The Real Deal: Car Insurance Rates Higher for Blue-Collar Drivers?

ALBANY – If you have a college education and you’re a white-collar worker, chances are you’re paying less for your car insurance. A new report shows most blue-collar workers pay higher premiums here in New York, even if they have the same car and driving record as a professional.

Over the last few months, the New York Public Interest Research Group has been collecting online estimates from the largest car insurance providers in the state and researchers say it appears some drivers are getting dinged on premiums simply because of their education level and occupation. “It doesn’t seem to us to be a relevant factor, what matters is what’s your driving record, have you had moving violations, how long have you been a driver, how much experience do you have, those are real criteria that we see as relevant to determining whether or not you’re going to be a risk,” says Russ Haven of NYPIRG.

Many drivers CBS6 spoke with seem to agree, “I don’t have a college degree but I work as a software engineer and so I think I’m as qualified as someone with a college degree so I think my rate being higher is unfair,” says Jesse Wilson of Albany. Abby Ransay agrees, “I do have a college degree, I do have a white collar job but I don’t necessarily think that’s fair because we’re all working,” she says.

Using the same driver profile: a 30-year old single woman, with a clean driving record looking for quotes on insuring her 2008 Honda Civic, NPIRG found that rates were $65-$200 more if the woman had a high-school diploma and was a bank teller here in Albany versus a bank executive with a college degree. “We think under state insurance law this is either directly a violation to the law or at a minimum it’s more or less a proxy for other things that they can’t use to discriminate like race and ethnicity,” Haven says.

The insurance industry does not believe the underwriting policy is discriminatory. The President of the New York Insurance Association, Ellen Melchionni says, “”these factors are correlated with risk, which is why regulators have allowed the use of education and occupation in determining how much a consumer pays for insurance. Companies are only allowed to use factors that are predictive of loss. Never once does NYPIRG concede that there is not an association with risk. There are more than 60 insurance companies writing auto insurance in New York vying for your business. These companies compete on price and underwriting. New York’s insurance market is vibrant and delivers a great deal of choice to consumers. New York’s residents benefit from choice–there are a range of prices and options. Companies use a variety of underwriting factors to determine the price of a policy, all of which have been approved for use by regulators. Never before in history has the price of auto insurance been more transparent. You can get a multitude of quotes literally within minutes–either through an agent or by contacting a company directly.”

The State Department of Financial Services is currently looking into the polices. Of the larger insurers examined, only State Farm appeared not to use education and occupation to determine rates.

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