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Group: Geico Insurance Rates 'Very Unfair'
reuters ^ | 3/20/06

Posted on 03/20/2006 5:25:49 PM PST by mathprof

A leading U.S. consumer group Monday accused Geico Corp. of using consumers' education backgrounds and occupations as criteria in setting auto insurance rates, resulting in discrimination against minorities and lower-income people.

The Consumer Federation of America (CFA) charged that the No. 4 U.S. auto insurer, has adopted rating methods and underwriting guidelines in 44 states that directly tie rates to education and occupation.

Geico, a unit of Berkshire Hathaway Inc. (BRK), the insurance and investment company controlled by billionaire Warren Buffett, rejected the charges. It called them "an offensive attempt to link fundamentally fair and actuarially sound industry practices with invidious discrimination."

The insurer provides auto insurance to more than 6 million policyholders, and insures more than 10 million vehicles.

Robert Hunter, the CFA's director of insurance and a former Texas insurance commissioner, called Geico's rate-setting policies an "underwriting sleight-of-hand" that can shortchange thousands of drivers.

Under Geico's guidelines, he said, a New Orleans factory worker without a high school education would pay $2,636 for insurance, 91 percent more the $1,382 that a white-collar worker with a graduate degree would pay for the same vehicle and location.

(Excerpt) Read more at foxnews.com ...


TOPICS: Culture/Society; News/Current Events; US: Virginia
KEYWORDS: berkshirehathaway; geico; redlining
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To: Indy Pendance
No ****. (hypothetically) I drive good, live in a rural area, am over 40, you have 3 dui's, under 25, live in the city and are looking for a personal injury attorney.

It's one thing to base insurance rates on driving records. It's quite another to base them on statistics like credit scores, educational levels, etc.
141 posted on 03/20/2006 9:20:09 PM PST by Old_Mil (http://www.constitutionparty.org - Forging a Rebirth of Freedom.)
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To: Old_Mil
My credit is good, own my own home, one credit card, not maxed out (use it for business mostly). I have a bs in engineering and and mba. My car is paid for. I'm pushing 50. Sorry to say, I'm probably a better candidate than a young person, say 25 with an associates degree just starting off in life. I've pretty much given up the party life, drink and drive? It's a bottle of Mt. Dew. New Years consists of a shrimp tray and movies, snuggled up at home. I don't do amateur night. It's a statistical fact.
142 posted on 03/20/2006 9:27:43 PM PST by Indy Pendance
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To: csmusaret

I've been with State Farm for over 20 years, never had a single issue, my rates have dropped consistently over the years, never had them raised due to claims, and took care of all my claims fast and sent me to very good repairshops, or sent very good mobile glass guys to my office (gotta love that). Living in the Bay Area, you get your car windows smashed in, it's just gonna happen, and State Farm has never blinked.

I know I have it good, I pay less than $100 a month for full coverage on a sports car and 50K homeowners on the apartment. I've talked to friends who live in places like Detroit, and the rates they pay are sheer highway robbery. I don't know why mine is so much cheaper, but I'm not complaining! My policy is truly average, average deductibles, nothing special, but no cut corners, either.

I have had my chance to say "I told you" to my siblings, who ran around like Speed Racer in their 20's and 30's racking up tickets and a few collisions that were their fault (nobody hurt, thank God). They pay astronomical rates, due to their driving records. "It's just a ticket" has changed to "I have to pay HOW much??!?!"

I can't wait until their kids start driving. Now I know why my dad tried to keep us away from the wheel! 5 kids in the teens and twenties? Yikes!


143 posted on 03/20/2006 9:36:09 PM PST by ByDesign
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To: Indy Pendance
I wonder how much it costs to insure a lowrider?

THAT, of course, depends upon the particular lowrider in question. Are you talking about a Good Guys custom classic Ford '49, chopped, channeled, shaved, painted, and polished down to the very last valve stem cap?

...or...

Are you talking about that rusted out '63 Impala with the "bicycle tires" and the blown stereo speakers that rattles and clanks along with the mariachis blasting half-drunk out of the driver's window that doesn't roll up anymore?

In the first case, you're talking about a very special type of insurance that is based primarily on "Actual Cash Value" established on the appraisal of highly qualified experts. This insurance is the most expensive.

In the second case, you're talking about comprehensive insurance; coverage that takes care of everyone's injuries and other people's stuff. Getting this kind of coverage is about as low-budget as you can go.

Of course, anyone who puts $10,000 in aftermarket stuff into a $25,000 vehicle, would be smart to discuss it with an independent insurance broker who could provide advice about whether "off-the-shelf" coverage is enough and, if not, what additional coverage might be in order, from who and at what cost.

144 posted on 03/21/2006 3:36:04 AM PST by HKMk23 (We keep you alive to serve this ship. Row well, and live.)
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To: mathprof

I used to have insurance with GEICO, but I dropped them because I saved 15% by switching to another company. I checked their rates again not long ago, and they were still higher. GEICO could drop their rates significantly if they would cut back on the endless, obnoxious advertisements. They probably chase away more customers than they pick up that way.


145 posted on 03/21/2006 4:00:58 AM PST by Fresh Wind (Democrats are guilty of whatever they scream the loudest about.)
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To: manic4organic
GEICO doesn't have a socialist bent?

