Premium Parity

Fairer auto insurance rates

Whether they are model drivers or hot-rod hellions, men aged 16 to 24 are usually socked with screechingly high auto insurance premiums. That discrimination could end if an experiment started in Connecticut last week by Motors Insurance Corp. is adopted by other companies. MIC, owned by General Motors, will make highway performance--not age, sex or marital status--its guide to rate setting.

Under the MIC program, an 18-year-old Hartford fellow just getting a license to drive his new Chevy Citation, for example, pays exactly the same as a 35-year-old Hartford housewife climbing behind the wheel of the same model car for the first time. Drivers will receive premium reductions for each year of accident-free motoring, up to a maximum of five consecutive years. MIC estimates that people under 25 will pay an average of 55% less than they have been paying.

The catch is that MIC policyholders will be charged higher deductibles on claims--$500 on the majority of crashes instead of the standard $200. Rates for the accident-prone rise steeply. But that is the whole idea: to shift more of the financial burden to those responsible for wrecks. Adults and adolescents alike will have an even stronger incentive to slow down and stay sober.

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