You Could Be Paying More for Car Insurance Than Someone with a DUI

You Could Be Paying More for Car Insurance Than Someone with a DUI

When it comes to car insurance, the majority of drivers have one goal in common: to get as much coverage for as little money as possible. If you’re like the majority of Americans, the care you take while driving each day is as much about keeping your monthly premium down as it is about protecting yourself and others on the road.

But what if you found out that your basic assumption about insurance is wrong?

Research Compared Quotes for Moderate and High Income Drivers

A recent study from the Consumer Federation of America revealed a shocking injustice in how drivers’ policies are treated. The study revealed that insurance providers routinely charge higher-income drivers less for the same car insurance policies that middle-income drivers carry.

What’s more, DUI convictions did not affect these differences.

“In 21 of the 30 tests (70%) in which a comparison was possible, a moderate-income driver with a perfect driving record was charged more for basic liability insurance than a high-income driver with a recent DUI conviction. In 20 of 38 tests (53%), moderate-income drivers with clean records were charged more than high-income drivers who recently caused an accident resulting in bodily injury.”

This shady practice was not limited to just one or two regional companies. Five of the major insurance providers in the United States—including Geico, Progressive, Farmers and others—were among the insurance companies found to quote policies by using this double standard.

Paying Insurance Bills

After the CFA announced their findings, most of the big-name insurance companies refused to comment, though James Lynch, vice president of research for the Insurance Information Institute, did answer with the following words:

“Balderdash. Insurers don’t look at your income. They just look at your risk of having an accident.”

The CFA, however, maintained that they had found their results by personally making calls to the various companies using nearly identical personas: female drivers, 30 years old, licensed for 14 years, even driving the same model car with the same estimated number of miles per year.

When they claimed to be a married bank executive who had had the same car insurance coverage for many years, they received a quote that was up to 59 percent lower than the quote offered when they claimed to be a single bank teller who hadn’t had insurance for the past six months.

CFA representative Robert Hunter said that this situation isn’t limited to car insurance. It is common practice for insurance providers to target wealthy customers for all kinds of insurance and forgive their faults in order to market other products to them.

In response, Lynch said that factors such as job, education and marital status are “all very good predictors of whether or not a person is going to be in an accident.”

He added,

“Are insurance companies supposed to ignore information that’s staring them in the face?”

What You Can Do to Save Money on Car Insurance

To be sure you’re getting the best value for your money, it is essential to do your research. A quick and even easy policy sign-up isn’t always better. To paraphrase one insurance company’s popular slogan, an hour of research can save you $100 or more on your car insurance.
To find the most affordable car insurance policy, here are the steps you’ll want to take:

Decide how much coverage you need

This starts with being sure of your state’s requirements for basic coverage. But it’s also worth considering your caution level, the conditions you typically drive under (such as how many miles you drive on a regular basis and the safety of your area’s roads), and even the value of your assets. If you were to get in an accident and found to be at fault, the other driver’s attorneys could go after your assets to cover whatever your insurance policy doesn’t cover.

Gather insurance quotes and company information

Set aside time for this task. While some companies make it easy to get a quote online, some will take your information and get back to you later. Be aware that each insurance quote form is likely to take you about 15 minutes to complete.

Make sure to have the necessary information at hand: your current insurance policy, your driver license number and your vehicle registration. This will expedite your research considerably.
Some of the comparisons you’ll want to make include:

  • Annual and monthly rates for the different types of coverage
  • What kinds of payment plans are available
  • When payments are due and what happens if you are late making a payment

Look for discounts

Along with discounts you expect for having a clean driving record, some car insurance companies give better rates for your car's safety or security equipment, for enrolling in "pay as you drive" plans, or for drivers who purchase other insurance products from the same company (such as home or life insurance policies).

Review your policy before you sign

Before you settle on a provider, read through the policy they’ve sent you carefully for any hidden caveats or conditions on what is covered and when.

Comparing insurance quotes may be a tedious task, but doing so could truly save you hundreds of dollars over the years in premiums and may result in better coverage.

Brian Flood


Brian has dedicated his entire legal career to helping accident victims. By choice, he has never represented the interests of an insurance company.

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