Government Employee Insurance Company

146 posted on 03/21/2006 4:19:20 AM PST by metesky ("Brethren, leave us go amongst them." Rev. Capt. Samuel Johnston Clayton - Ward Bond- The Searchers)
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To: mathprof

Why is this a surprise? The left is pushing us toward a collectivity which sets prices and rates for everyone and makes them the same for all except a rich privileged elite class.


147 posted on 03/21/2006 4:26:42 AM PST by BooksForTheRight.com (what have you done today to fight terrorism/leftism (same thing!))
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To: HKMk23
LOL!!! Hey, don't knock it; if you know MA, THAT'S and ENDORSEMENT!

I live here. The insurace agencts have anough clout to keep them out, in order to preserve their own commissions. I regret that it's against the law for us to save a bunch of money by switching to Geico.

148 posted on 03/21/2006 5:10:42 AM PST by Maceman (Fake but accurate -- and now double-sourced)
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To: Indy Pendance

Alas, poor Bob. His wife didn't "know him well"!


149 posted on 03/21/2006 5:13:37 AM PST by blu (People, for God's sake, think for yourselves!)
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To: Indy Pendance
than some guy who can't get it up. do they still play those Bob comercials?

Bob's product isn't for "getting it up" (that's Levitra & Viagra). Bob is advertising a "natural male enhancement" - That's why all the references to "big" in the commercial, and why Bob always has a big grin.

It used to be that you only got penis enlargement ads thru email spams - but now you can see it on TV.

My 72 year old mother called me from Florida and complained about all the penis enlargement emails she keeps getting. She says, "I don't even have one!".

150 posted on 03/21/2006 5:25:45 AM PST by Tokra (I think I'll retire to Bedlam.)
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To: Indy Pendance

Bump for later. FReeping by Blackberry is a slow process.


151 posted on 03/21/2006 5:31:06 AM PST by Professional Engineer ( Happy patron saint of Engineers day! Beertender, green pocket protectors for everyone.)
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To: SnuffaBolshevik

SF was about $85 cheaper every 6 months for me.


152 posted on 03/21/2006 5:35:54 AM PST by steve8714 (Burn Peugeot, burn.)
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To: ChildOfThe60s
Nobody seems to mind that men are charged more than women because they are more expensive to cover for car insurance. But women are more expensive for health insurance and its illegal to charge more for them.
153 posted on 03/21/2006 5:36:23 AM PST by poinq
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To: JABBERBONK
They also run so many stupid radio commercials. They are annoying for the most part. Just like the Einstein Brothers Bagel commercials. They have to be stupid, because that is the only way the libs in Austin will buy them.
154 posted on 03/21/2006 5:36:43 AM PST by Arrowhead1952 (Don't mess with Texas.)
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To: mathprof
…resulting in discrimination against minorities and lower-income people.

I’ve been with GEICO for several decades and have had no complaints. While I am low income (retired Army), I’m not yet a minority.
155 posted on 03/21/2006 5:40:06 AM PST by R. Scott (Humanity i love you because when you're hard up you pawn your Intelligence to buy a drink.)
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To: jigsaw
Hillary in a thong?


156 posted on 03/21/2006 5:45:43 AM PST by R. Scott (Humanity i love you because when you're hard up you pawn your Intelligence to buy a drink.)
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To: Spirochete
GEICO (others perhaps) use you credit score as well, which has nothing to do with driving habits.

Most likely, people with high credit scores are more likely to pay middling damages out of pocket rather than submit claims (because they have the resources to do so, and because they understand that it's cheaper in the long run to avoid the resulting rate increase).

157 posted on 03/21/2006 5:48:30 AM PST by steve-b (A desire not to butt into other people's business is eighty percent of all human wisdom)
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To: Lonesome in Massachussets
"My program may have an opening in Colorado Springs, I'd like to see if I could shoehorn my way in. (I think I could convince my daughter to move.)

Colorado Springs is a beautiful location, but don't count on paying a whole lot less for your car insurance. Colorado has some of the highest insurance rates in the nation because Colorado also has the highest percentage of uninsured motorists on the road. The last number I heard reported was that 3 in 10 drivers on the road in CO do not have insurance. When we moved from CO to Nebraska, we cut our auto insurance premiums almost in half and we increased our coverage slightly.

We've also been GEICO customers for over 18 years and we've never had a problem. Excellent help when someone else hit us, courteous service on the phone, and now we can do most anything online ourselves. We just bought a newer vehicle (out of state) and I went online and added it to our policy, took off the old vehicle, and printed out my coverage for a temp proof of insurance while driving home. We're pretty happy with GEICO. At least they're not jacking our rates every six months like clockwork (even with no tickets or accidents) like State Farm did when we had them.

158 posted on 03/21/2006 5:53:02 AM PST by Pablo64 ("Everything I say is fully substantiated by my own opinion.")
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To: mathprof
The article is inflammatory without describing how Geico evaluated the risk.

There are generally three scoring systems, application, behavioral and predictive. The last time I looked the most advanced algorithms were "genetically" engineering. That is a high falutin way of say they are constant self-learning, changing algorithms based on curent experience and adding and eliminating factors for a best fit. While I don't know what Geico uses, in this day and age Geico should easily be able to demonstrate their innocence. The political blackmail is a different story.
159 posted on 03/21/2006 5:59:37 AM PST by School of Rational Thought (Republican - The thinking people's party)
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To: poinq

In view of how our society views men, that all seems entirely logical (to the left).

Discrimination selectively applied by the chosen is not discrimination. It's payback.


160 posted on 03/21/2006 6:04:16 AM PST by ChildOfThe60s
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