Did you know that your level of education can effect the cost of your auto insurance? Are you also aware that the job you hold can also effect how high your insurance premiums are for auto insurance? It is mostly the major insurers which do this. This information comes from a study performed by the Consumer Federation of America.
The Consumer Federation of America found that it is more likely that the major insurers will use non driving data and non traditional data such as your job and education to determine your rates. While the data used to determine rates varied from insurer to insurer, one clear point stood out, most major insurers all had one common link, using education and job type for or against drivers. Should insurance companies base part of your rate based on what type of job you have, or what level of education you have?
The jobs where consumers saw the highest rise to their premiums is blue collar jobs, such as factory jobs. Also consumers with only a high school education were and are deemed more risky drivers, and hence pay a higher premium. Insurers who are doing this include GEICO, Progressive, Farmers Insurance Group, and Liberty Mutual.
In the past factors that were used to determine your rate included the type of car you have, for example sports cars tend to carry a higher rate than a station wagon. Other factors include age, frequency and severity of past accidents, violations and how many miles you drive per day, as well as if you live in a city or a rural area. These factors are more indicative of risk than if you have a white collar job versus a blue collar job. Discriminating based on education and job title is closely related to income and race often times, so this type of factoring to determine ones insurance rates can amount to racial discrimination, according to Stephen Brobeck, executive director of the CFA.
The study is pretty accurate, in the fact that the study requested quotes based on a 30 year female driver, who had a perfect driving record. For GEICO the rate quoted for a Chicago driver was $1,013, meanwhile the same driver with a higher education only had to pay $840. The prices for GEICO also varied from city to city, for example the same hypothetical driver requesting a quote in Seattle would have had to shell out $870 versus $599 for a driver who also had a perfect record but a higher education and a white collar job.
The insurance industry via the Insurance Information Institute, claims that this data actually does correlate to risk that a driver may end up in an accident. Robert Hartwig, president of the Insurance Information Institute, claims that if the insurance industry could not use this data, it would cause drivers with perfect driving records to have to share the cost burden for bad drivers. Yet in the example used by the Consumer Federation of America, the fictional driver they got quotes for was 30 years old with a flawless driving record, yet was paying much more for a premium. Clearly something does not add up with the insurance industries claims.
What can you do if you fall into this category of drivers? You can look towards the non major insurers. Smaller insurance companies are often times not as likely to use this data against you in regards to pricing. If you have a blue collar job, or only a high school education, you should make use of rate shopping much more. By comparing rates between auto insurers, you stand a better chance of finding the best deal. Out website features reviews on many of the leading auto insurers throughout the nation, giving you a good place to start your search.