Posts Tagged ‘More’
Study: Poor pay more for auto insurance
February 3rd, 2012
Troy Anderson
A 30-year-old man with an MBA and a perfect driving record who lives in the fairly well-off suburb of Richmond Heights, Mo., pays $ 558 a year for auto insurance. But in a lower-income part of the St. Louis area, a 30-year-old man who’s an unemployed high school graduate and has gone without auto insurance at some point pays $ 2,095 for the same coverage.
The near quadrupling in that policy’s cost — based on factors unrelated to driving behavior — highlights the unfair, discriminatory treatment that low- and moderate-income drivers encounter when buying auto insurance, according to a study conducted by the Consumer Federation of America.
Geography, credit rating come into play
The study, “Lower-Income Households and the Auto Insurance Marketplace: Challenges and Opportunities,” found lower-income Americans pay higher auto insurance premiums because insurers use rating factors such as a driver’s geographical location, occupation, education and credit rating.
“Many low- and moderate-income drivers, because of largely uncontrollable factors, pay a higher price for auto insurance, even if they have maintained a perfect driving record and drive relatively few miles,” says Stephen Brobeck, co-author of the study and executive director of the nonprofit Consumer Federation of America.
However, Jim Whittle, chief claims counsel at the American Insurance Association, a trade group, disputes the study’s findings. He says there are perfectly legitimate reasons why some people pay more for auto insurance than others.
“So, for example, where a person lives could be relevant,” Whittle says. “They could be living in a place where there is a high incidence of property crimes against automobiles. Since insurers have to pay for that, that is built into the rates. They could be living in a place with a higher density of automobiles, thereby increasing the likelihood of potential vehicle accidents. There could be a whole array of reasons why their insurance costs more.”
Poor drivers face annual tab exceeding $ 1,000
The study, which focused on American households with annual income below $ 40,000, found many lower-income people who need to work are put at an economic disadvantage by high auto insurance costs. For most of these families, easy access to a car greatly increases economic opportunities.
In 2010, lower-income vehicle owners spent an average of $ 823 a year on auto insurance, the study found. But in some areas, many responsible, lower-income drivers had to spend more than $ 1,000 a year just for basic liability coverage that is “often unfairly priced and provides no real insurance protection for them,” Brobeck says.
In some cases, the cost of insurance exceeds the cost of the vehicle itself, Brobeck says. Given these costs, Brobeck says it’s no wonder that 25 percent to 30 percent of low-income drivers are uninsured.
Consumer advocate presses state regulators
The Consumer Federation of America proposes several ways for state insurance regulators to “sensibly” reduce the cost of auto insurance.
Study co-author Robert Hunter, director of insurance at the consumer group, says state insurance regulators should evaluate the fairness of rates charged to lower-income families in an effort to cut down on costs and discriminatory treatment.
“It is urgent that state insurance commissions act to eliminate disparate treatment,” Hunter says. “If there is one priority that insurance commissioners should address, it is to lower rates for liability coverage required by state law for those driving inexpensive cars.”
Forty-nine states and the District of Columbia require drivers to purchase basic liability insurance. Only New Hampshire and Iowa do not mandate that coverage.
Industry: Recommendations would bump up costs
Paul Blume, senior vice president of state government relations at the Property Casualty Insurers Association of America trade group, says the consumer group’s proposed solutions would be counterproductive and would hurt lower-income motorists.
“While we agree that low minimum liability coverage requirements would produce lower costs for some consumers, the CFA’s other recommendations would make insurance more expensive,” Blume says. “The CFA has the flawed impression that over-regulation will keep insurance rates down. Ultimately, overly restrictive laws and regulations have been shown time and again to reduce consumer choice and inhibit market innovations.”
Robert Hartwig, president of the industry-backed Insurance Information Institute, finds fault with the study’s findings. He points out that the study comes just a few weeks after a report by the National Association of Insurance Commissioners showed the typical motorist saw his or her auto insurance costs drop every year between 2005 and 2009.
“As anyone who watches television commercials knows, auto insurance coverage is widely available in every U.S. state,” Hartwig says. “And competitive marketplaces drive down prices. Car owners have a multitude of choices when it comes to buying coverage as well as a variety of ways to obtain it: through an agent, over the phone or online. Drivers should shop around if they feel as though their current auto insurer is not meeting their needs, or charging too high of a price.”
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January 27th, 2012
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Health insurance should be more like car insurance, you pick the coverages and the deductibles to meet your?
January 26th, 2012
Question by mission_viejo_california: Health insurance should be more like car insurance, you pick the coverages and the deductibles to meet your?
The health-care debate has centered on the uninsured. That so many people do not have health insurance is a consequence of foolish government policies: regulations that raise the price of insurance, and a tax code that ensures that most people get their insurance through their employer. If you don’t work for a company that provides health insurance, you’re out of luck. People locked out of the insurance system still have access to health care. But they often end up in emergency rooms because they did not receive preventive care.
For most people, however, it is another aspect of our employer-based health-care system that causes the most trouble: the insecurity it creates. People worry that if they switch jobs, they will lose their health insurance. They worry that their company will cut back on health benefits. Universal coverage is not necessary to address these worries. Making it possible for individuals to own their health-insurance policies themselves, rather than getting them through their companies, would solve the problem. It would also reduce the political momentum behind socialized medicine.
Best answer:
Answer by 51
you want your health insurance to go down? Call you congress man or woman and tell them to boot the free loaders from south of the border
Know better? Leave your own answer in the comments!
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January 22nd, 2012
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January 18th, 2012
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January 17th, 2012
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January 15th, 2012
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