Session PL-30. Sport Utility Vehicles And Auto Insurance Costs. 2001 Lincoln Navigator. Sport Utility Vehicles. Chevy Suburban Jeep Grand Cherokee Ford Explorer Lincoln Navigator Ford Expedition Toyota Land Cruiser Mercedes-Benz ML320 Dodge Durango Ford Excursion.
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Session PL-30 Sport Utility Vehicles And Auto Insurance Costs 2001 Lincoln Navigator
Sport Utility Vehicles • Chevy Suburban • Jeep Grand Cherokee • Ford Explorer • Lincoln Navigator • Ford Expedition • Toyota Land Cruiser • Mercedes-Benz ML320 • Dodge Durango • Ford Excursion 1935 Chevy Suburban 2001 Ford Excursion
Sport Utes Of The Future • Sport Utility Trucks -Intersection of a Pickup Truck and SUV 2002 Lincoln Blackwood SUT
What’s The ProblemWith SUVs? • Some groups critical of SUVs • SUV Anti-Fan Club • Sierra Club • Friends of the Earth • Road Hog Info Trough • Consumers Union • Concerns with rollovers
What’s The ProblemWith SUVs? • Too big - take too much space • Hard to see around • High fuel consumption • Pollute more
What’s The ProblemWith SUVs? • Exempt from gas guzzler tax • Bumper mismatch with cars • Pose greater risk of loss to cars • Higher rollover potential
NHTSA Rollover Info • More than 10,000 people die every year in rollovers • Over 60% of SUV occupant deaths in 1999 were rollovers, cars only 23% • 80% killed in single-vehicle rollovers were unbelted • Belted occupants have 75% less chance of being killed in rollover
New NHTSA RolloverRisk Ratings 5 Stars < 10% 4 Stars10% - 20% 3 Stars 20% - 30% 2 Stars 30% - 40% 1 Stars > 40%
New NHTSA RolloverRisk Ratings • Best rating: Honda Accord • Worst rating: Chevy Blazer and GMC Jimmy/Envoy • SUVs had lowest rankings1 - 3 stars • Most cars had highest rankings4 stars
Factors Affecting Auto Insurance Costs Size, weight, and bumper mismatch with cars Height: 73” Weight: 5,293 Pounds Height: 54.7” Weight: 2,676 Pounds Chevy Suburban Chevy Cavalier
Factors Affecting SUV Insurance Costs • Rising popularity- Changing mix • Many are 4 wheel drive • Longer stopping distances • Stiffer ladder frames vs unibody • don’t collapse, more force into vehicle it hits
This is what happened when Chevy S10 with full ladder frame hit Pontiac Grand Prix with unibody.
Factors Affecting SUV Insurance Costs • More horsepower • Higher theft potential • Use of vehicle • Higher rollover potential • Driver demographics • Mix of coverages
Current SUV Rating Practices • Insurers commonly vary physical damage rates for repairability and damageability, theft potential • Most do not vary liability rates • Some have started to vary liability • Others say data does not support
Light Truck Growth Percent Of All New U.S. Auto Sales Light trucks include full-size vans, minivans, pickups and sport utility vehicles
Change in U.S Auto Sales2000 vs. 1999 Light Trucks Cars SUVs Total
2000 Light Truck Sales 2000 US New Light Truck Sales - 8.5 Million
Growth of SUVs Sport Utility Vehicle Sales U.S. Market
2000 US New Auto Sales 2000 US New Auto Sales - 17.3 Million
Top 10 Selling Vehicles 1 . Ford F-Series PK 2. Chevrolet C/K PK P 3. Ford Explorer 4. Toyota Camry 5. Honda Accord 6. Ford Taurus P 7. Dodge Ram PK P 8. Ford Ranger PK 9. Honda Civic 10. Ford Focus 12 Months 2000 US Auto Sales
Who Needs SUV? • Three major segments of SUVs • Heavy-duty • GMC and Chevy Suburban • New Ford Excursion • Compact sport utilities • Explorer and Jeep Grand Cherokee • Full size utilities • Chevy Tahoe, Ford Bronco and Ford Expedition
Who Needs SUV? • Those requiring • Heavy-duty wagons for • 9 passenger seating • Larger cargo capacity • Towing • Compact sport utilities for • More room, greater towing and cargo space due to larger family
Who Needs SUV? • Minivan owners who need nine-passenger seating and who find the styling and image of SUV appealing • Crossovers from luxury cars, station wagons and even pickups • Those who currently are
Who Buys SUVs? • For Ford Expedition • (Considered Full Size) • Median age is 40 to 50 years • Median annual income is $85,000+ • 60% are college graduates • 40% are women • 85% are married
Who Buys SUVs? • Three major groups of buyers • Suburban families with teenage children who reject minivans and shun station wagons • Rural families who need vehicle to go to town as well as travel off-road • Empty-Nesters who lead active lives and need towing or just to visit grandchildren
Who Buys SUVs? • Expedition vs Explorer • Full size vs compact • Families with 5+ members twice as likely to buy full size • 53% of full size buyers use vehicle frequently for hunting, fishing or camping, 24% for compact
Who Buys SUVs? • Expedition vs Explorer • Full size vs compact • 48% of full size for towing, 16% for compact • 33% of full size for off-road, 14% for compact
What’s The Problem With SUVs? • Safety issues • Large vehicle striking small vehicles • Greater risk to occupants of smaller vehicles • Risk of death in car vs. pickup/SUV crash is 4 times greater for those in car
What’s The Problem With SUVs? • Safety issues • Are smaller cars safe enough? • Does Detroit need to change?
The Most Capable SUV Ever? This is what really happened in the Winter of 2000 to one of those go anywhere SUVs.
What’s The Problem With SUVs? • Does data support different rating? • Changing mix of cars vs. light trucks • Of vehicles on the road, 65% are cars, 35% are pickups, SUVs, and vans. • New vehicle sales split about 50/50. • 8% of vehicles on the road are SUVs. • 20% of new vehicle sales are SUVs.
What’s The Problem With SUVs? • Does data support different rating? • Need to consider factors affecting both frequency and severity • Physical Damage (Comp vs. Coll) • Expect higher Theft Losses • Lower Coll Losses
What’s The Problem With SUVs? • Does data support different rating? • Liability (BI/PD vs. Med Pay, PIP) • Expect higher BI/PD losses • Expect lower Med Pay/PIP losses • What is the net result? • How does it vary by SUV model? • By 2wd vs. 4wd? • What about cars, pickups and vans?
What’s The Problem With SUVs? • Does data support different rating? • Mix of coverages, limits, deductibles affects overall rate adjustments. • These can vary depending upon the type of business written. • Preferred, Standard, Non-Standard • Rural vs. Suburban vs. Urban • Youthful vs. Adult vs. Senior Adult • By Region, By State
Panelist: • Kim Hazelbaker • Senior Vice President with Highway Loss Data Institute (HLDI) • HLDI publishes motor vehicle insurance loss data, performs crash tests • Holds a masters degree in economics and statistics and a bachelors in business from the University of Missouri
Session PL-30 Sport Utility Vehicles And Auto Insurance Costs 2002 Chevy Trailblazer