The Consumer Federation of America (CFA) has recently released a startling press release about homeowners and renters and how this status may affect their auto insurance: the analysis found that auto insurance companies may charge drivers, even “good” drivers, up to 47% more for basic liability auto insurance if they are home-renters rather than owners. It also found that premiums for renters average about 7% higher (around $112 more per year) than for owners.
As this disproportionately affects middle- and lower middle-class people who may be more likely to rent homes than own them, the CFA’s Insurance Director was quoted as saying, “To raise people’s auto insurance premiums simply because they can’t afford to buy their homes unfairly discriminates against lower-income drivers.”
The CFA study found double-digit percentage differences between what auto insurance companies charge homeowners and renters in a number of U.S. cities, including:
– Baltimore, Maryland –¬ 23% more for renters than homeowners (Liberty Mutual)
– Louisville, Kentucky – 47% more (Farmers Insurance Group)
– Newark, New Jersey – 26% more (Liberty Mutual)
– Tampa, Florida – 19% more (Allstate)
Of all U.S. cities in the study, only Chicago was found to have decreased insurance premiums for renters.
The CFA also claims that auto insurance companies use other factors to raise drivers’ premiums and some factors seem to outweigh others for no credible reason; some drivers who have good credit scores and blue-collar jobs but no marriage or college degree, for example, may still pay more than those who are married with a college degree or bad credit score.
The correlations are unclear, and while we are unfortunately required to maintain auto insurance from these companies which use economic and personal factors to raise drivers’ premiums, we are fortunate to learn from ongoing studies and analyses from organizations like the CFA to better hold these companies accountable for unfair practices.
If you or a loved one has been injured in an accident, contact Mike Agruss Law for a free consultation. We are a Chicago-based injury law firm representing individuals (and their families) who have suffered an injury in an accident. We will handle your case quickly and advise you every step of the way, and we will not hesitate to go to trial for you.
Lastly, Mike Agruss Law is not paid attorneys’ fees unless we win your case. Our no-fee promise is that simple. You have nothing to risk when you hire us – only the opportunity to seek justice.
