Greater horsepower leads to higher claims costs

Even slight increases in horsepower by automakers results in increased insurance claims costs, according to a study by the Highway Loss Data Institute.
The addition of just one horsepower per 100 pounds of vehicle weight resulted in an estimated 5% increase in losses under collision coverage per insured vehicle year, the Insurance Institute for Highway Safety (IIHS) said in its Status Report. A vehicle year is one vehicle insured for one year, two insured for six months, etc.
Performance capabilities of new cars have been increasing for 30 years, the Institute reported. Between 1985 and 2005, average horsepower climbed 64%, from 111 to 183.
The IIHS compared the Nissan Altima to the Pontiac Grand Am. Both are mid-sized and similarly priced, but the Altima’s engine, at 3.5 litres, is bigger than the Grand Am’s 2.2-litre engine.
The Altima produces 260 horsepower to the Grand Am’s 140; factoring in weight, there is a difference of 3.5 units of vehicle power between the two cars, the IIHS said.
“Collision losses for the more powerful Altima are an estimated 20% higher than for the less powerful Grand Am for rated drivers ages 25-64,” the IIHS said.
“In dollar terms, this means a married man 25 to 64 years old living in a well-populated urban area would chalk up an estimated $339 in collision losses driving an Altima, compared with $283 for a Grand Am.”