Independent agents and brokers have been fighting a longstanding turf war between a growing number of auto insurance carriers that either sell direct to customers or use captive agents, whether exclusively or in conjunction with independents.
And while the ease of purchase and commoditization of the product have made auto insurance a tough battle to win, a new report from the Consumer Federation of America may give producers some ammo with which to fight.
According to an analysis of more than 80,000 premium quotes from Geico, Progressive,
State Farm,
Allstate and other affiliates, none of these carriers offer a basic auto insurance policy for safe drivers in 50 “large urban regions” for less than $500 per year.
That includes at least one predominantly lower-income zip code area in each region where leading insurers charge more than $500 for basic yearly premiums, and nine total charged more than $500 in all lower-income zip codes.
CFA’s director of financial services, Tom Feltner, said the report raises “important questions as to whether the state-mandated auto insurance is priced fairly and is affordable for many lower-income Americans.”
Feltner noted that many low-income drivers in particular are not able to comparison shop, leaving an opening for independent agents to help members of this demographic find a fair price.
Earlier this year, the CFA published another report demonstrating how blue-collar workers often pay more for their auto insurance than higher-income, white collar workers.
Key findings from the research include:
• Geico would charge 19% more annually for a bank teller with a high school degree than for a bank executive with a college degree ($607 versus $511)—all else being equal. A high school graduate who worked in retail would pay 41% more annually than the same bank executive ($722 versus $511).
• Progressive would also charge 19% more annually for a bank teller with a high school degree than for a bank executive with a college degree.
•
Liberty Mutual did not consider occupation in its underwriting, but did consider education. It would charge a high school graduate 25% more annually than a college graduate ($2169 versus $1730).
