January 31, 2012
By: Bruce Berry
After a report from the Consumer Federation of America claimed that auto insurance companies were unfairly discriminating against lower-income borrowers, the Insurance Information Institute contested the study, saying the competition between insurers drives down costs.
The III cited data from the National Association of Insurance Commissioners which found that the average auto insurance premium had dropped to $785 in its most recent report. In addition, the III says the percentage of family income spent on insurance has also slipped.
"Car owners have a multitude of choices when it comes to buying coverage as well as a variety of ways to obtain it: through an agent, over the phone or online," said Dr. Robert Hartwig, an economist and president of the III. "Drivers should shop around if they feel as though their current auto insurer is not meeting their needs, or charging too high a price."
Hartwig said it would be easier for insurers to lower prices if authorities were better able to reduce the cost of insurance fraud.
In its report, the CFA said many lower-income households drive without insurance because they can't afford coverage. It called on state officials to reduce the auto insurance burden on safe drivers and insurance companies to increase efforts to market to lower-income drivers.
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