Thursday, February 14, 2013

'Good drivers' pay more for insurance, study often

'Good drivers' pay more for insurance, study often

By Kraut white tree, today registered users
If you believe that you display, good drivers will receive the best insurance rates. But a new study shows auto insurance companies often good drivers require higher premiums than those who caused an accident recently. And it seems from this research that the safe driver, the more numbers often lower income.

How could this happen?

The Consumer Federation of America (CFA), which conducted the study, says that this reflects a common practice in the insurance industry with factors such as education and profession, interest-rate risk.

A CFA survey in 2012 showed that two-thirds of Americans believed taking into account these factors, but driving story was unfair.

Stephen Brobeck, Executive Director of CFA, this is called a "discriminatory practice", which auslost-prices for low- and moderate-income drivers.

The industry rejects any notion that it will be disadvantaged in any way.

"The policies we offer fair in all respects, are," said Michael Barry, Vice President media relations at the insurance information Institute.

How to measure CFA marketplace
The CFA guidelines for two hypothetical customers price: high school receptionist and Manager. Both women were 30 years old, driven for 10 years had lived on the same street in the same zip code with medium income.

But there were important differences.

The reception is single, rents an apartment. She was never an accident or moving violation, but she was without insurance coverage for 45 days.

The Executive Branch is married to homeowners with a master's degree. Your car insurance policy has never expire. But she had an accident on errors with $800 damage within the last three years.

CFA scientists visited sites of the five largest U.S. car insurance - state farm, Allstate, GEICO, farmers and progressive - in search of the minimum liability coverage required by this State. This was for both women in 12 cities.

As a result, two-thirds of the 60 citations were for the Executive Branch (which had an accident) as for the receptionist (had), less often by at least 25 percent.

The insurance information Institute asks whether the test was fair, because the receptionist had a break in insurance and this could be seen as a risk factor. The Consumer Federation of America says the receptionist had no car for 45 days and therefore needed no insurance. Questions that make your car more risky, they?

Why is this happening?
Insurance companies hold a variety of factors determine the risk they represent and the price they should charge if you apply for an auto policy. All agree that your age, gender, type of vehicle and driving history can help to predict the probability that you will have an accident.

However, insurance underwriters should your education, career, or in some cases, your credit score? What have these social and economic factors, to do with your ability, a safe driver?

"These factors was found, that possibilities be insurance statistically solid risk assessment," said Michael Barry, Vice President media relations at the insurance information Institute. "And before they are ever used, these rating criteria are tested, State insurance regulators who have allowed them."

CFA says it's not fair for someone who get a better rate, simply because they have more education and more income.

"Our concern is that these factors are not proved, There is no logical reason to explain why they should work, '' said Robert Hunter, CFAs Director of insurance and former Texas Insurance Commissioner. "The insurance companies say there is a link, and that's all what you need."

Some insurance companies consider your credit scores now, if you set your premiums. Not too good with Washington State Insurance Commissioner Mike Kreidler, sit, which calls the practice "blatantly unfair" way to assess the risk.

"I think it's terrible," me Kreidler. "Do you use a credit score in this economy? You have people who have no fault ultimately with less quality credit and yet drivers are still responsible. You should not pay more for auto insurance because of that."

Not in the Sunshine state
The California Insurance Department decides what reviews are factors of car insurers car pricing. Education, not to look at work and credit scores.

"We want criteria that have a relationship to the risk of loss," said Joel Laucher, California Deputy Insurance Commissioner for tariff regulation.

"You want something, that is fair and quite intuitive, so that people understand why there was a difference in price." "It should be something the driver can control and realize, how they change their behavior to improve their rate can be."

Massachusetts restricts the use of socio-economic factors for private car insurance.

"A determination was made that to drive insurance an individual car must listen more closely", said Massachusetts Insurance Commissioner Joe Murphy.

The bottom line
There are many insurance companies for your company in the competition. Prices are very different.

A good start is your insurance Department Web site. Find a comparison chart that lists the prices in your area for various hypothetical clients. It is an easy way to see how the different insurance companies to compare, and where you go, would like to receive an offer.

(Find a link to your insurance Department at: National Association of Insurance Commissioners.)

Receive offers from an independent agent who represents several companies or go online and do it yourself sites such as InsWeb, NetQuote, InsuranceHotline, InsuranceQuotes, financial response. Expect no immediate offer from these pages. In most cases you won't find agents be contacted for your company.

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