ANOTHER BENEFIT OF BUYING
Looking for another reason to buy rather than rent? Most automobile insurers charge drivers with good records as much as 47 percent more for basic liability coverage if they are not homeowners, according to an analysis of premiums by the Consumer Federation of America (CFA).
Based on a sampling of quotes throughout the country, the CFA found that premiums averaged 7 percent higher, or about $112 annually, for a 30-year-old “safe” driver who rents rather than owns. Liberty Mutual was the biggest transgressor, hiking premiums $307 a year on average for state-mandated coverage.
The CFA tested rates for minimum liability coverage in 10 cities from seven of the country’s largest companies. On average, they charged renters 6 percent more. But there were several instances of double-digit increases, including the aforementioned 47 percent in Louisville, Kentucky, by Farmers.
Geico was the only company tested that did not consider home ownership status, and Allstate actually charged renters less in Chicago.
“Insurance companies should judge you on how you drive, not who you are,” said J. Robert Hunter, CFA’s director of insurance and a former Texas insurance commissioner. “Insurance companies are penalizing good drivers by hundreds and sometimes thousands of dollars each year based on economic and social status, and the end result is that the poor pay more, much more.”