Tuesday, January 06, 2009

A Tree Wrapper?

Insurance Company Injustice?

file photo, probably having nothing to do with GEICO

Do insurance companies lobby elected officials to make life fair for them, not you?

Are teams of their lawyers out to keep you from what you should receive, legally and ethically?

GEICO seems to have a growing bad reputation, not paying out claims timely, in full, and possibly not at all? Is GEICO spending it profits on CEO perks, advertising, and their own lawyers? Are the customers and victims of personal injuries and lost wages due to accidents further victims because the insurance company responsible for paying, GEICO? Check out complaint # 12, or so, in [this post].

Don't take the abuse, lodge complaints. Complain to elected officials, your state's attorney general, and insurance commissioner.


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Does GEICO have slimy billing and pricing practices? If you aren't an Elite member of society and have a GED or minimum wage job, are you charged more for car insurance? I found the below post, [here]

GEICO Under Fire

March 22nd, 2006 by Megan Mahan

As I’m sure you may have heard, GEICO’s been getting some heat lately due to their practice of using occupation and education level to determine a driver’s insurance rates.

Last week RiskProf posted about a similar situation after a Bill in New Jersey was introduced banning the practice of using occupation and education level to determine premiums.

Prof argues that:

Insurers are going to mine their data to find those variables that are statistically related to higher risk and use this information to discriminate between expected high and low risk drivers. This is legal and this is discrimination. We forget that it makes the better drivers have lower rates.

Prof also equates the occupation/education underwriting to that of charging young males and people with poor driving records more for insurance.

I posted a lengthy comment regarding my feelings on the subject here (sadly, I never got a rebuttal from RiskProf) but the jist of it was that I tend to disagree with companies like GEICO that incorporate these kinds of factors into underwriting.

My opinion goes as such: I agree that bad drivers should pay more for auto insurance and I understand the risks associated with, say, elderly and violation-prone drivers. However, I think companies like GEICO cross a delicate line when they start charging folks with a GED that earn minimum wage more for auto insurance. And (unfortunately,) the current caste system in the United States still finds minorities receiving less education and working lower-paying jobs as a result. Consequently, it appears many of these folks are paying more for car insurance because of their job title rather than their driving history.

But how much more are lower income drivers actually paying?

As I stated to Prof, I recently came across an article in the Star-Ledger (of Newark, NJ) which found that a 30-year old single, male lawyer would pay about $1,690 per year for auto insurance, while a 30-year old single, male janitor (with the same driving record) with a high school diploma would pay over $2,800 per year.

Now that, I just don’t get. I’m sure it works out well for a lot of drivers, but it seems to me that companies like GEICO are squashing the little guys and I’m not cool with that. Come on. We’ve all seen Hoosiers. We all like to root for the little guys, ahem, and gals.

But as much as I disagree with the practice, I know I am but a lowly copywriter and probably look at this issue from a different prespective than an insurance agent. So. Post your comments please, as I’m eager to hear what you all have to say.

[Bonus Links]: I couldn’t find the reprint of the Star-Ledger article, but this recent MSN Money article highlights the findings. CNN Money also has a worthwhile article on the subject (GEICO-related) here.

UPDATE: I was just fowarded this related article from the Motley Fool. Good points. Check it out and get back to me.


Anonymous Anonymous said...

Geico is like any other U.S.A. corporation, they are out to make as much profit as is possible. They don't care who they hurt and what they have to do to make a profit. No one cares and you can just piss up a rope.

Tuesday, January 06, 2009 11:19:00 AM  

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