Why Have Car Insurance Premiums Gone Up?

Comparing the cell phone to the car to better understand.

Your cell phone has come a long way in recent years — and so has your car. Not only does it allow you to get around, but it now comes with an impressive array of technology: telephone, Bluetooth, cameras, safety alarms and more. Not surprisingly, all these gadgets are reflected in the price of your vehicle, and in your insurance premium.

Let’s compare some cell phones and popular vehicles over the years to better illustrate why car insurance premiums have gone up.

1999: Nokia 5110 vs. Toyota Tercel

It is often said that everything was sturdier in the past. Not so long ago, two tanks were on the market at the same time:

  • The famous Nokia 5110. This cell phone manufacturer sold a small device that was accessible to everyone and available for $0 from Fido. It was virtually indestructible, particularly when paired with its trendy and protective accessory: a leather case with a belt clip. It had no special features other than the “snake” game that could be played between calls.
  • The Toyota Tercel was also built for durability. A model of simplicity, it was just about indestructible, and an impressive number can still be seen on our roads today. That says a lot! The base model came equipped with sturdy black plastic bumpers. Minor collision damage could be fixed with a hammer at your local body shop. With no added technology, it carried its owner from point A to point B. Its one special feature? An optional radio and cassette player to entertain passengers.

Why Have Car Insurance Premiums Gone Up?Sources: Wikipedia & Auto123

2005: Motorola Razr V3 vs. Honda Civic

If you had a Razr in 2005, you were the definition of cool. It was not only a trendy accessory, but a reliable and sturdy phone. It was not designed to have a case — if you dropped it, you were more likely to scratch it than break it. The Razr corresponded with the rise of text messaging. Back then, you could use the keyboard to select the letter you wanted by pressing the same key once, twice or even three times.

The 2005 Honda Civic was a top-seller and one of the most accessible and reliable vehicles. Though not the trendiest of cars, its streamlined shape was visually appealing. In the event of a collision, its moulded bumpers, which were painted the same colour as the vehicle body, cost about $500 to replace. Scratches could quickly be fixed thanks to the small can of touch-up paint included with the vehicle.

Why Have Car Insurance Premiums Gone Up? 1Sources: Wikipedia & Auto123

2011: BlackBerry Bold Touch vs. Mazda3

Do you remember when the iPhone was considered a toy, while the BlackBerry was seen as a mark of professionalism? This way of thinking soon changed in 2011, when BlackBerry adopted a touchscreen with its Bold Touch model — an unsurprising change, given the increasing number of people migrating from the BlackBerry to the iPhone.

As screens became more sophisticated, a new kind of trade emerged: screen and phone repair services. While the first generations of cell phones were virtually indestructible, there was now an occasional expense involved for anyone with the misfortune to drop their phone. The price was not too exorbitant — $100 for a new screen from a repair person on LesPAC (this was back in 2011, remember!).

The Mazda3 was a highly popular low-end vehicle. It now came equipped with even more technology, including a rain sensor that activated the windshield wipers. The large “smiley face” on its front bumper provided less protection from accidents, despite its enormous size.

Why Have Car Insurance Premiums Gone Up? 2Sources: Wikipedia & Auto123

2021: iPhone 12 vs. Hyundai Elantra

The iPhone needs no introduction. Truly revolutionary, its main weaknesses have remained virtually unchanged throughout the years: a single moment of clumsiness is enough to smash it to pieces. Screen repair providers can make a fortune off it!

Although the Hyundai Elantra may not be revolutionary, it is still loaded with technology for a $20,000 vehicle. It has:

  • Cameras
  • High beam assist
  • Parking/forward collision-avoidance assist
  • An auto curve slowdown system
  • Blind spot sensors
  • Driver attention warning sensors
  • Lane departure warnings, two large screens, six airbags, and more

Now, imagine the same moment of clumsiness with your iPhone… but this time with your Hyundai Elantra. Think of the damage!

Why Have Car Insurance Premiums Gone Up? 4Sources: Wikipedia & Auto123

Barely 20 years ago, phones were for making calls and cars were for getting around. However, things have changed significantly since then. Both products have become much more complex. Today’s cars are much safer and more entertaining, but also infinitely more fragile. Body shops and mechanics constantly need to upgrade their equipment and skills. Inevitably, this has led to higher repair bills. And that’s assuming that the vehicle can be repaired: a growing number of today’s well-equipped vehicles are declared total losses after increasingly minor accidents.

When we compare cell phones to cars (as too many people still do), you now have one of the main reasons why insurance premiums are increasing…

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