Study shows education plays a major role in auto insurance premiums
Tony Dejak, ASSOCIATED PRESS
Typically, car insurance premiums are thought to reflect one's driving record. Those who have a history of wrecks and tickets pay more, clean-record drivers pay less.
A story that ran on Marketwatch Wednesday morning shows, however, that insurance prices for drivers are often based on less obvious indicators, such as education.
White-collar professionals with a college degree typically pay up to 45 percent less for auto insurance than blue-collar workers who only graduated from high school, Marketwatch’s Charles Passy reports.
Passy got his numbers from a new study by the Consumer Federation of America and quotes their executive director, Stephen Brobeck, as saying such a standard “doesn’t pass any smell test.”
This isn’t the first time insurers have received criticism for letting “non-driving-related” indicators inform coverage.
Passy also reports that in 2012, three Democratic congressmen fought against the use of credit scores in determining auto insurance prices.
In response to the criticisms, the insurance industry claims that studies have shown there to be a “statistical correlation between education and employment and the number and dollar value of auto claims filed.”