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 ...
This is how they pay for their excellent television commercials.
No, of course it isn't; but, demonstrably stupid people should be charged more for everything. Think of it as a penalty for what they inflict upon the rest of us.
You wouldn't know it by watching their commercials.
I've got Farmer's for my personal and business Workers Comp/Liablity. Great rates and when I had to file a small claim, great service. Use to have State Farm. YMMV
Considering GEICO's roots, I seriously doubt there is any movement within it to discriminate against races or education levels....
it probably has more to do with the skills of the driver.
I live in Hollywood and am insured with Mercury.
I have been told while shopping around, that no other area is as bad with the exception of Compton. I am under the impression that rates are determined by crime stats here in CA.
And, yes, my lovely new sportscar was stolen some years ago in front of my BF's house.
I liked the caveman series but this new "colloquial Aussie" crap is making me want to have a brick through the TV. I hate them!
Saw a t shirt the other day: "You Can't Cure Stupid".
IF the underwriters have GENUINE actuarial evidence that drivers with more education cost less, then what can you say?
It is no different than saying that drivers with fewer speeding tickets have fewer claims (assuming it can be backed up with real numbers). When I was in HS they offered good student discounts based on the stats that showed better grades were correlated with fewer claims.
My complaint with insurance companies is that they often claim to be fact what they think to be true. Or they claim to be fact what they believe will be accepted. But my primary complaint with insurance companies is that too many of them consider contracts to be one-way streets. You pay - maybe they do and maybe they don't.
I don't know how anyone can stand living on the east (west) coast. It's just my midwest upbringing though. A nice house out here, decent, you can get for 150K, a job, making 60k is reasonable. You don't have the, I'm making 120k a year bragging rights, the traffic, the liberals, but, the value of the midwest has other perks, you can see stars, family, community and such. You might seriously consider it. It'll be a culture shock, I'm sure, but, the benefits outweigh the monitary rewards, even if you're 'just getting by' on 80k a year, that'll be more than enough for you to live good in the midwest.
Cool!
the rates in mass. haven't been the same since that oldsmobile hit the water a few years back.
I didn't save any money by switching to Geico, but I did stay at a Holiday Inn last night.
Instead of getting an engineering degree, I actually considered actuary. I'm glad I chose engineering, it's more mobile a career. (IE, getting into the field for work instead of behind a desk and computers)
Tough to swallow, but that's life. Same reason 17-year old boys have car insurance rates through the roof. Same reason we provide proof of our kids' being on the high school honor roll and college Dean's lists to get discounted rates.
You cannot argue with the statistics. And let's pray that the socialists never get this method of determining insurance rates equalized among EVERYONE. Cuz you and I will pay for it!!! Big time!
$3500 is a LOTTA wood.
What kinda service are YOU getting? Massages and cocktails? ;-)
Yeah,and I'm sick of that stupid lizard too.
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