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.