HOUSTON – When you shop around for car insurance, you probably realize your driving record and what you drive will determine how much you’ll pay for coverage. Now, a new study shows some auto insurance companies are charging customers more based on their education level and their job.
Consumer Reports got quotes from eight different insurance companies for a 30-year-old woman with a clean driving record driving a 2016 Toyota Camry LE. When they told some insurers the woman was a college graduate, the rates quoted were lower than the rates quoted for the same hypothetical driver with no college degree.
Which companies are charging more for customers with no college degree
Three companies charged more when the only difference was the lack of a college degree.
- At Geico, the woman with a degree would pay $700 a year for a policy. The same woman with no degree was quoted the same coverage for $815.
- Progressive charged $101 more to the woman with no degree.
- Liberty Mutual quoted a rate that was $62 more for the woman with no degree.
When Consumer Reports used the same hypothetical driver with a clean driving record, but just changed her occupation, they discovered Geico charged a cashier $97 more a year for coverage than an executive. Progressive charged the cashier $31 more than the executive for the same coverage.
What you can do
Consumer Reports is urging state regulators to require insurers to base premiums only on factors that play into the risk of insurance losses those drivers pose behind the wheel. In the meantime, when you shop around for a lower rate, keep in mind the companies that use education level and occupation to set rates. Make sure you get quotes from companies that do not. In its study, Consumer Reports found Allstate, State Farm and Travelers do not ask prospective customers about their job or education levels.
In conjunction with its investigation, Consumer Reports is launching a petition to Geico and Progressive calling on the companies to stop using education level and job title to set auto premiums.