Auto insurance company discrimination

When Good Drivers Pay More for Insurance than Bad Ones 

By ANN CARRNS, NYT

Some big insurance companies charge higher auto rates for lower-income drivers, even if the drivers have safe driving records, an analysis from the Consumer Federation of America finds.

The federation, a nonprofit comprising 250 consumer groups, has argued that insurers often give nondriving-related factors, like occupation and education, more weight than driving-related factors, and that such practices unfairly penalize lower- and moderate-income drivers. Occupation and education, the federation says, are proxies for income.

In its latest report, the federation obtained insurance quotes in 12 different cities from the public Web sites of five big auto insurers, using information for two hypothetical women. The insurers -- State Farm, Allstate, GEICO, Farmers and Progressive -- represent more than half of the private auto insurance market, the federation said.

Both drivers shared certain characteristics: Each was 30 years old; had been a driver for 10 years; lived in a Zip code with a median income of $50,000; owned and drove a 2002 Honda Civic; drove 7,500 miles per year and carried the minimum auto liability insurance required by state law (minimums vary from state to state).

(More here.)