Non-College Drivers Charged More by Some Car Insurance Companies
According to a new report by the Consumer Federation of America (CFA), several auto insurance companies charge policy holders more if they do not have a college degree and a white collar job.
The CFA created two identical fake customers, who had different education levels and careers. The fake people also had the same driving records and lived in the same area. Then the CFA tried to get insurance quotes for both of them.
According to RawStory.com, GEICO, Farmers, American Family, Liberty Mutual and Progressive insurance companies all gave quotes that favored the college student with a better job.
The CFA report states:
GEICO often charges a factory worker with a high school degree far higher annual premiums than a plant supervisor with a college degree: 45% more in Seattle ($870 vs.$599), 40% more in Hartford ($1299 vs. $926), 33% more in Oakland ($922 vs. $693), 23% more in Louisville ($2200 vs. $1791), 21% more in Chicago ($1013 vs. $840), and 20% more in Baltimore ($1971 vs. $1647)
Progressive also often charges a factory worker with a high school degree higher annual premiums than a plant supervisor with a college degree: 33% more in Baltimore ($1818 vs. $1362), 14% more in Houston ($1406 vs. $1236), 9% more in Louisville ($2390 vs. $2185), 9% more in Denver ($995 vs. $911), and 8% more in Oakland ($736 vs. $684).
“The American public knows that it is unfair for auto insurers to use factors like education and occupation in setting rates. In effect, auto insurers are discriminating on the basis of income and race. States should prohibit the use of these demographic factors that bear no logical relation to insurer risk," said J. Robert Hunter, CFA’s Director of Insurance, in a press release.
The CFA reports that State Farm, Allstate, USAA, Nationwide and Travelers do not use education or careers to judge potential customers' rates.