehicle damage insurance, third-party liability insurance, comprehensive theft insurance, and passenger liability insurance. Additional insurance includes standalone glass breakage insurance and spontaneous combustion loss insurance, among others. The higher the vehicle's price, the higher the premiums for commercial insurance such as comprehensive theft insurance and vehicle damage insurance. Comprehensive theft insurance, according to the terms of various insurance companies, refers to compensation by the insurer within the insured amount if the insured vehicle is stolen, robbed, or seized and remains missing for a certain period (usually three months, or 60 days under PICC's terms) after being filed and verified by county-level or higher public security criminal investigation departments. The premium is affected by the vehicle's price. Vehicle damage insurance: The premium is influenced by the vehicle's price because the insured amount for vehicle damage insurance can be determined in three ways: based on the new car purchase price, the actual value at the time of insurance purchase, or through negotiation between the policyholder and the insurance company. Therefore, the more expensive the vehicle, the higher the insured amount and, consequently, the premium. However, another factor affecting the premium is the vehicle's age. The older the vehicle, the lower the insured amount for vehicle damage insurance, leading to a lower premium. Additionally, once a vehicle exceeds a certain age, vehicle damage insurance can no longer be purchased.
