A new report from the New York Public Interest Research Group (NYPIRG) says several large insurance companies in New York State gave different quotes for the same customer based on the level of education and job they listed on the application. NYPIRG says on average, Geico and Progressive charged a bank teller with a high school education 19% more than a bank executive with a college degree. NYPIRG says Liberty Mutual charged customers with only a high school education 25% more than college graduates.
The practice is legal in New York State but many people view it as unfair. Roberta Williams from Syracuse said the idea of charging people more for insurance because they did not go to college is ridiculous.
"What does your education have to do with your ability to drive? Most truck drivers and professional drivers don't have high levels of education and they are the best drivers," said Williams.
NYPIRG says insurers are putting an additional burden on lower income New Yorkers who can least afford to pay higher rates.
"What we're saying is car insurance rates should be based on how you drive, not who you are," said Julia White from NYPIRG's Syracuse office.
In a statement to CNYCentral, assistant general counsel Jim Whittle from The American Insurance Association said "the use of factors such as continuity of coverage, location of the vehicle, credit-based insurance scoring, driver experience, education and occupation helps insurers to more accurately price risk."
Not all companies use all available data. State Farm and several smaller insurers do not change rates based on education or occupation. Tim Dodge from the Independent Insurance Agents and Brokers of New York says it is a good reminder for customers to shop around.
"It points out the benefits of getting multiple quotes whenever you are shopping for car insurance because different companies are going to look at different things," says Dodge.
Roberta Williams said insurers should be prohibited from charging drivers more because they did not choose to go to college.
"Maybe I'll make out well with it. I have a doctorate - but that's not nice. It has nothing to do with somebody's ability to drive" said Williams.
NYPIRG is asking New York State regulators to reconsider allowing insurance companies to use education and occupation as factors for determining auto insurance rates.