Car Insurance Rates Are Increasing For Low-Income Families
More and more citizens notice that car insurance rates are increasing in an alarmingly pace. But those who suffer the most are those who already learn little. A recent study shows that premiums are higher by 59 percent, or $681 per year, for those of lower income and economic status. If you are financially struggled and you want to get cheaper premiums, you should shop online and get online auto insurance quotes.
The Consumer Federation of America verified the minimum limits liability premiums given online to men and women in 15 cities, from five of the nation’s largest auto insurance providers — GEICO, Progressive, Allstate, Farmers and State Farm.
Five factors were analyzed for their effect on insurance costs: education level, occupation, homeownership status, current possession of auto insurance and marital status. The study used hypothetic buyers who were all 30 years old, licensed for 14 years, had no accidents or violations, drove a 2006 Toyota Camry and an annual mileage of 10,000 miles. The same home address was used for each city.
The study discovered that even with the same driving record and address, those who had a high school degree and a blue-collar or hourly job, rented their home and were unmarried faced higher premiums 92 percent of the time. They pay with about 20 percent paying more than double that of their higher-status counterparts. It also found that the average premium for drivers of high economic status is $1,144 and for those withlow economic status pay $1,825 a year.
“Insurance companies are penalizing good drivers by hundreds and sometimes thousands of dollars each year based on economic and social status, and the end result is that the poor pay more, much more,” said J. Robert Hunter, CFA’s director of insurance, in the press release.
The study also revealed that GEICO and Progressive charged the largest average percentage increases (92 percent for the former and 80 percent for the latter) to drivers of lower economic status, while Allstate and Farmers charged the largest average annual dollar increases ($915 for the former and $900 for the latter).
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