Consumer group deems Geico's insurance rates unfair

By Hubert Vigilla

Published on March 22, 2006

The accusation arose after an internal document from Geico, the nation's fourth-largest car insurance company, revealed the company's reliance on education and occupation information in setting rates.

The CFA claims that Geico's rating practices result in policyholders with smaller incomes and lower levels of education paying nearly twice as much for car insurance as policyholders who have lager incomes and higher levels of education.

On Monday, Geico issued a statement that addressed the charges. The statement noted that a number of factors are considered when determining insurance rates. The statement continued that allegations that occupation and education are solely responsible for determining rates are "absolutely untrue."

According to the CFA, the group sought insurance quotes from Geico's website for locations all across the country. The group provided information for drivers that were exactly identical save for occupation and education. The CFA claims that the experiment showed the driver with a lower income job and lower level of education was quoted a higher insurance rate in all but six locations nationwide.

From the CFA's findings, the differences in quoted rates reportedly ranged from approximately 11 percent in Chicago to approximately 124 in New Orleans.

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