Driving tests

Why is the cost of car insurance so expensive?

There are no reliable figures for the overall number of non-injury accidents, but they are factored into our insurance costsInsurance is expensive for these reasons:

  1. Newer vehicles tend to have more complex parts
  2. Some parts can’t be repaired or reused and therefore need to be completely replaced
  3. The technology required for fixing cars is ever more expensive
  4. We have a lot of accidents which also damage people’s property (walls, fences, traffic infrastructure, etc).

New vehicle part costs

Smash the windscreen on an old Commodore and it’s a fairly straightforward fix, but do the same on a new Lexus and there are sensors for rain and light moulded into the glass and what would be a few hundred dollars on an older vehicle is now five grand! The same applies with the front grille which can now be home to forward-facing cameras and radar cruise control as opposed to simply gaps for air to get to the radiator.

In fact, technology has now invaded almost all of the car with many vehicles having more than 30 individual computers, complex electronics in the wing mirrors, reversing cameras and sensors at the back and a multitude of plastic parts that must be discarded if broken.

Older cars don’t have airbags. When a steering wheel airbag is deployed, the whole steering wheel must be replaced; if all the airbags go off in the car, it’s often too expensive to replace all of them (along with any other damage sustained) and the vehicle is written off.

Skills cost money

Mechanics are becoming more specialised and the equipment they use is becoming more expensive. Computers are required to diagnose problems. One trend making it slightly easier for mechanics is that many cars are now based on the same platforms, just with different interiors and body shells. But another trend – electric and hybrid vehicles – means that mechanics are required to know even more. Cars sometimes take much longer to repair and mechanics find it harder to keep a stock of spare parts because there are just so many different parts.

Theft risk

Older cars are easier to steal, meaning that there’s more risk of total loss, but new cars with transponders that unlock and start the engine are not immune due to relay theft.

Number of crashes

Despite technology to reduce crashes such as automatic emergency braking and electronic stability control, the number of vehicles on the road continues to climb and that means an increased risk of having a crash. More cyclists and distracted pedestrians increase the probability of an incident.

What car parts have changed radically in the last 40 years?

  • Steering wheels now have airbags and a multitude of electronic buttons that make them costly to replace and install
  • Front grilles and bumpers now have sensors, cameras and radar cruise control
  • Wing mirrors are now heated with electric motors and sometimes cameras or blind-spot warning mechanisms
  • Many parts that were previously metal and repairable are now plastic and disposable
  • Seats have a multitude of motors and heating elements
  • Windscreens have built-in rain sensors, light sensors and other technology
  • Electric vehicles have specific requirements that mechanics are required to learn about
  • Door locks and handles sometimes now have sensors to detect key proximity and a person about to open it, or a button to lock/unlock the door
  • Some vehicles have automated boot lids which require motors.

Reducing your risk of an insurance claim

All of these techniques will cut the risk you’ll have some kind of incident:

  1. Increase your following distance to at least two seconds in dry weather and four seconds in wet or frosty conditions or when you are towing a trailer
  2. Look further ahead – at least 12 seconds where possible
  3. Watch where you park – choose low-risk areas (well-lit, away from items that could bump into it like supermarket trolleys)
  4. Don’t leave items in your car that are visible to thieves – they don’t need any encouragement. Check out how to stop your car being broken into.
  5. Keep your tyres at the correct inflation
  6. If the weather conditions are bad, don’t drive unless it’s necessary
  7. Don’t drive fatigued – share the driving or pull over and have a rest
  8. Don’t let inexperienced drivers drive your vehicle
  9. Manage your distractions – don’t use your mobile phone, make sure any children you are carrying have plenty to keep them occupied, set the radio and air conditioning before you set off, etc.
  10. Make sure your brakes and suspension are well looked after as they’ll help your vehicle’s handling
  11. Don’t drive after drinking – any level of alcohol affects your driving
  12. Obey the signs and lights – don’t run red lights
  13. Keep your speed down – use appropriate speed for the conditions.
driver training courses

Darren is a member of the Institute of Advanced Motorists and the NZ Motoring Writers' Guild

Tagged with: | Posted in Advice
When was the last time you checked your Road Code knowledge?

Try some tests for free!

Road Code car quiz

Road Code motorbike quiz

Road Code heavy vehicle quiz