buying Consumer Group Blasts Auto Insurers for Paltry Low-Mileage Discounts

18:26  04 april  2018
18:26  04 april  2018 Source:   moneytalksnews.com

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A national consumer group says people who drive less aren't getting the price breaks they deserve from most of the big auto insurance companies. "The failure of most major insurers to use mileage to help determine prices discriminates against lower -income and older drivers and in doing so also

A national consumer group says people who drive less aren’t getting the price breaks they deserve from most of the big auto insurance companies. “The failure of most major insurers to use mileage to help determine prices discriminates against lower -income and older drivers and in doing so also

If you’re hoping for a car insurance discount because you or someone else on your policy doesn’t drive much, you better shop around.

Recent research by the nonprofit Consumer Federation of American (CFA) shows that while spending less time behind the wheel lessens your odds of getting into a crash, not all major auto insurers offer significant discounts to low-mileage drivers.

On average, folks outside of California save $30 per year, or 1.6 percent, for every 5,000 fewer miles driven. That’s compared with an average savings of $81, or 8.7 percent, in California — which is an exception because its regulations require insurers to charge lower-mileage drivers less.

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Some Major Auto Insurers Provide No Discount to Low - Mileage Drivers. Most Recent Testimony and Comments. Groups Comment on NAIC Auto Study Group “Data Collection”. Consumers Support Use of Mileage in Auto Insurance Pricing, According to National Survey.

A national consumer group says people who drive less aren't getting the price breaks they deserve from most of the big auto insurance companies. "The failure of most major insurers to use mileage to help determine prices discriminates against lower -income and older drivers and in doing so also

Analyzing mileage discounts

For its research, CFA got premium quotes for basic liability coverage in 12 different U.S. cities — one in California, and the rest elsewhere. The quotes were from five large auto insurers:

  • Allstate
  • Farmers
  • Geico
  • Progressive
  • State Farm

The quotes all were for a driver with an unblemished record. So, the only differences between quotes, besides the insurers and the cities, was the number of miles driven per year. Annual mileage varied from 2,500 to 22,500.

How the 5 insurers fared

From one insurer to another, low-mileage discounts vary from nonexistent to double digits.

CFA singled out Farmers and Progressive as being particularly stingy in the 11 non-California cities included in CFA’s analysis:

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Listing Websites about Low Mileage Auto Insurance Discounts . CODES. (2 years ago) Consumer Federation of America says people who drive less aren't getting price breaks they deserve from most big auto insurance a low - mileage discount

Groups Comment on NAIC Auto Study Group “Data Collection”. California is the Exception to Unfair Rates, Where Consumer Protection Rules Require Insurers to Charge Lower - Mileage Drivers Less. While all five companies provide discounts for lower mileage driving in California, the

Progressive and Farmers usually charge the same rates to someone who drives only 2,500 miles a year as they charge someone else who drives 22,500 miles a year — nine times as far — all else being equal.

Geico offers “a small price reduction” for lower-mileage drivers outside California, CFA found. Allstate and State Farm offer average reductions of 11 percent and 13 percent, respectively, outside California.

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CFA argues that car insurance rates should be based more on driving-related factors such as mileage than on socioeconomic factors like your credit score or marital status.

J. Robert Hunter, director of CFA and a former Texas insurance commissioner, notes:

“For people in most parts of the country, with California as the notable exception, you’ll often pay about the same auto insurance premium whether you commute 90 miles round trip every day or if you take public transit to work and only drive on the weekends.”

The great myth about car insurance costs

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Cutting your auto insurance bill might be as simple as asking if you qualify for a better deal. Just 16 percent of consumers have asked their auto insurer for common breaks like low - mileage rates or good-student discounts , according to a new InsuranceQuotes.com survey of 1,000 adults.

CODES. (2 years ago) Consumer Federation of America says people who drive less aren't getting price breaks they deserve from most big auto insurance a low - mileage discount Recently Searched. Low mileage auto insurance discount . Promotional resource group inc.

For its part, Progressive says on its website that it normally does not ask policyholders to report their mileage, but that it does reward low-mileage drivers through its Snapshot program, which monitors driving behavior in exchange for discounted rates.

Farmers says on its website that drivers who limit their time behind the wheel “may therefore enjoy low-mileage discounts.”

Nonetheless, until laws change outside of California, consider this a reminder of the importance of periodically shopping your insurance policies around to confirm you’re getting the best rates for which you can qualify.

What’s your experience with car insurance discounts like low-mileage discounts? Share with us below or on Facebook.

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