Renters, who already have their hands full coming up with the rent for their homes, are in for a rude awakening.
On Feb. 8, the Consumer Federation of America (CFA) released the results of a study that discovered that people who rent their homes pay more in auto insurance premiums than those who own. Renters pay as much as 47% more on their auto insurance than those who own homes, according to the report.
The report analyzed data from the 10 leading insurance companies in the country.
For the study, the CFA used the profile of a 30-year old female driver with a ’05 Honda Civic and a spotless driving record. The profile was then used as basis for quotations from the country’s top insurers, with results collected across 10 cities—Baltimore, Chicago, Denver, Houston, Louisville, Newark, Phoenix, Portland (Oregon), Syracuse, and Tampa.
California was left out of the study due to a state order that mandates insurance companies not to consider homeownership when determining premiums.
Based on the data, the CFA found that automobile liability insurance was consistently higher for renters—about 7% on average.
Some cities had it worse than the others. Louisville’s renters got the short end of the stick, paying $768 more than their homeowner counterparts for coverage from
Farmers.
Liberty Mutual was identified as the insurer with the highest premium increases at 19% on average, around $307 annually for basic liability insurance. In Baltimore, for instance, the insurer charged $636 to renters.
Basic automobile liability insurance coverage is mandatory in all states.
The CFA noted that homeownership is not the only non-driving related factor affecting premiums. Things such as credit scores, college degrees, marital status, and even having a job can greatly determine the amount one pays for auto insurance premiums.
Another study by the CFA found that individuals living in certain areas known for high concentrations of people of color pay more.
