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Progressive Not Raising Rates on SUVs, Vans, Large Trucks

5 December 2000

Progressive Not Raising Rates on SUVs, Vans, Large Trucks
    MAYFIELD VILLAGE, Ohio, Dec. 4 Contrary to what was
reported in news stories recently, Progressive , the nation's
fourth largest automobile insurance company, is not raising rates on SUVs,
vans and large trucks. The confusion came about last week when another large
auto insurer announced that it is starting to develop personal injury
protection rates based on vehicle characteristics as well as claims
experience, resulting in a rate hike for some of that company's customers.
    Progressive has been determining liability and personal injury rates using
vehicle characteristics as well as claims experience since 1983, making it the
first to do so in the industry. The company reviews its rating approach
continuously to ensure adequate rates.
    Using vehicle characteristics as well as claims experience results in more
accurate auto insurance rates for consumers.
    Some larger, heavier vehicles cause greater damage to vehicles they strike
and may also cause greater injury to the other vehicle's occupants. Therefore,
to ensure the rates charged are sufficient to cover losses, Progressive
charges higher liability rates for those vehicles.
    This does not mean that the company charges more premium for entire
classes of vehicles. Rather, Progressive looks at individual make and model
characteristics and makes a determination based on the specific vehicle.
    Progressive also uses vehicle characteristics and claims experience in
developing premium for personal injury coverage.
    Progressive takes into account the protection that each vehicle affords
its passengers. For those larger, heavier vehicles that provide greater
protection for their passengers, Progressive offers a lower rate on personal
injury coverages.
    So, what should consumers do? Consumers need to shop around for their auto
insurance to find the combination of price and service that is best for their
individual circumstances. Different auto insurance companies use different
methods of rating which result in wide variance of prices available to
consumers.
    Earlier this year, Progressive conducted a study of the differences in
premium available to more than 89,000 consumers. In the six-month study
(January 1 to June 30, 2000), the company reviewed the auto insurance premium
available for identical policies from different companies.  The average
difference between the highest and lowest auto insurance premium available
from different companies for the same consumer, same policy was $515 every six
months. This means a consumer could buy the same coverages for $500 every six
months from one company and get a quote of $1,015 every six months for the
identical policy from another company. It clearly pays to shop around.
    There are a lot of ways to shop around. Progressive offers consumers three
very effective methods.