Poor drivers pay more for car insurance

Lower-income drivers should not have to pay more for car insurance, says a director of a national consumer group, but an official at Connecticut’s insurance department says that the higher prices many insurance companies charge these drivers are justifiable.

A report released Monday by the Consumer Federation of America took aim at insurers for using income and education levels when determining car insurance rates.

The report said GEICO charges a plant worker in Hartford with a high school degree 40 percent more for basic annual coverage than it does a plant supervisor with a college degree. Liberty Mutual charges a Connecticut high school graduate premiums that are 10 percent higher than those of a college graduate, the report said.

“Low- and moderate-income people should not have to pay more,” said J. Robert Hunter, director of insurance for the consumer group.

But George Bradner, head of the property and casualty division at the Connecticut Department of Insurance, called the use of education and occupation in rating a policy “actuarially justified,” and said it is one of several criteria insurers use to determine the riskiness of a driver.

“There’s age, how long you’ve been employed, where you live, your marital status … there’s a whole bunch of factors,” Bradner said.

Nevertheless, Hunter said state insurance commissioners should forbid insurance companies from using income, education or occupation when they establish pol- icy premiums. The CFA said the practice is discriminatory because lower-income and less educated drivers are more likely to be nonwhite.

But not all insurers use education and/or occupation as a rating factor. Hartford-based Travelers Insurance Co. doesn’t. It referred questions to the Insurance Information Institute.

Bob Hartwig, the institute’s president, said insurance companies use different underwriting criteria to compete -- and the use of occupation and education by some companies like GEICO and Progressive is justified. If all companies used the same variables there would be uniform pricing, he said.

“Insurers collect statistics on the characteristics of drivers for one reason and one reason only — as an indication of loss,” Hartwig said.