State Farm to Favor Drivers of Large Vehicles

State Farm, the largest auto insurer in the United States, is expected to announce that it will reduce premiums for drivers of the biggest cars, trucks and sport utility vehicles, according to the New York Times. The Times says the decision is based on claims data showing big vehicles as the safest for passengers. According to an article in the Times, the reductions will take the form of discounts on the medical portion of coverage and may make a difference in annual premiums of no more than a $50 per year. Overall insurance costs will remain more expensive for drivers of big rather than small vehicles, according to the Times. More than 300 vehicles are not among the 36 deemed safe enough to qualify for State Farm's highest vehicle safety discount, which the company announced Nov. 28. State Farm has drawn criticism from consumer advocates who called the new policy unfair to a majority of drivers, the Times says. The Times says that the biggest discount of 40% will go to drivers of big, expensive cars, vans, pickups and sport utilities like the Chevrolet Suburban, a number of Ford and GMC vans, two Ford pickups and some Acuras, BMWs, Mercedes-Benzes and Jaguars. However, those driving smaller vehicles such as the Ford Contour, the Chevrolet Cavalier and many popular Japanese models will receive only 20 percent discounts on the portion of their premium covering personal injuries to occupants, the Times says, noting that State Farm has for years given a 30 percent discount to any dual airbag-equipped vehicle. Not all big vehicles will automatically get the biggest safety discount. While State Farm does not deal specifically with the issue of SUVs that tend to roll over, the Times says, it does give several SUVs, like the Mitsubishi Montero and the two-door Ford Explorer, its lowest safety rating. Initially, the discounts -- which the Times says are likely to be adopted by other insurers -- will be applied to about half the 37 million cars insured by State Farm. The effect, the newspaper calculates, is that the owners of about 6.2 million cars, or about a third of those to which the new price structure will apply immediately, will pay 10 percent more for medical coverage; another third will pay 10 percent less; and, for the final third, there will be no change.