State Farm Implements Annual Vehicle Ratings

Taking advantage of its claims data, State Farm Mutual Automobile Insurance Company is implementing its annual vehicle insurance ratings for specific makes and models of vehicles.

For many years, State Farm has used its claim payment amounts for vehicle damage and theft to create a damage and theft index (DTI). The DTI determines which vehicles qualify for what level of premium for the collision and comprehensive coverages.

Four years ago, the company launched a similar program after evaluating the cost of claims involving injury to occupants of the insured vehicle. Depending on that cost, makes and models of vehicles qualify for varying levels of vehicle safety discounts (VSD).

Now State Farm is also using its claim payment amounts for damage to other vehicles and injury to the occupants of those vehicles to create a liability rating index (LRI). The LRI determines which vehicles qualify for what level of premium for the liability coverage.

DTI – Models generating lower payment for damage to and theft of the insured vehicle are generally charged from 10 to 40 percent less than the standard collision and comprehensive premiums for vehicles in their price range. Models generating higher payment for damage to and theft of the insured vehicle are generally charged from 10 to 40 percent more than the standard premiums for those coverages for vehicles in their price range.

VSD – Models generating lower payment for injury to occupants of the insured vehicle are awarded vehicle safety discounts of up to 40 percent on the medical payments and personal injury protection coverages.

LRI – Models generating lower payment for damage to other vehicles and injury to occupants of those vehicles will be charged less than the standard liability premiums. Models generating higher payment for damage to other vehicles and injury to occupants of those vehicles will be charged more than the standard liability premiums.

These ratings do not apply in Massachusetts, Texas, North Carolina, and Canada. Approval of these changes is pending in California and Georgia.

For a list of the damage and theft indexes (DTIs), vehicle safety discounts (VSDs) and liability rating indexes (LRIs) for all 2005 makes and models, visit www.statefarm.com.