Report: Auto Insurers Using Unfair Rating Factors

April 7, 2014 7:05 PM

Report: Auto Insurers Using Unfair Rating Factors

" ALBANY, N.Y. (AP) — New York’s largest auto insurers factor in a motorist’s education level and occupation when calculating policy rates, charging blue-collar workers more than college-educated professionals, a consumer watchdog group reported Thursday.

The analysis by the New York Public Interest Research Group analyzed online insurance quotes from GEICO, Progressive and Liberty Mutual and found that prices ranged by hundreds of dollars depending on the education and occupation of the potential policyholder.

Using these factors to set rates disadvantages minorities, who are statistically less likely to have a college degree or a management-level or professional occupation, according to Andy Morrison, a consumer advocate at NYPIRG. The group has asked the state’s Department of Financial Services to review the practice to see if it violates state insurance regulations, which prohibit discriminatory rate practices.

“They’re considering factors that have nothing to do with your ability to drive,” Morrison said in an interview. “In many cases, it increases rates for those who can least afford it.”

Education and occupation are among “a wide variety of proven factors” used to determine rates, according to a statement from Jim Whittle, assistant general counsel at the American Insurance Association, an insurance trade organization "

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