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Auto Insurers Are Charging Blue Collar Workers Higher Rates

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On: Thu, Jul 25, 2013 at 5:17PM | By: Elizabeth Puckett

Auto Insurers Are Charging Blue Collar Workers Higher Rates

Auto insurance providers are being shamed by the Consumer Federation of America (CFA) for some shady practices. What their new report has found is that major auto insurance providers are being unfair in the way they design auto policies. Shockingly, auto insurance companies are actually selling insurance at a higher rate to people based on discriminatory education standards and occupation types.

The report's analysis of the top 10 insurance providers in the United States showed that quotes were quite a bit higher for people with lower status blue collar jobs and less education. In some instances, the increased rates are as much as 40 percent more because of job and education status.

The director of the CFA, J. Robert Hunter, does not believe that people should have to pay more because they make less. He thinks that occupation and education should not factor into the rate of an auto insurance policy. Hunter even goes as far as to point out that many people drive uninsured because auto insurance rates are too high and they can’t afford them when have low or moderate incomes.

To gather the information in the new study, the CFA got online and gathered price quotes for hypothetical customers. These two customers were a factory worker who has a high school diploma and a plant supervisor who has a college degree. In every other aspect, the two made-up customers were the same. They were both single 30-year-old women who rent homes in a moderate income level area and drive a 2003 Honda Civic. Neither hypothetical customer had an accident or moving violation in 10 years and have not had a lapsed policy.

The quote gathering occured in May and June when the CFA tried to gather rates from the largest auto insurance companies; the policies quoted was for minimum liability coverage over ten major metropolitan areas including Louisville, Atlanta, Houston, Chicago, Denver, Oakland, Phoenix, Seattle, Hartford, and Baltimore.

Of the top 10 companies studied, CFA discovered that American Family, GEICO, Farmers, Liberty Mutual, and Progressive take education and occupation into consideration when quoting policies. These auto insurance providers charge notably higher premium rates for customers with perfect driving records looking for minimal coverage based on occupation and education.

This practice is unfair to families who are faced with the choice of purchasing a policy they cannot afford and making sacrifices in other important areas of their budget, or driving uninsured and breaking the law.


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