Didn’t finish college? You may be paying more for car insurance

Reporter: Lauren Sweeney
Published: Updated:

FORT MYERS, Fla. – What you do, and your education level, could determine how much you pay for car insurance.

The practice has been debated since the Florida Department of Insurance Regulation questioned it in 2004.

“There’s something wrong when the fact that someone who has a four year college degree that lives next door to someone with the same car and same driving record gets to pay half the rate of somebody who doesn’t have a four year college degree,” said Eric Poe, who owns an insurance carrier in New Jersey.

Poe has pushed for state insurance regulators to ban the practice for over a decade, which he admits has made him very unpopular among insurance industry trade groups.

He doesn’t mince words when saying the practice discriminates against lower income people, but despite the state insurance commissioner’s 2008 testimony before Congress in support of banning the practice, Poe has been unsuccessful in his crusade.

Insurance experiment

WINK News enlisted the help of a local bartender to determine how much more money auto insurance carriers could charge less educated, lower income individuals.

Christine Andrews found that when changing her occupation and education to a lawyer instead of a bartender with a high school diploma, her monthly rate quotes from Geico and Progressive dropped.

Her quote from Geico changed by about $6 a month.Progressive’s quote dropped by $15 a month.

“That’s like drastically lower,” she said, “I just don’t understand the justification of pricing somebody based on their occupation and education.”

State Farm and Allstate did not ask about her education or occupation. She was unable to receive an online quote from Nationwide.

State law places the burden on insurance companies to prove the practices used to set rates are “actually supportable.”

‘Very complex process’

There are hundreds of metrics used to set rates, which Kegan Cooksley, owner of Fort Myers based Regency Insurance, described as a “very complex process.”

Cooksley sells insurance for dozens of carriers. About half use occupation and education to determine risk, he said.

“I mean you can look at the whole practice of calculating risk as being discriminatory,” he said. “If you look at the other factors, the driving record, I mean maybe somebody got into an accident that wasn’t their fault. Technically that’s discriminating them.”

A Progressive spokesperson defended the practice, saying it helps make their rates more accurate by predicting who is more likely to be in an automobile accident.

Geico did not respond to an email inquiry.

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