Op/Ed: Auto insurance should not be based on occupation

It seems that every other TV commercial is for auto insurance. “Save money on your car insurance by being a safe driver.” “Save here on auto insurance with just a few clicks.”

State law requires us to carry auto insurance. But it doesn’t do enough to require that insurance companies are fair about how they price these policies for us.  

Those savings they promise aren’t as straightforward as the ads make it seem. The different rates you see when you compare companies has more to do with the ways insurance companies evaluate personal lives than what they see on your driving record. The insurers look at a variety of non-driving related factors to decide which customers pay more.

You could be a safe driver -- never had a DUI, an accident, or even a ticket -- but because you rode your bike this summer and opted out of using your car or needing insurance, you will pay over $500 more this year. Just because of a lapse in you insurance coverage. That’s what I found when I sought a quote from Progressive’s website. On the other hand, if a customer without a break in coverage reported a DUI, Progressive’s increase was only $36 for the year. Is a person with a coverage lapse 14 times more dangerous than someone convicted of driving under the influence? It’s not just summer cyclists who pay hundreds more despite a clean record; servicemembers returning from deployment, people who don’t insure because a car is broken down for awhile, and, yes, drivers who let insurance lapse when they couldn’t afford it one month also pay more.

But let’s say you’ve never had a lapse in coverage and have been buying insurance as long as you’ve been driving, without fail. Even as a perfect driver, you can pay significantly more for coverage because of your occupation and education level. Geico charges cashiers with high-school diplomas $300 per year more than investment bankers with bachelor’s degrees. Are there special driving classes for investment bankers? Teachers with bachelor’s pay less than cashiers but more than bankers.

Some companies don’t supersize your insurance premium just because you’ve got a blue collar job or didn’t get an MBA; instead they might slap massive surcharges on good drivers’ premiums if they don’t have an excellent credit score. Consumer Reports noted that average Montanans with clean driving records and “excellent” credit pay $903 per year but $1,157 if their credit is merely “good,” with “poor” credit costing a person $2,589, even though they have the exact same driving record.

Auto insurance is not something we want to think about, despite the incessant commercials trying to grab our attention. We buy it because we have to, and we hope to never need it. Since our state’s lawmakers require that we buy these policies, they, along with Montana’s insurance commissioner, should insist that the companies at least price us fairly. Is it too much to ask that auto insurance companies price us based on how we drive and not what they think about our personal lives?