Impact of High Premiums Can Be Cushioned By Safer Car--But What’s ‘Safer’?

Insurance experts say consumers can reduce their auto insurance bills by picking safer cars. The problem is that nobody seems to be able to agree about what exactly constitutes “safer.”

The issue was underscored this week when State Farm Insurance announced it was replacing its automatic discount for air bags with a new discount that would be based on a vehicle’s safety record. The price break applies only to the medical coverage portion of an automobile policy.

Consumer advocates immediately denounced the new pricing system because it gives a break to drivers of some of the biggest and most expensive cars, trucks and sport-utility vehicles on the market. These include behemoths that tend to do extensive damage to other cars in crashes.

State Farm’s system also downgrades some vehicles that have received good to excellent marks in crash tests conducted by safety experts, which raises questions about how consumers are supposed to know which vehicles are truly safe.

For example, in an A-B-C safety rating system, with “A” being the best, State Farm rates both the Toyota Camry and the Chevy Blazer as a “C.”. But other evaluators have given these two vehicles dramatically different ratings.

The industry’s Insurance Institute for Highway Safety, for instance, ranks the Camry as one of the safest vehicles in its class and even gives the car its “Best Pick” endorsement. The Blazer ranks at the bottom of its class. Anyone considering this SUV should look at the chilling post-crash pictures on the institute’s Web site.

The Blazer suffered in government crash tests as well. Although National Highway Traffic Safety Administration tests showed the SUV withstood side-impact crashes quite well, the vehicle ranked lower in driver’s side head-on crashes, receiving three stars out of a possible five. The Toyota received four stars in the head-on category and three to four stars in the side-impact category.

State Farm says its ranking system reflects more than tests. Company spokesman Dick Luedke said the insurer used 4.5 million of its customers’ accident claims that showed who got hurt, how often and how badly in various makes and models to come up with the system.

“Controlled tests are not the same as putting a car out there in the real world,” Luedke said.

Toyota has contacted State Farm to determine why its popular Camry received a C rating, said Julie Alfonso, Toyota USA spokeswoman.

“The Camry is a very safe car,” Alfonso said.

So how is a consumer supposed to know which vehicles are safe, when the experts sometimes disagree? The short answer is that there is no easy way.

If you listen to insurance industry officials, you would buy the biggest car possible, because in their experience bigger is usually better.

The Insurance Institute for Highway Safety, like State Farm, found that SUVs and other big vehicles tend to do more damage to other cars in crashes, but often better protect occupants and suffer less damage themselves.

“The mass and size of a car is important in protection” of its occupants, said Susan Ferguson, the institute’s vice president for research.

Ferguson said the key to reducing damage and costs to smaller cars lies not in making SUVs less bulky, but in making smaller cars heavier. More mass means more safety, she said.

That infuriates consumer advocates and environmentalists, who say heavier cars cause more pollution and consume more gas, adding that discounts such as State Farm’s unfairly benefit wealthier drivers who can afford larger cars.

It may also be going a bit overboard to buy a vehicle simply because of one insurer’s rating system.

State Farm’s system, after all, won’t affect most drivers--at least not yet. About one in six State Farm drivers will pay more, one in six will pay less and premiums for the rest won’t be affected. At most, State Farm estimates the change will alter medical coverage premiums by $50 or so.

At the same time, you shouldn’t ignore what insurers have to say about the vehicle you choose. Not only do you want to keep life and limb intact, but also selecting the right car will reduce your insurance premiums in other ways.

State Farm and most other auto insurers use their claims databases to help determine how much drivers pay for collision and comprehensive coverage, for example.

Cars with the fewest damage and theft claims typically command a 10% to 40% discount for standard collision and comprehensive coverage, State Farm officials said. Vehicles that typically sustain more damage or that are favorites of thieves--such as the frequently stolen Camry and the Honda Accord--tend to be charged higher premiums for collision and comprehensive.

Insurers don’t always punish or reward the same vehicles in the same ways, however. Because insurance companies base their rates at least in part on their own claims, their pricing systems can vary widely, said Candysse Miller, executive director of the trade group Insurance Information Network of California.

So even if other companies adopt State Farm’s tiered rating system for medical coverage, they might not come up with the same evaluations of a car’s safety.

Thus, the advice to consumers is what it always is--shop around. Before you buy a car, evaluate its safety by visiting the insurance and government Web sites and seeing what Consumer Reports has to say.

Then get insurance quotes from several companies before you buy. Although the State Farm change is expected to have a marginal price impact, doing a little shopping for insurance can save you hundreds of dollars a year.

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Questions can be sent to Liz Pulliam Weston at liz.pulliam@latimes.com or mailed to her in care of Money Talk, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012.

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How Does Your Car Compare?

* Safety and crash-test information for most models can be found at the following Web sites:

* State Farm Insurance at www.statefarm.com ; click on “Vehicle Safety Discount”

* Insurance Institute for Highway Safety at www.highwaysafety.org ; click on “Vehicle Ratings”

* National Highway Traffic Safety Administration at www.nhtsa.dot.gov

* Consumer Reports’ car-pricing service at www.consumerreports.org offers price and safety information on individual models for $12

Source: Los Angeles Times research