Insurance shouldn't (but probably will anyway) go up when your brake pedal is discovered to be defective, because the insurance is there to pay for the financia

Insurance shouldn't (but probably will anyway) go up when your brake pedal is discovered to be defective, because the insurance is there to pay for the financial loss caused by the defective pedal. The loss in the resale value of your car and the increase in future premiums are losses caused by the defective pedal. Of course, the insurance company can simplify this by just not charging you more for future premiums, rather than paying you for future premiums and taking it back later. And by not charging other people more for future premiums, they preserve the resale value of the car. This is an automobile equivalent of "why health insurance should cover preexisting conditions"--any increase in future premiums caused by your condition is an expense caused by the condition, so your insurance should pay for it. If you switch companies, technically the first company should pay for the increased premiums from the second company, but averaged over the whole market this is still equivalent to just not increasing premiums.