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Big-Vehicle Owners May See Big Premiums

Owners of sport utility vehicles, pickup trucks and vans may get hit with higher insurance rates because of the damage they cause in crashes with smaller vehicles.

At the same time, people who own smaller cars may get a break on their insurance. Some studies show they cause less damage to other vehicles and therefore are less costly to insurance companies.

Farmers Insurance Group and Progressive Corp. are adjusting some of their rates to take the different sizes of vehicles into account, The New York Times reported Friday. But those changes are limited, and most other companies are taking a wait-and-see attitude. The companies also are restricted by state boards, which must approve all rate changes.

Vehicle insurance is made up of two parts. Liability covers damage the vehicle causes to others involved in an accident, while collision insurance covers damage to the policy holder’s vehicle. Although collision insurance is generally higher for smaller vehicles, liability accounts for more of the total cost.

An April 1994 study from the Virginia-based Highway Loss Data Institute comparing 1991-93 model year vehicles, large sport-utility vehicles caused 72 percent more in average costs for liability damage. That same vehicle, however, cost 31 percent less than the average vehicle for collision repairs.

The larger vehicles account for more than 40 percent of new vehicle sales in the United States, and their popularity is continuing to rise.

The nation’s top two auto insurance companies - State Farm and Allstate, which together insure about one-third of the nation’s cars - said they had no immediate plans to change their liability insurance rates to distinguish between large and small vehicles.