State Farm, the biggest auto insurer in the US, is expected to announce that it will reduce premiums for drivers of the biggest cars, trucks and sport utility vehicles, the New York Times (NYT) reports.

The newspaper says the decision is based on claims data showing big vehicles as the safest for passengers.

The NYT says the reductions will take the form of discounts on the medical portion of coverage and may make a difference in annual premiums of no more than a $US 50 per year. It says that overall insurance costs will remain more expensive for drivers of big rather than small vehicles.

By ignoring the threat that bigger cars pose to smaller vehicles with its new pricing structure -which will replace near-universal discounts for vehicles equipped with air bags — State Farm has drawn criticism from consumer advocates who called it unfair to a majority of drivers, the NYT says.

It reported State Farm chief actuary Gary Grant as saying that the company was concerned about the disproportionate damage that big cars can inflict on smaller ones. But he noted that claims records show that big cars are involved in fewer accidents than smaller ones.

The NYT says that the biggest discount of 40% will go to drivers of big, expensive cars, vans, pickups and sport utilities like the heavy, high-riding Chevrolet Suburban, a number of Ford and GMC vans, two Ford pickups and some Acuras, BMWs, Mercedes-Benzes and Jaguars.

However, those driving smaller vehicles such as the Ford Contour, the Chevrolet Cavalier and many popular Japanese models will receive only 20% discounts on the portion of their premium covering personal injuries to occupants, the NYT says, noting that State Farm has for years given a 30% discount to any dual airbag-equipped vehicle.

However, not all big vehicles will automatically get the biggest safety discount. While State Farm does not deal specifically with the issue of SUVs that tend to roll over, the NYT says, it does give several sport utilities, like the Mitsubishi Montero [known in other markets as the Pajero or Shogun] and two-door Ford Explorer, its lowest safety rating.

Initially, the discounts - which the NYT says are likely to be adopted by other insurers - will be applied to about half the 37 million cars insured by State Farm.

The effect, the newspaper calculates, is that the owners of about 6.2 million cars, or about a third of those to which the new price structure will apply immediately, will pay 10 percent more for medical coverage; another third will pay 10 percent less; and, for the final third, there will be no change.