Hi Megan. I enjoy reading your blog. I disagree with you a little bit. The newspaper article is a bit unrealistic. I don't think you will find many cases with that stark of a difference for the following reason. Insurers use many differnt criteria to rate their risks. I can't believe that occupation and education are the top 2 risk classifications. I suspect that driving record, car type, mileage, age, and gender are all really important and that the education and the occupation have marginal (but statistically significant) contributions to the price of insurance. The quotes that were in the paper were likely assuming that all those other factors were held to be the same. Only if that was the case would we would see price differences like the ones shown in the newspaper. In addition, no one has to buy insurance from GEICO. There are other companies and if they provide a better price than GEICO, then people should buy from them. It is a free country and no one is forced to buy insurance from a company that gives a price that is too high compared to the competition.

At long last!

Thanks for your comment—you made a few valid points, the most important of which is that nobody is forced to buy auto insurance from GEICO.

However this points to a larger issue, which is that most people have no idea how insurers determine their rates and/or if their social status (for lack of a better term) has anything to do with their car insurance. I imagine if/when consumers wise up a bit more, these types of issues will become more mainstage and not just the result of a big name (GEICO) making headlines.

Nonetheless, you shed some light on the issue and I thank you for your comment. Hope to see you back soon.

Nobody may be forced to buy auto insurance from them, but their very prominent ads are are enticing ... especially to those who are on a tight budget. I am a school bus driver; hence in the realm of a lower income job. Even though we are considered to be some of the safest drivers we get no credit for this. We are required to have extensive training, take safe driving courses, and have both P & S endorsements on our licenses. Our rates still reflect the higher bracket due to our lesser income. This is totally unfair. Anyone with a CDL should have lower rates. The laws to retain that license are much stricter, we are trained to drive defensively and yet we get no reduction whatsoever. I think it is wrong!

Debby,

Thanks so much for your comment—you make a great point and I'll address it on the blog today.

Also, I think you have a admirable job. I was a school bus kid, and years later, Larry and I still have friendly conversation when we see each other. :)

Geiko sells low cost policies to unwary senior citizens who don't relize that a $5000 liability limit won't pay for hardly any damage to another vehicle. It may be legal but is sure is unethical.

If you think all of the above is horrible, you would not believe some of the practices I have witnessed as a recent former employee. The underwriting of new polices is just the beginning. It is another story when the customers actually have to use GEICO and file a claim. Then there is the pressure they put on the claims adjusters that have to settle the claims.