The Daily Gazette
The Locally Owned Voice Of The Capital Region

Gazette Editorial

Base insurance rates on driving

Text Size: A | A

Your insurance rates should be determined by how well you drive a car, not a golf ball. But according to a recent survey by the New York Public Interest Research Group, car insurance companies are giving better insurance rates to executives and college grads than to those with nonprofessional jobs and high school diplomas. The resulting difference in premiums was, in some cases, 15 to 25 percent and amounted to hundreds of dollars extra in ...

You Must or Subscribe to Continue
subscribe to the Daily Gazette
Individual stories can be found and purchased from our Archives for $2.00

Enjoy this story? Share it!



April 19, 2014
7:48 a.m.

[ Flag Post ]

The price paid for insurance is based on risk, not the risk that someone will be in an accident, but rather, the risk that an insurance company will have to pay. People with higher education and "big" jobs aren't necessarily better drivers, or less likely to be in an accident. However, they are less likely to file a claim for a loss, electing instead to "eat" the loss, reducing their loss experience, and hence their insurance rates. People with lower disposable income are not equally able to do this, so the insurance company pays more claims for them, and hence they pay higher insurance rates. This is the exact same reason insurance companies look at people's credit reports. With a higher score and lower indebtedness, statistically they will file fewer claims. At face value this appears to be unfair for treating people unequally, but it is merely based on who is a higher risk.