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Column
Geico gives different rates for drivers depending on their jobs
The meek may inherit the earth, but the well-educated professional executive will get a far better deal on his auto insurance.
By ROBERT TRIGAUX
Published February 12, 2007
The meek may inherit the earth, but the well-educated professional executive will get a far better deal on his auto insurance. It seems some insurance companies think drivers with lots of schooling and high-level business jobs deserve sharply cheaper quotes on their auto coverage than the poor guy who never graduated high school and works as a janitor. Consider this quote comparison from Geico on Friday. You can do it yourself at www.geico.com, but some other insurers offer similar disparities. Online, I filled out Geico's application seeking personal information. In this case, I was "Bob" - a fictitious 50-year-old single man with a Ph.D. and a job as a computer executive seeking coverage on my four-door, 2002 Toyota Camry sedan. Bob's quote: $331.36 per six months of coverage. Then I went back online as "Joe" - this time as a 50-year-old single man who did not graduate from high school who has a janitor's job, seeking the same exact coverage for my four-door, 2002 Toyota Camry sedan. Joe's quote: $551.76, every six months, about 66 percent higher. That's a striking $220.40 difference per bill, or $440.80 more per year for Joe the janitor than Bob the Ph.D. computer exec. In each case, Bob and Joe indicated online to Geico they had the same lack of accidents in the past five years and both had been insured more than nine years with Allstate. Joe could be the world's safest driver, but his occupation and level of education combined in this case to make his life far more expensive than Bob's. Is it fair to zing the less-educated and lower-income driver? Or is it discrimination? Florida insurance regulators are worried that the practice of charging the less educated higher prices falls disproportionately on minorities. In Tallahassee on Friday, state insurance officials held a public hearing over the use of occupation and education as factors in pricing insurance. Geico, Liberty Mutual and AIG were the focus of the hearing. "Many of our minority or low- income residents are beginning to work their way up the economic ladder," Florida Insurance Commissioner Kevin McCarty said. "We do not want to make that climb tougher by penalizing these citizens due to their place on that ladder." Geico says it considers many factors in setting rates, from age and gender to accident history and vehicle type, as well as job and education. That fails to explain how Bob and Joe - pretty much the same person except for occupation and education - are priced a whopping $220.40 apart. Robert Trigaux can be reached at trigaux@sptimes.com or 727 893-8405.
[Last modified February 9, 2007, 23:53:38]
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by Mary Ann
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04/10/07 01:08 PM
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My advice is to get a petition going on this and perhaps a class action suit by those who have suffered this discrinination. I am sending this to my Senators and representatives.
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by Ray Lopez
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03/19/07 09:03 AM
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Nice columns, keep up the good work. You are the Man in the Street (with a tie).
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by Mike
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02/22/07 11:32 PM
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What this article does not say is that they use credit as the #1 risk factor. Why? It works and Geico is the fasting growing insurance company in the US. If there to dumb to graduate high school do you really want them driving your kids to school?
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by Mike
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02/22/07 11:27 PM
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It sounds evil and unfair but the same could be said for charging more because I'm male vs female. Or I'm 23 instead of 50, a company like Geico has very smart people who've figured out in the past 70 years that this works. Dumb people make mistakes
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by Bill
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02/14/07 08:15 AM
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Who should price GEICO's product; journalist's, regulators, or the person responsible for paying the claims?
The St Pete Times sets your salary and the rates charged advertisers. They "zing" the lesser educated help, and the low volume advertiser.
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by Bill
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02/13/07 03:17 PM
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I have a similar problem with Am Family. They said my credit score didn't earn me their best rate. As my credit score is 788, I asked how hi it had to be to get the best rate but never got a straight answer.
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by Denise
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02/13/07 12:13 PM
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How can this be? There has to be more to it, like accidents, not because of the occupation. a 20,000 dollar car no matter what you do should be the same, unless you are high risk. Come on people wake-up.
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by Angelina
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02/12/07 11:48 PM
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I had the same experience, but with Progressive and it was related to my credit score. How do they figure that your credit score affects your driving? It's absolutely ridiculous, and just a way to get more money out of safe drivers.
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by jim
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02/12/07 08:41 PM
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this is insurance profiling. many other reputable ins compnaies do not use this criteria in setting rates. geico needs to address this issue in all states. how unfair. prep cook in rockville
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by Jill
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02/12/07 12:15 PM
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State Farm uses credit scoring and it is not accurate at all. One house can have four different rates and no accidents. Poor people pay more since scores lower and rich with accidents pay less. I know, I work for State Farm and am afraid to tell.
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by Rick
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02/12/07 10:49 AM
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Thank you for exposing this disgusting practice. Credit based scoring is also rampant and has nothing to do with how safely one can drive. Is repulsive they can make huge profits at the expense of those least able to afford it. Keep it up, find more.
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by lou
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02/12/07 10:48 AM
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several years ago the Times had front page article on speeding noting that that a tampa resident who was a V.P.with Bank Of America made the trip from his home to downtown St Pete in 25 minutes routinely driving at speeds of 85mph on interstate 275.
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by David
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02/12/07 10:39 AM
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And if they gave up on the annoying advertising blitz, maybe they could drop proces a bit also.
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by Witheld
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02/12/07 08:38 AM
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I use gieco and assumed that was the case long ago. I elevated the education credentials on myself and my spouse. This is info that they can't just pull up on line, you actually have the upper hand on this one. One day they will ask for proof.
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