Why do insurance companies hate performance/modified cars?

-It seems like the ideal insurance company wants you to drive a safe and slow bumper car and have absolutely no fun driving to and from wherever you are going.



They assume that any sports car or car with performance enhancements means you will crash. It means you are a reckless driver and no good to the general public. It means you will blatantly violate the rules of the road and have no remorse for doing it. All of that is a load of crap...



Most of the major car companies don't even offer, when getting a free quote, to see Ferrari's or Lamborghinis prices, they just won't insure them!



Your expected to report any and all modifications to the company so they can jack up the premium.



So why do they hate those types of cars so much?Insurance rates are set just like the odds in a casino game. The higher the chance of a claim or monetary loss to the insurer, the higher the premium has to be to maintain the same percentage of profit.

Exposure is the amount of time someone is in a situation that is more likely to involve him in an accident or claim. This could mean parking on the street in a high crime zip code, meaning there's a greater chance the vehicle is vandalized or stolen, resulting in a claim if the owner has comprehensive coverage. Someone who drives more also has a greater chance of being in an accident. If you're a full time student and only use your car less than 4000 miles per year, you usually get a discount. If you're a taxi driver, you have to pay more since you're always in the "danger zone".

Another statistical indicator used to set rates is the kind of vehicle. Yes, Corvettes are involved in more insurance claims than Malibus. It's not that the sportier car is more hazardous by itself, but just seems to attract the kind of driver who's more likely to generate a claim.

Age. This is THE big factor. I'm assuming you're still a teen. I had three accidents (insurance claims against me) by the time I reached 20. Fortunately no one was hurt, but my insurer had to pay those other guys, so I cost them. In the 27 years since then I've only had 1 accident that was my fault, and the claim was so small that it didn't do anything to my rates. We just get better at avoiding crashes as we gain experience, but that learning curve is way steep in our youth. Just wait 'til you turn 25 or 30 and see how much your premium shrinks! That's when you can start thinking about that 'Vette.

My advice is, if you even need your own vehicle, get something that you don't have to finance (so you don't need comprehensive coverage). The older the car, the less the insurance tends to cost. Also, you only have to tell them the mods on your car if you want the cost of those covered also. With liability only insurance the mods don't matter, so you don't need to be telling the insurance company about them.

There are some cars that are higher performance but are bigger, more "family" in appearance, so those are the ones you should look at.It is all about track record for the car based on past experience as well as where you live and many other facts that go into determining risk.

As for insurance for a Ferrari and other super cars, those who can afford such cars are often rich enough to be self insured. They don't need insurance because they own the insurance company and can pay for the any damage using money that us other folks paid them to cover our Camaro's.
I think its because there is more of a risk involved and depending on the vehicle worth more if theres an accident