Insurance Services Office Inc., a risk-analysis firm, assigns each make and model of automobile an ISO "symbol," which takes into account the likelihood that such a car will be the subject of an insurance claim and the typical size of such claims. Insurers can use these symbols to set insurance rates.
Factors Involved in Coding
ISO says it assigns symbols based on its research into real-world claims made by owners of each specific make and model of car. Symbols, which are really numerical codes, are based on more than simply the value of the vehicle. Cars that would sell for the same price may have markedly different codes. As ISO explains it, some models are more likely to be stolen; some are involved in accidents at a greater rate than others (think about "muscle cars" vs. minivans, for example); some inflict more damage, or suffer more damage, in a crash; and some are more expensive to fix.
Property and Liability Codes
ISO assigns more than one symbol to each vehicle. "Personal Auto Physical Damage Rating Symbols" are used to calculate rates for collision and comprehensive coverage. "Liability and PIP/Medical Payments Symbols" are used to set rates for automobile liability insurance. In general, the larger the number used as a symbol, the greater the claims risk, so the higher the insurance premium is likely to be. For example, according to New York state insurance regulators, a 2013 Honda Odyssey minivan had a collision symbol of 10, while a Chevrolet Corvette had a symbol of 39 and a Mercedes-Benz S600 sedan had a symbol of 98.
Not the Same ISO
Insurance Services Office is not affiliated with the international standards-setting body that also goes by the abbreviation ISO.
Cam Merritt is a writer and editor specializing in business, personal finance and home design. He has contributed to USA Today, The Des Moines Register and Better Homes and Gardens"publications. Merritt has a journalism degree from Drake University and is pursuing an MBA from the University of Iowa.