General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsAmerican insurers charge reckless rich drivers less than safe poor drivers
"The Consumer Federation of America did a mystery shopper review of several auto insurers and found that drivers with at-fault accidents paid lower premiums than drivers with spotless records -- provided that the careless driver was rich and well-educated and the careful driver was a single renter without an advanced degree. "
Whole article at http://boingboing.net/2013/01/29/american-insurers-charge-reckl.html
Original article at
http://consumerist.com/2013/01/28/consumer-group-the-rich-may-pay-less-for-car-insurance-even-if-theyre-not-safe-drivers/
Another industry that needs to be better regulated, imo.
leftyohiolib
(5,917 posts)insurers all my prems went up- they take risk into account and they define risk as being poor (although i didnt file b/c i was poor i was on advice from my lawyer regarding an accident)
lynne
(3,118 posts)- due to the variables they used. They compared a single woman, renter, with a 45+ day lapse in coverage to a married woman who owned her home that had been in an accident with $800. in property damage.
Rules and rates vary from state to state but I didn't see any state reference. The single woman lost a premium discount for not being a homeowner. She also received a premium surcharge for having a lapse in coverage.
The married woman received a discount for owning a home and was not surcharged for having a lapse in coverage. Her accident was not figured into the equation as $800. property damage is - in many states - not enough damage to trigger a premium surcharge. The trigger is normally $1,000. property damage. There is no reference to what type vehicle was insured. If the two women were given different vehicles, that could also make a difference in premium.
The only factor that points to income would be home ownership, which generates a premium reduction with some - but not all - companies.
Pretty much a sham comparison that was geared to get specific results. If they want to do this to prove that those with less pay more they need to compare rates for two women with very different incomes only and not throw in other factors that will impact the premium.
FSogol
(45,452 posts)REP
(21,691 posts)LanternWaste
(37,748 posts)I imagine it would be a clear indication of many possible scenarios... financial problems being simply one of many.
lynne
(3,118 posts)- could be the vehicle wasn't on the road for a while or they somehow missed the bill. Yes, that happens where people will miss a bill. People who have never had a policy and have no insurance history have the same situation where they pay a bit extra the first time. They end up with a "renewal discount" when the policy renews, reducing the premium.
Recursion
(56,582 posts)It sucks, but I can see why they would do that. Until very recently poor people had to pay a lot more for cell phone service, too, for that exact reason.
Egalitarian Thug
(12,448 posts)They haven't done the job that they are allowed to exist to do for decades. It is time to eliminate them and take on the job for ourselves.
Liberal_in_LA
(44,397 posts)"are you a homeowner" and offer discounts and perks for those who are. FOR NOT &%$# reason. it's a real divide.
Xolodno
(6,384 posts)...and I know, I work in it.
A good driver is one factor. But, if you are poor then you are statistically more likely to live in an area more prone to theft and vandalism, other uninsured or underinsured drivers which counts against you. Never had a claim? Who cares, the stats say its more likely going to happen to you than the person who did have a claim for second time in a well to do area. The actuarial science is what drives premiums.
And yes, being a homeowner does give you a discount vs. a renter. If you are a renter chances are other renters live near you and in the event one of them is at fault for totaling you car, if they have insurance, it tends to be minimal amounts with limited recovery. If they don't...they have no assets to sue against. So yeah, you get a discount for being an owner because the insurance company can lessen the loss through salvage, lawsuits, etc.
Insurance companies segment like crazy on this, because they want to get the best risk, if not, enough premium to cover the overall losses. Just the way it is.