Post Date February 11, 2013 – Auto insurance industry players are up against the recent car insurance rates study released by the Consumer Federation of America (CFA), saying that their study is flawed. The car insurance rates studied were released by the consumer advocacy group based in Washington D.C. in the last week of January reported that auto insurance companies are charging higher premiums to safe drivers compared to those drivers who had been found responsible or an automobile accident. The consumer group pointed out that expensive car insurance rates being referred to their report is a result of the practice of the insurers to use non-driving-related factors such as the education and occupation of a driver in rating their car insurance rates. Using income-based rating factors is “discriminatory” and “mainly harm low and moderate income motorists. Policymakers ask why insurance companies are being permitted to use the said non-driving related rating factors in calculating car insurance rates.
Unrelated rating data dictates Car Insurance Rates
NAMIC’s vice president for public policy, Robert Detlefsen, belittled the report to be just a “press release.” Detlefsen assailed the report saying that it “erroneously suggests” that the said non-driving related factors used in rating car insurance rates are not predictive of risks. He said that the CFA’s findings are based on “one false assumption” that the only relevant risk rating factors are only those that involved accident history. Progressive Insurance Company, 3rd largest auto insurer in the United States responded to the report saying that they sometimes include non-driving related factors in rating car insurance rates as these factors have been proven to predict a driver’s likelihood of having an accident. Progressive Insurance Company along with other insurers such as Farmers, GEICO and Allstate has been cited by the report to have used the non-driving related factors, specifically the driver’s education and income level.