Published Report Says Insurance Companies Plan To Raise Rates for Sport Utility Vehicles As
Published Report Says Insurance Companies Plan To Raise Rates for Sport Utility Vehicles As Much As 20 Percent Because of Costly Damage They Can Inflict on Cars
Farmers Insurance Group, a unit of B.A.T. Industries and the nation’s third largest insurer, and Progressive Corp. already have begun changing the way they calculate their rates, the newspaper said.
Executives at Allstate, Nationwide, Geico and USAA said they were reviewing the issue, the newspaper said. And it said industry leader State Farm was ``actively hostile″ to adjusting liability rates by model.
Nonetheless, the newspaper said the anticipated changes could mean a liability rate increase of up to 20 percent for drivers of sport utility vehicles and pickups over the next several years and a cut of up to 10 percent for car owners.
That likely could mean an extra $50 to $700 a year in liability insurance payments for the first group, depending on current rates, and a saving of $25 to $350 for car owners, the newspaper said.
``It’s pretty obvious the size and weight of these vehicles and the way they’re built is contributing to the loss experience,″ said Jonathan Adkisson, an actuary at Farmers Insurance Group, which trails only State Farm and Allstate in the insurance industry rankings.
``When an accident occurs, the heavier vehicles are more likely to inflict damage and injuries, and these result in larger claims, so it seems appropriate to charge the drivers of those vehicles higher premiums,″ he told the newspaper.
Actuaries for Farmers and Progressive said their customers who drive sport utility vehicles and pickups have been incurring unusually expensive claims to cover the damage and injuries they inflict during accidents.