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Purveyor

(29,876 posts)
Mon Jun 27, 2016, 05:11 PM Jun 2016

Poor? You’re Going to Pay More for Car Insurance, Research Finds

Lower-income individuals may be paying more for car insurance, according to recent research by the Consumer Federation of America (CFA).

“Insurance companies are penalizing good drivers by hundreds and sometimes thousands of dollars each year based on economic and social status, and the end result is that the poor pay more, much more,” J. Robert Hunter, CFA’s director of insurance, said in a press release.

According to the study, those who have a higher economic status pay an average of $1,144 for car insurance each year, while premiums increased about 59% (to $1,825 each year) for those with a lower economic status.

Methodology

The study looked at the five factors most insurance providers use to give an insurance quote that can help determine economic status: education level, occupation, marital status, homeownership status and whether they have owned a car for the past six months.

more...

http://blog.credit.com/2016/06/poor-youre-going-to-pay-more-for-car-insurance-research-finds-149160/

11 replies = new reply since forum marked as read
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Poor? You’re Going to Pay More for Car Insurance, Research Finds (Original Post) Purveyor Jun 2016 OP
In my case once I turned 50 my car insurance Lance Bass esquire Jun 2016 #1
I was an auto and homeowners underwriter for various companies earlier in my career. WillowTree Jun 2016 #8
Isn't this just telling us something that actuaries have figgured out decades ago? Travis_0004 Jun 2016 #2
That would constitute... Xolodno Jun 2016 #3
No, it's not redlining SickOfTheOnePct Jun 2016 #5
That's not what redlining is. WillowTree Jun 2016 #6
I stand corrected. Xolodno Jun 2016 #9
I have safe driver discount and a few others. yeoman6987 Jun 2016 #4
Credit Score and address of Insured are biggies Redford Jun 2016 #7
I am 77 years old 1939 Jun 2016 #10
No. Rating based on the fraud and/or crime rate in the area is not redlining. WillowTree Jun 2016 #11
 

Lance Bass esquire

(671 posts)
1. In my case once I turned 50 my car insurance
Mon Jun 27, 2016, 05:36 PM
Jun 2016

Has really bottomed out. Went from 275 a month down to 120. I drive a new tricked out Dodge Challenger and the wife a Charger.

The age factor does come into play.

JMHO

WillowTree

(5,325 posts)
8. I was an auto and homeowners underwriter for various companies earlier in my career.
Mon Jun 27, 2016, 06:55 PM
Jun 2016

In the cases of virtually every company I either worked for or quoted, rates for drivers with good driving records always dropped around 55 or 60 and there were no "age breaks" after that. So imagine my surprise when my rate actually increased this spring. Not drastically, but I would have expected them to go down somewhat because my car had aged. When I called Geico, where I'd had my auto insurance for about 8 years, they said that it was because of my age (66). As I said, I'd been with them for quite awhile on a late-model car with no claims and no tickets on my MVR, so this was really unexpected.

After quoting around, I reduced my rate for equivalent coverage by $180 every six months. Geico's loss.

 

Travis_0004

(5,417 posts)
2. Isn't this just telling us something that actuaries have figgured out decades ago?
Mon Jun 27, 2016, 05:57 PM
Jun 2016

I realize that there drivers in high risk pools that are great drivers.

There are drivers in low risk pools that suck. Once can't examine every single drivers exact driving style, so the best they can do it assign people to risk pools as best they can.

Xolodno

(6,341 posts)
3. That would constitute...
Mon Jun 27, 2016, 06:06 PM
Jun 2016

"Redlining". And its illegal. I wonder which companies and in which states they discovered this...Its just begging for a DOI investigation.

WillowTree

(5,325 posts)
6. That's not what redlining is.
Mon Jun 27, 2016, 06:45 PM
Jun 2016

What constitutes redlining for purposes of developing insurance rates is applying higher rates in certain areas based on racial and/or ethnic population.

Xolodno

(6,341 posts)
9. I stand corrected.
Mon Jun 27, 2016, 07:07 PM
Jun 2016

For whatever reason, I saw "poor" and assumed racial.

And yes its not illegal....in a number states. A number prohibit credit scoring for determining insurance rates....even then, some companies get around this by giving a cheaper rate if they agree to provide their credit score and a higher rate if they refuse. The rate isn't determined by the credit score, but you can bet those with poor credit ratings refuse to have their score released thinking it does affect their rate.

 

yeoman6987

(14,449 posts)
4. I have safe driver discount and a few others.
Mon Jun 27, 2016, 06:14 PM
Jun 2016

I pay around 1200 a year. Beats what I paid in my teens and twenties. Everyone starts off with high premiums and as the years go the premiums go down. Too many jump from one insurance company to another. Dumb in my opinion. I've had usaa for over 20 years.

Redford

(373 posts)
7. Credit Score and address of Insured are biggies
Mon Jun 27, 2016, 06:54 PM
Jun 2016

One of the elements of premium determination is where the vehicle is "garaged". If you live in an area of higher crime, which is true of many poorer citizens, you will pay more for your insurance.

1939

(1,683 posts)
10. I am 77 years old
Mon Jun 27, 2016, 07:26 PM
Jun 2016

I only use my cars for errands and put very low mileage one them. I do not commute and have a good driving and claims record. I have a credit score over 800.

I still pay through the nose for auto insurance because i live in southeast Florida which is the fraudulent claim capital (dishonest chiropractors and trial lawyers) of the US and because so many newer cars get stolen and shipped to the Caribbean or South America in a container. Thus, I am a victim of redlining.


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