According to an analysis by Consumer Reports, drivers with less education and lower-ranked jobs could pay more for auto insurance, adding to the impact of systemic racism.
The consumer advocacy group sought quotes for a hypothetical person from various insurance companies, varying only the individual's education or occupation. The analysis, released Thursday, found that Geico of Progressive Corp. and Berkshire Hathaway Inc. quoted higher premiums for customers with lower jobs, while those companies and Liberty Mutual gave higher quotes for customers with less education.
Some insurers, including Allstate Corp. and Travelers Cos., did not ask about professional or education level.
The auto insurance industry has traditionally relied on many factors to determine who are the safest risks, but the use of education and employment status has been under scrutiny in recent years. Some states, including New York, have set new regulations concerning the practice. California prohibited the use of gender in automatic assessments.
Consumer Reports said government agencies should ban the use of all non-driving factors in setting premiums.
"They pile up and what eventually happens is that overall, wealthier drivers are likely to have access to auto insurance at better rates than low-income drivers," said Kaveh Waddell, deputy editor for Consumer Reports' digital lab. a telephone interview.
Liberty Mutual looks at "dozens of factors" allowed by government agencies in determining a customer's risk, the company said in an emailed statement, adding that it is committed to offering fair and competitively priced car insurance.
A progressive spokesperson immediately declined to comment, while a Geico representative did not immediately respond to a message asking for comment.
"Profession and education are just two of many non-driving variables that have been proven to improve pricing accuracy for different carriers, leading to more affordable pricing and greater availability in the wider insurance market," said American Property Casualty Insurance Association. in a statement by e-mail.
Consumer Reports analyzed more than 800 price quotes from nine insurers, using 21 zip codes in six different states and Washington DC. The study did not include the entire filing process, meaning Consumer Reports received initial quotes but couldn't see what those factors were like affect the final price.
Copyright 2021 Bloomberg.
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