Lower-income drivers with good records often pay more for auto insurance than richer, says report
Wake up and good morning. A 12-city survey that includes Tampa finds that good drivers who happen to have low incomes often are punished by auto insurance companies. Or, put another way: The richer you are, apparently the better deal you can get on auto coverage.
"The largest U.S. auto insurers weigh occupation and education levels more than driving records to set rates for minimum-liability coverage," says this Bloomberg New story on the CFA report.
The CFA results are inconsistent and vary by insurer and city, suggesting a certain arbitrariness to auto coverage pricing.
Here's what the results show in Tampa based when comparing a minimum-liability policy for a female receptionist with a high school education and renting but with a good driving record who has been without insurance for 45 days, and a female executive who is married, owns a home, has a master's degree but had an at-fault accident with $800 damage in the past three years.
Farmers Insurance charged the receptionist $2,952 and the executive $2,204 -- a $748 difference.
Progressive Insurance charged the receptionist $1,748 and the executive $1,248 -- a $560 difference.
State Farm, on the other hand, charged the receptionist $1,792 and the executive $2,265 -- or $473 less.
(Other insurers including GEICO and Allstate did not provide comparative quotes in Tampa in this CFA study.)
Overall, among the 12 cities insurers generally gave lower quotes to the executive than to the receptionist. That, the consumer advocacy CFA says, shows insurers are using discriminatory metrics in setting rates that are mandated in most states.
-- Robert Trigaux, Business Columnist, Tampa Bay Times