Income, Not Driving Record, May Determine Auto Insurance Cost
Some high-income motorists, but poor driving records, can pay less for car records with older records compared to low-insured consumers, a new analysis has been found.
Using websites for five large insurers in 10 large cities, researchers with the Consumer Union of America, an advocacy group obtained quotes for two fictional drivers with various social economic characteristics.
The analysis found that in 20 out of 38 tests (53 percent), a medium-income driver with a clean-record was charged more for original auto liability insurance compared to a high-income driver due to which an accident There was no one injured.
However, the auto insurance industry criticized the report as “defective” and said that all underwriting factors used by insurance companies prove to be “enhancing accuracy of predicted loss”.
Researchers requested 600 quotations for coverage and 464 received. In some instances, an insurance company has not given policies in a particular city. In other cases, the website refused to provide a bid for lower-income driver. In others, a company does not provide either a quote for the driver.
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It was also found in the analysis that a comparison is possible in 21 to 30 tests (70 percent), with a clean-record, a medium-income driver has recently been compared with high income driver with addictive washing-driving The high rate for basic coverage was cited punishment.
Insurance director J. Robert Hunter for the Consumer Federation said in a call with reporters, “It is extremely unfair.” The organization opposes the use of proximity-related factors in determining the rate for auto insurance, provided most states are required for the minimum liability coverage.
David Snyder, vice president of policy development and research, with the Insurance Institute Association of the Property Crisis said, “Insurance companies did not consider income in setting auto rates. Insurers consider many parameters, they said, like driver’s age and driving history, because they help in fixing premium pricing. “We use a factor because it estimates the risk,” he said.
Mr. Snyder also said that the comparison of both the fictional drivers was wrong because only the medium-income driver was assigned a specialty, as a difference in coverage – in the last six months, they had no insurance because they did not have a car. He said, this type of trench usually affects the quoted premium, regardless of the other properties of the driver.
The federation, however, says that socioeconomic factors are the proxy for income by determining the rates of business and education by the insurers. In its analysis, the group entrusted one of the highly conceptual drivers to the specific characteristics of an upper income American, including a Master’s degree and a job as a bank executive officer; He gave a high school diploma to another and worked as a bank teller. (“Tested” drivers shared some basic features: Women of every year, 30 years old, licensed for 14 years and Toyota Camry had gone 10,000 miles in 2006.)
It has been found in the study that there is a variety of quotation marks between the insured – Allstate, Farmer, Geoco, Progressive and State Farm. State form was most likely to charge good driver well, regardless of social economic status, found analysis.
Progressive and Geoco, the report says that compared to the good-income middle-income drivers, there was more chances of charging higher-income poor drivers. In Queens, for example, progressive quoted $ 6,404 for a medium-income clean driver and $ 3,020 for a top-income driver with a drunk driving acceptance. Progressive comment refused to comment
Geico requested a request for comment on Insurance Institute, which publishes a list of parameters used to set automatic rates.
James Lynch, an industry group, Chief Engineer of Insurance Information Institute, said that the method of researchers was not necessarily what really happened in the market. For example, he said, for any drunk driving, it can be difficult for any person to get coverage, do not vote at a lower rate than a safe driver.
Doug Heller, an insurance expert with the association and study author, said that he agreed that a driver was hard to find coverage with the punishment of alcohol but he said that he got insurance once it was worse Driving was easy to record.
Los Angeles was the only market where safe but less endowed
Mr. Heller said that because California had consumer protections controlling auto insurance rates. For example, the state clearly stops the use of a driver’s previous insurance coverage history in establishing rates, he said.
Here are some questions and answers about auto insurance rates:
Can I get the rate information from my state’s insurance department?
Most state insurance departments are websites that provide the estimated premium range as well as complaint data, said that Elizabeth Renter, who had recently analyzed the offerings of sites for the financial website Nestle Wallet, but the information provided by the states They were quite different, they said, and it was easy for consumers to run on the top of Texas’s site ranking While New Mexico’s score is down.
How can I get the best auto insurance rates?
Industry and consumer advocates believe that it is important to get the best price of coverage to quote and purchase from many insurance companies.
What if I have a good explanation for the interval of my insurance coverage?
Mr. Snyder said that with one of his concerns with the study of the Federation, it was said that the consumer did not show “real world” about what happened after receiving an online bid. If, for example, an experienced soldier had no insurance for a while during the futures foot, then he should discuss the situation with the insurer, he said. “If you have any explanation,” they said, “bring it with the company.”
Source: Best Health Insurance UK