SYMBOL are the age groups that Insurance agencies use to assess the premium they will be charging from their consumers. This is mainly done for comprehensive insurance policies where the insurance company typically pays for the cost of repairing or replacing a vehicle if anything happens (stolen or damaged or any natural force ending up damaging the vehicle). However, we should note here that insurance companies suggest that typically comprehensive insurance is required in addition to the Collision Insurance when financing a vehicle. Because Collision insurance covers the damage in the incident of colliding with any other vehicle. So, comprehensive insurance comes on top of the collision one and complements it.
How do the rating symbols work?
The car insurance industry uses the symbols to rate vehicles according to some set standards. For instance, ISO has curated a SYMBOL ranging from 1 – 75 for the vehicle built before 2011. However, they have given the number between 1 – 27 for a vehicle built after 2011.
The SYMBOL number corresponds to an assigned value of the cars between $1 – $80,000 for cars built before 2011. In the same way, cars built after 2011 cover the cost between anywhere $1 – $ 150,000.
What does the cost of replacement mean?
The replacement cost is the highest possible value that an insurance company will have to pay in case of any damage, so it has its association with the SYMBOL number. The biggest determinant of determining what type of SYMBOL is assigned to the vehicle is actually the cost associated to replace the vehicle. The higher the replacement cost, the higher would be the SYMBOL number and as a result, the higher would be the premium. Conversely, this also means that the vehicle with lower SYMBOL numbers will also get the insurance policy at a much lower premium.
Factoring cost of repair
Insurance companies understand the fact that repairing a vehicle can be a costly affair. Hence, it can affect the SYMBOL ratings. High-performance vehicles can cost more than the ones who don’t have expensive spare parts or computerized equipment. So, its really a common sense that high-end luxury cars will have a higher SYMBOL number and pay more premium. The average insurance cost of a luxury vehicle was anywhere between $1000 – $3000 in 2012. As a result, the costly the car, the higher will be the SYMBOL number and the higher will be its premium for comprehensive coverage.
Do the SYMBOLs change?
We all know that the insurance premium for any vehicle is not the same for its lifetime. The vehicle is depreciated as time passes and its value drops in the market. So, the premium of an insurance policy decreases as the value of the vehicle decreases. Considering that both the factors change, there is no point in thinking that SYMBOL assigned a vehicle will not change. Moreover, in the life of a vehicle, the SYMBOL can change many a time. The average depreciation is considered 15% of the total cost per year until it turns 5 years old and each year after that would mean more depreciation. In this way, the depreciation affects the SYMBOL to go lower, resulting in the cost of the premium to be lower.