Car Insurers Like Rich People Better
Study: Good drivers who are poor often pay higher premiums
By John Johnson, Newser Staff
Posted Jan 29, 2013 2:15 PM CST
   (Shutterstock)

(Newser) – A meticulous driving record isn't enough to keep your insurance premiums down—it helps to be rich, reports AOL Autos. A new study by the Consumer Federation of America found that insurers often charge good drivers with low incomes more than lousy drivers with high incomes. The study sought estimates in 12 cities for two hypothetical women: a receptionist with no college education who rents an apartment and has no accidents on her record versus a married executive with a master's who owns a home and has a recent at-fault accident.

Big insurers Farmers, Geico, and Progressive gave the receptionist a higher quote in all 12 cities. "We're talking more than pocket change," writes AOL's Pete Bigelow. "In more than 60% of cases studied, the safer driver was charged at least 25% more than the one with a checkered driving record." One notable exception: State Farm gave the receptionist a cheaper quote in all the cities.

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Showing 3 of 18 comments
dawnarun
Jan 31, 2013 2:37 AM CST
I switched to State Farm a few years ago after having Allstate for a while. I had been wanting to lower my deductible for a while because it made me a bit uneasy to have it so high when my income had gone down. When Allstate released some really annoying commercials, it prompted me to go quote shopping. State Farm gave me a quote for 1/2 of my old deductible for 2/3 of what I was paying at Allstate. When I went to cancel with Allstate they tried to entice me into staying by matching the rate -- when I told them they lowered the deductible too the guy on the phone said "Oh..." and there was this awkward silence for a moment. Then he continued my cancellation without hassle. Pretty neat to read that they're not just awesome to me.
briin79
Jan 30, 2013 8:01 AM CST
I can attest to this study. When i was living paycheck to paycheck the rates were high. I recieved 4 tickets within a 6 month span, Within that 6 month span i also paid off all my debt and raised my credit score atleast 100 points. Guess what my premiums went way down! i didnt move, nor did i have a birthday. What these insurance companies are doing is complete bullshit. Im in FL maybe laws are different in other states. But i saw this first hand.
raeriva
Jan 29, 2013 5:44 PM CST
Could it maybe have something to do with the corresponding neighborhoods the vehicles would be parked in? I'm sorry, but more $$ generally means a safer neighborhood...