INSURANCE: Lower Rates

Auto-insurance rates, which have risen sharply since World War II, appear to be on the way down. Rates have soared because 1) courts have been handing out sky-high judgments in accident cases (TIME, Aug. 27, 1951 et seg.) and, 2) the accident rate itself, notably among young drivers, has gone up alarmingly (28% of all drivers involved in fatal auto accidents in 1951 were under 25). But as the rates went up, independent auto-insurance firms began cutting their rates and snatching business from the large companies. Last week a number of big companies got ready to meet the competition by concentrating on the worst traffic offenders of all: young drivers.

The Mutual Insurance Rating Bureau, which represents some 30 companies, filed new “preferred risk” rate schedules in eleven Midwest and western states. Adults who drive less than 7,500 miles a year will get a 20% rate cut; parents who keep their youngsters’ part-time driving down to 25% of the yearly mileage will get a 9% cut. On the other hand, young drivers who take out their own policies arid have no parental supervision will get a 30% hike in rates.

Chicago’s Allstate Insurance Co., a Sears, Roebuck subsidiary and third largest of the independents, also chopped its rates. Premiums on cars driven by high-school youths in 44 states will be shaved 15%, provided each youngster completes an auto safety course of 30 classroom hours and six hours behind the wheel (while more than 6,000 of the nation’s 25,000 high schools offer such courses, only 350,000 of the 2,000,000 students who come of driving age each year take them).

Said Allstate President Calvin Fentress Jr., “If we are honestly interested in making our streets and highways safer, then we must see to it that more and better driver-training programs are installed in our secondary schools . . . There is only one man who sets automobile insurance rates—the man behind the wheel.”