Now there is an effort to stop GIECO from using their current ratings method, that determines what rate you pay. As it now stands, GEICO underwriting guidelines base their rates and eligibility solely upon someone's education level achieved and their occupation...
This rating method and underwriting guideline have a serious adverse effect on minority consumers and lower income Americans and are unnecessary and unjustified.
According to a recently published (Newark, NJ) Star Ledger article, the GEICO methods of rating and eligibility, was discovered to charge a janitor without a four-year college degree in Newark, NJ over 70 percent more than an attorney with a graduate degree. Nationally, the average "surcharge" being applied by GEICO for those who are categorized by GEICO as "blue collar workers" with less education is over 40 percent.
According to a recently published (Newark, NJ) Star Ledger article, the GEICO methods of rating and eligibility, was discovered to charge a janitor without a four-year college degree in Newark, NJ over 70 percent more than an attorney with a graduate degree. Nationally, the average "surcharge" being applied by GEICO for those who are categorized by GEICO as "blue collar workers" with less education is over 40 percent.
ssiero1 says:
05:32 PM, 03/22/06
Why would the risk be higher for someone with less income or less education? I know there has to be some sort of baseline way to measure risk but this seems unethical; I couldn't do business this way.
jerrywimer says:
05:24 AM, 03/23/06
That actually seems backwards based on the driving I've seen. Usually the ones in the biggest hurry make the most money, most likely because they're aggressive overachievers. :D
ateixeira says:
11:44 AM, 03/23/06
Yeah, because rich celebrities like Lindsay Lohan drive so safely!
billt9 says:
01:06 AM, 03/24/06
I don't think Lindsay Lohan has a high education... with all her time spent <beep>
billt9 says:
01:11 AM, 03/24/06
Unless this practice is illegal, this seems consistent to an extent with any insurance company. Many companies have discounts for A+ students.
A business can choose which audience it wants to cater to, such as luxury hotels, or upscale retail chains do.
However, I think it is unethical for them to not notify the general public that blue collar workers will most likely not receive a good rate. Somewhere in their TV ad should be a tag line hinting at their target audience.