Progressive Not Raising Rates on SUVs, Vans, Large Trucks
5 December 2000
Progressive Not Raising Rates on SUVs, Vans, Large TrucksMAYFIELD 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.