Interpretation ID: aiam2381
House of Representatives
Washington
DC 20515;
Dear Mr. Butler: Your letter of June 23, 1976, forwarding correspondence from one o your constituents, Mr. Ralph L. Lichtfuss, concerning the effect of Federal bumper requirements on insurance costs, has been referred to the National Highway Traffic Safety Administration (NHTSA) by the Federal Trade Commission for reply.; Mr. Lichtfuss cites a newspaper article in which escalating insuranc rates are attributed to inflation. As an example of the inflationary impact in this area, the article's author states that the cost of the 1970 Ford LTD front bumper was $68.00, while the cost of the same component on the 1976 LTD model is $334.90. Mr. Lichtfuss asks whether Federal regulations are responsible for this cost increase and the resulting escalation in insurance premiums.; A part of the increased cost is due to Federal regulation. Federa Motor Vehicle Safety Standard No. 215, *Exterior Protection*, requires that cars be capable of sustaining 5 mph barrier and pendulum impacts without experiencing damage to specified safety components. Compliance with this standard by motor vehicle manufacturers has been achieved by upgrading the vehicle bumper system. Although the new bumpers cost more, they protect vehicles during low-speed crashes far better than the old 'cosmetic' bumpers.; The higher costs are offset to a significant degree by savings i insurance costs. The insurance industry has supported the standard throughout, and currently takes the position that a weakening of the standard would increase liability costs for insured motorists and out-of-pocket expenses for those without collision insurance.; It appears from the insurance industry position, as reflected in th enclosed press release, that the Federal requirements mandating more efficient bumpers are not responsible for increases in automobile insurance rates.; Sincerely, Frank Berndt, Acting Chief Counsel