RITES OF WAY

By Bernard Baumohl

Ever wonder what happens when a brawny 6,000-lb. sport-utility vehicle collides with a typical 3,000-lb. sedan? Apparently, an insurance-company actuary hears it. Some big insurers are about to make it more costly to cover big vehicles than small ones. That's a break with the past. The reason? With record numbers of large vehicles like the Ford Expedition and the Chevy Suburban on the road, insurance companies are finding that drivers of the behemoths cause a disproportionate amount of harm to other cars and drivers, resulting in bigger liability payouts.

To offset the higher expenditures, insurers are boosting the premiums for liability coverage on sport-utility vehicles and pickup trucks, the New York Times reported last week. Previously, policyholders would pay roughly the same premium for liability protection whether they owned an ordinary sedan or a two-ton pickup. Car owners buy liability coverage as protection against loss claims from someone else as a result of an accident. Farmers Insurance Group, the nation's third largest insurer, has already lifted premiums as much as 10% in Pennsylvania, and it may eventually seek hikes in all of the 30 states it covers. A similar plan is under way at Progressive Corp., which said in a statement, "Our claims experience for sport-utility vehicles dictates that we charge a higher liability premium." Other companies such as Allstate and Nationwide are also analyzing their pricing.

Owners of big wheels could see their insurance bills jump 20%, or about $50 to $700 a year, for liability coverage. Any increase in such premiums would have to be approved by state insurance regulators. The only "light truck" vehicle whose owners are likely to escape paying higher liability premiums is the minivan. Accident statistics show the vehicles are just not macho enough to cause great damage.

--By Bernard Baumohl