Consumer group says many auto insurance rates unfair

The fact is, insurance companies take many things into consideration when setting individual rates. The Consumer Federation of America (CFA) says some of them aren’t fair to consumers and the group will lobby for reform.

CFA has seized on a new report by, illustrating how living in a particular ZIP code can affect what you pay for auto insurance. The report notes you can get vastly different quotes from the same insurance company at two addresses a relatively short distance apart but in different ZIP codes…

CFA says it has researched the cost of auto insurance and its impact on low to moderate income consumers. It concludes that in many low-income communities across the country, good drivers have access to few or no policies that cost less than $500 per year, which meets the standard of a reasonable price for basic insurance coverage…

Price optimization is another way insurance companies set rates, and it is a practice that California is also targeting. Price optimization is a technique by which insurance companies measure the shopping habits of its customers in order to set individual premiums as high as possible regardless of a customer’s risk profile…

Did you know that married people get lower rates than singles?  Because the insurance industry has decided that a driver who is married is less of a risk than one who is single.  Not only do married people get more tax deductions, they pay less for car insurance.

4 thoughts on “Consumer group says many auto insurance rates unfair

    • Maybe because there are more single drivers than married? Or maybe because singles drive more than married people? And do you really believe the “statistics” created by the insurance industry? I don’t even think the formula for creating them is published because it’s protected and confidential.

      Liked by 1 person

      • It is by percentage, and it the actuary tables (at least on that) are public record since they have to be approved by state insurance commissioners. I had a property/casualty license at one point but never got really into it and decided against it because some of the tactics were so shady. Cancelling after no-fault accidents, credit-based rates, etc… One of the other issues is that young men are charged more than young women, but the accident rates are the same…young men just file more claims.

        Liked by 1 person

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