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Auto Insurers Increase Premiums for Less Educated Drivers

Posted on behalf of Stephens, Anderson & Cummings on Aug 20, 2013 in Auto Accidents

In addition to being required by law, car insurance is essential for any driver on the roads. Insurance coverage ensures that in the event of an accident, injured victims will not have to pay all of their medical bills or other losses out of pocket.

As important as insurance is, many low-income drivers are finding themselves unable to afford auto insurance. According to a new report from the Consumer Federation of America (CFA), some major auto insurers are charging drivers with less education and lower-status jobs higher premiums than drivers with advanced degrees.

Should Education Determine Your Premium?  

The CFA’s research showed that lower income and less-educated drivers are being charged more by companies like GEICO, Progressive, and Liberty Mutual than those drivers who have obtained advanced degrees, government jobs, or jobs which are considered “professional.”

For example, the CFA’s study looked at the jobs and income level of several applicants for insurance policies with major insurers around the country. On average, those drivers who had only obtained a high school diploma, or had no diploma at all, were charged hundreds of dollars more per year in premium than their college-educated counterparts. The insurers also charged drivers extra for working in lower paying occupations, such as a factory worker versus a factory supervisor.

Research also showed that factors such as occupation and education level are strongly correlated with income levels and race or ethnicity. While insurers cannot discriminate on these bases, using education and occupation appears to be a way for insurers to get around these rules.

The CFA’s Director of Insurance, J. Robert Hunter, commented that the results of the study showed that auto insurers are either overcharging lower-income consumers or are not interested in serving them. Since all state governments require auto insurance, Hunter called on state legislatures to address these issues with legislation. The CFA is continuing to campaign for reasonable auto insurance rates for low and moderate income drivers.

Expensive Insurance Affects All Drivers

Unfortunately, if people with lower income are charged exorbitant rates for insurance, they may be unable to pay for the minimum coverage and could drive without it. If that person gets into an accident, anyone injured may be left without recovery for any damages or medical bills he or she should otherwise receive.

Driving without insurance puts all drivers on the road at risk for thousands of dollars in medical bills that they may not be able to pay. If you have been injured in an auto accident that was caused by an uninsured driver, you need experienced legal help in order to recover for your injuries. Contact the Stephens, Anderson & Cummings personal injury firm in Fort Worth at 877-920-9009 for a free consultation today.