Auto insurance collision and comprehensive coverage rates are based on several factors, some of which are: the original cost new of the vehicle, the year of the vehicle, the damageability of the vehicle, and the sportiness of the vehicle. Each vehicle identification number is converted into a number between one and twenty-six. At this point, the number is called a "symbol." The higher symbols are assigned to the higher end cars such as Mercedes, Ferrari, etc. Logically, the lower symbols are assigned to the modest cars; but even the little Yugo has a symbol higher than one!

Insurance companies look at vehicle safety features, weight to horsepower, body styling, utility of the vehicle and many other factors beyond the price of the vehicle. Generally, vehicles that are renowned for their safety features (Volvo's, Saab's, etc.) will actually have a lower symbol than comparably priced sedans and thus cost less to insure. Two door, two seater, high horsepower vehicles will generally receive a symbol much higher than their actual value because of their sport or high performance nature. The insurance company may actually increase or decrease the symbol based upon the actual claims history and damage repair cost history of the vehicle. This can happen a few months after a new model is introduced or after a few years! If you own a celebrated rollover, vehicle gas tank explosion vehicle, you may have already seen an increase in insurance cost.

Why is this symbol stuff important?

First, if you're out looking for a car, check with your agent before you buy. A simple decision such as ordering a 4 door vs. a 2 door could make the difference in hundreds of dollars in additional insurance cost over the years.

Second, insurance companies calculate their premiums based only on factory built cars containing factory installed options. Other dealer installed or aftermarket options may not be covered unless you inform your agent and pay additional premiums. Sometimes, it's hard to tell on a new or used car who installed the options. Read on.

Factory options…

Car options actually installed at the car manufacturer's factory are included in the vehicle identification and symbol numbering scheme used by most insurance companies. Factory installed does not mean when it leaves the automobile manufacturer it also goes to the van conversion place or the auto dealer for additional items.

Unfortunately, the manufacturers sometimes jump ahead of insurance policy designers. In the past, theft deterrent car radios installed by the factory that when removed from the dash won't work, were not covered by the auto insurance policy. The 1994 version of the personal auto policy corrected this, but check with your agent if you have one of these factory installed radios and are not sure if you have the 1994 version of the Personal Automobile Policy or its equivalent.

Dealer options…

Car dealers are adept at adding options to vehicles to boost styling, salability, and of course, profits. Spoilers, body side moldings, special wheels and hub caps, body paint, car phones, speakers and stereos, pin stripes and the whole van conversion thing can be added right onto the dealer invoice and you may never know which parts are original and which parts are Fred's Conversion.

The insurance company cannot price for these additional options unless you tell your agent what the options are and how much they cost. Sure, you can avoid telling the company; but, if you get into an accident, you may not be covered for the unknown options.

How do I know if the dealer buried the options in the price? Simply ask the dealer. If the dealer will not tell you, go to another dealer. Only you will lose in the end if you do not know.

Your options…

You don't like the stereo - won't pay $1,000 for a dealer installed CD player that you can install for $400? You want a car phone; you want special paint? Let your agent know as soon as you purchase the vehicle. Your agent can add coverage onto your policy.

The Nitty Gritty

The following comes from both the Homeowners '91 policy and the 1994 version of the Personal Automobile Policy. Your agent or company may have sold you a different policy or version, so ask your agent about whether you are covered for any of the situations described below.

1991 Homeowners form 2, 3 or 6:

• Mobile electronic equipment:
  • You have up to $1,000 coverage for mobile electronic equipment that can be operated both by the car's electrical system and normal house current or internal batteries. This $1,000 applies when the equipment is in the car or is anywhere else. You can pay additional premium to increase the coverage.
  • If the electrical equipment (car phones etc.) can only be operated by the vehicle and does not have any other source of power (electrical outlet, battery etc.) then the equipment is not covered by the homeowners policy.
  • If the equipment cannot be operated by the vehicle (you haul your computer from one home to another) then the $1,000 limit does not apply and your normal contents limits under your homeowners will apply.

1994 Personal Automobile Policy

• Electronic equipment designed for the reproduction of sound must be permanently installed or removable from a housing unit which is permanently installed, and is designed solely to be operated by the auto's electrical system. Equipment of this type includes:
  • Radios, stereos, tape decks, CD players.
• The following types of electronic equipment are not covered unless they are permanently installed as an integral part of the same unit housing sound reproductive equipment in the opening of the dash or console normally used by the manufacturer for installation of the radio.
  • CB radios, telephones, two-way mobile radios, scanning monitor receivers, television monitor receivers, video cassette recorders, audio cassette recorders, personal computers.
• Tapes, records, or disks used with any electronic equipment. (Not covered because they cannot be permanently installed. You must purchase additional coverage).
• Any accessories for any electronic equipment must be covered separately if not permanently attached to the actual piece of equipment (Attached does not mean attached to another part of the car by electrical connection, or by microwave as in the case of the car phone antenna.)
• Custom furnishings and equipment on any pickup or van are not covered. Examples:
  • Awnings, cabanas.
  • Special carpeting, insulation, furniture, bars.
  • Cooking and sleeping facilities.
  • Height extending roofs.
  • Murals, paintings, decals, graphics.

NOTE: You can purchase coverage for electronics and van and truck conversion items. Check with your professional insurance agent for details.

© Insurance Publishing Plus, Inc. 1996, 2002. All rights reserved.
Production or distribution, whether in whole or in part, in any form of media or language; and no matter what country, state or territory, is expressly forbidden without written consent of Insurance Publishing Plus, Inc.