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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.

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Session PL-30

Sport Utility Vehicles And Auto Insurance Costs

2001 Lincoln Navigator


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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


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Sport Utes Of The Future

  • Sport Utility Trucks -Intersection of a Pickup Truck and SUV

2002 Lincoln Blackwood SUT


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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


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What’s The ProblemWith SUVs?

  • Too big - take too much space

  • Hard to see around

  • High fuel consumption

  • Pollute more


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What’s The ProblemWith SUVs?

  • Exempt from gas guzzler tax

  • Bumper mismatch with cars

  • Pose greater risk of loss to cars

  • Higher rollover potential


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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


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New NHTSA RolloverRisk Ratings

5 Stars < 10%

4 Stars10% - 20%

3 Stars 20% - 30%

2 Stars 30% - 40%

1 Stars > 40%


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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


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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


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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



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Factors Affecting SUV Insurance Costs hit Pontiac Grand Prix with unibody

  • More horsepower

  • Higher theft potential

  • Use of vehicle

  • Higher rollover potential

  • Driver demographics

  • Mix of coverages


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Current SUV Rating Practices hit Pontiac Grand Prix with unibody

  • 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


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Light Truck Growth hit Pontiac Grand Prix with unibody

Percent Of All New U.S. Auto Sales

Light trucks include full-size vans, minivans,

pickups and sport utility vehicles


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Change in U.S Auto Sales hit Pontiac Grand Prix with unibody2000 vs. 1999

Light Trucks

Cars

SUVs

Total


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2000 Light Truck Sales hit Pontiac Grand Prix with unibody

2000 US New Light Truck Sales - 8.5 Million


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Growth of SUVs hit Pontiac Grand Prix with unibody

Sport Utility Vehicle Sales

U.S. Market


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2000 US New Auto Sales hit Pontiac Grand Prix with unibody

2000 US New Auto Sales - 17.3 Million


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Top 10 Selling Vehicles hit Pontiac Grand Prix with unibody

 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


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Who Needs SUV? hit Pontiac Grand Prix with unibody

  • 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


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Who Needs SUV? hit Pontiac Grand Prix with unibody

  • 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


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Who Needs SUV? hit Pontiac Grand Prix with unibody

  • 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


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Who Buys SUVs? hit Pontiac Grand Prix with unibody

  • 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


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Who Buys SUVs? hit Pontiac Grand Prix with unibody

  • 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


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Who Buys SUVs? hit Pontiac Grand Prix with unibody

  • 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


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Who Buys SUVs? hit Pontiac Grand Prix with unibody

  • 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


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Who Buys SUVs? hit Pontiac Grand Prix with unibody


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What’s The Problem With SUVs? hit Pontiac Grand Prix with unibody

  • 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


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What’s The Problem With SUVs? hit Pontiac Grand Prix with unibody

  • Safety issues

    • Are smaller cars safe enough?

    • Does Detroit need to change?


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The Most Capable SUV Ever? hit Pontiac Grand Prix with unibody

This is what really happened in the Winter of 2000 to one of those go anywhere SUVs.


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What’s The Problem With SUVs? hit Pontiac Grand Prix with unibody

  • 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.


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What’s The Problem With SUVs? hit Pontiac Grand Prix with unibody

  • 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


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What’s The Problem With SUVs? hit Pontiac Grand Prix with unibody

  • 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?


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What’s The Problem With SUVs? hit Pontiac Grand Prix with unibody

  • 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


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Panelist: hit Pontiac Grand Prix with unibody

  • 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


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Session PL-30 hit Pontiac Grand Prix with unibody

Sport Utility Vehicles And Auto Insurance Costs

2002 Chevy Trailblazer