Consumers don’t think it’s fair for auto insurers to consider education level, occupation, and lack of previous insurance in setting a driver’s premium, a survey from the Consumer Federation of America shows. Most major insurers, it said, use such non-driving factors, which greatly increases premiums for low- and moderate-income drivers, often by more than 100 percent.
CFA executive director Stephen Brobeck said, “…these factors have nothing to do with driving and discriminate against lower-income drivers.” He said,“Premiums should largely reflect factors such as accidents, speeding tickets, and miles driven, over which drivers have some control and which directly affect insurer costs.”
The survey polled 1,010 adult Americans in June.
All six factors rejected by consumers – gender, credit score, level of education, no previous insurance because the consumer did not own a car, occupation, and ZIP code of residence – do not relate to the consumer’s driving history and result in a wide variation in rates, the CFA said.
Only 31 percent of those surveyed said they favor the use of level of education to determine premiums, while just 33 percent favor factoring in a driver’s occupation in setting prices. By contrast, 87 percent support factoring in traffic accidents caused by the driver, and 85 percent favor considering moving violations.