Citing studies of vehicles over the past 30 years, the Insurance Institute for Highway Safety (IIHS) claims that for every one horsepower added per 100lb weight (0.75kW/45.5kg), the estimated loss per insured vehicle year increased by 5%, reports Canadian Underwriter. What that cryptic bit of information means is that adding 30hp to a 3,000lb car (22kW/1363kg) increases the amount of money the insurer will pay in claims by 5% for every year its insured. Obviously, the goal of the insurance industry is to collect premiums and minimize paying out - so cutting back horsepower by a similar amount ought to have the reverse effect, saving the industry billions annually.
The two cars given as examples are the Nissan Altima and Pontiac Grand Am. Both cars are similarly sized and priced, but the Altima is equipped with a 3.5L engine while the Grand Am gets by with 2.2L. The horsepower difference is a whopping 120hp (89kW), and that difference supposedly accounts for the 20% higher collision losses for drivers between the ages of 25 and 64. These figures boil down to your average middle-aged married man living in an urban area losing, on average, $339 to collision damages in a year's time while driving an Altima, while the Grand Am driver would lose only $283 over the same period.
Hardly the stuff that breaks banks - but every penny counts from the perspective of the insurance industry. But without explaining if the study accounted for other factors, like maintenance habits, safety equipment, or simply more expensive repair costs for the items attached to higher-horsepower cars, it's hard to know if the horsepower is the actual cause, or just an innocent bystander. While the study highlighted the similarly priced Altima and Grand Am, it's quite reasonable to think that a 420hp BMW M3 would be significantly more expensive to repair after a 5mph fender-bender than would a Nissan Versa. And huge disparities like that can throw such statistical studies off easily enough.