Study critical of insurance rates

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A Consumer Federation of America (CFA) study that was released in September 2012 concluded that most automobile insurance premiums that are quoted for women in some markets are higher because of factors that aren’t relevant to driving, and they discriminate against lower-income women.

The study looked at specific variables, such as whether a woman were single and a renter in a moderate-income area or had as little as a 15-day gap in coverage. The CFA analysis found that rates are up to 50 percent higher than if the woman were married, owned a home in a higher income area, had a college degree and hadn’t had gaps in insurance coverage.  

CFA says premiums should reflect factors over which drivers have control and which affect insurer costs directly. Unsurprisingly, insurers criticized the study. They say nondriving factors affect rates.

Bob Hunter of CFA says CFA will conduct further studies in 2013 and lobby state legislators to regulate premiums more effectively for nondriving factors. That won’t be easy, says Edmund Mierzwinski of U.S. Public Interest Research Group. “But basing rates on nondriving practices is so unfair that if exposed, changes could be made,” he says, particularly if consumer groups can work with labor and civil-rights groups.