Our Knoxville car accident lawyers know that insurance companies use many different criteria in setting the cost of insurance policies for drivers. The safety features of the car a person drives, a person’s age, a person’s martial status, a person’s gender, and the driving record of the insurance applicant are all considered when an insurer quotes a policy.
Some factors that most people agree should not be considered, however, include income, education and career status. In June of 2012, 1,010 adult Americans responding to a survey were against insurance companies counting either educational status or occupation in setting insurance rates. In fact, 68 percent of those who responded disagreed with the use of education as a factor and 65 percent felt that insurance companies shouldn’t consider education.
Unfortunately, insurance companies aren’t listening to the public. In fact, a recent study conducted by the Consumer Federation of America has revealed that insurance companies are charging lower income and less educated people significantly more for their car insurance.
Are Lower-Income People Being Priced Out of the Car Insurance Market?
The Consumer Federation of America secured quotes from many of the largest insurance companies in the United States. When obtaining quotes, all variables were kept the same except adjustments were made to career, income and education. The results were startling as there was a vast difference in what educated, higher income professionals were being charged as compared with lower income workers. In fact:
The discrepancy in costs, in other words, was across the board at all insurance companies. The results thus prompted Stephen Broderick, Executive Director of the CFA, to point out that “Auto insurers charge high premiums for minimal coverage to most working people, even those with perfect driving records, who live in urban areas.”
Unfortunately, this pricing practice goes beyond just being unfair to lower-income workers who can least afford to pay high insurance costs. The CFA study report indicated that many low-income people would be forced to make a choice between either paying costs they couldn’t afford for an insurance policy that provided inadequate coverage, or taking the chance to break the law and drive without insurance.
Looking at those two options, we know some are going without insurance. Unfortunately, everyone is hurt by this choice. If the driver were to get into an accident, there would be no insurance to cover his own losses, or any damage or harm he caused to others. In other words, an injured accident victim would not be able to pursue an injury claim to get the money he deserved after the crash. This could leave the accident victim either turning to an uninsured/underinsured policy or forced to pay out of pocket for losses.
If you are hurt in a Knoxville car accident, contact G. Turner Howard III, Attorney at Law at (844) G3-Help-Me or 865-558-8030.
