Auto Insurance Rating Factors and Their Effect on Different Demographics of Consumers
Auto insurance companies often charge higher premiums to:
- safe drivers who rent their home than those who own;
- single customers than married ones;
- drivers with less education than those with more;
- blue collar workers than white collar professionals; and
- those with lower credit scores.
These socioeconomic factors are not related to driving behavior but instead serve as proxies for income, and indirectly for race. CFA has issued numerous studies showing that auto insurance rating factors tied to individuals’ socioeconomic circumstances raise premiums for lower-income customers with clean driving records. There is a growing body of evidence that these socioeconomic factors, which have nothing to do with driving, also disproportionately harm African Americans and Latinos.
