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SUVs Blamed for Higher Insurance Premiums

By Mac Gordon

Auto insurance rates are higher because of SUV growth - that's the conclusion of a study by Conning Research & Consulting of New York, which traced a prime reason for increased vehicle insurance rates in general to the higher damage risks when SUVs, pickups, and minivans strike smaller vehicles. The findings, published this week in the Wall Street Journal's Dow Jones newswire, gave drivers of any size of cars another reason to play "pin the donkey" on a Ford Expedition or Nissan Pathfinder Armada.

Two insurers, Allstate and Progressive, set premiums on the basis of types of vehicles driven, which could bring SUV owners a slight rate saving. But two others in the study, giant State Farm and Zurich, take a broader approach to rating liability, which tends to boost rates. Auto industry representatives defend the safety record of SUVs against the latest assault. Jason Vines, president of SUV Owners of America, insisted that, "if nothing else, SUVs are subsidizing cars because they have lower collision and injury rates." This view is shared by Gloria Bergquist, spokeswoman for the Alliance of Auto Manufacturers, who says the safety record of SUVs "surpasses that of cars."

Conning, a unit of Swiss Reinsurance, estimates that 80-85 million drivers are being charged higher one-size-fits-all liability rates. It adds that only about 30 percent of the personal-insurance market has liability pricing that takes into account vehicle type. However, State Farm is thinking of switching its rate determination system to a vehicle-based type, say spokesman Richard Luedke, because "frequency of accidents involving SUVs is lower than that for cars even though damage might be greater."

Of course, the type of car driven is only one determinant of premiums. Accident records, age, mileage driven, and even credit scores are also taken into account, says Conning. -

ruski_RENAMED

why don't they just raise the SUV insurance rates and leave car drivers alone?

fahoumh

because they won't make as much money that way

danny25

charliemike

The correlation is that rates are going up because they are being raised ... it has nothing to do with SUVs having an impact on the road.

Insurance is the greatest scam ever ...