1 March 2006
The high cost of lizards
Geico, forbidden by New Jersey law to discriminate on the basis of race or ethnicity in its auto-insurance rate structure, has come up with a real winner: collar color.
The Star-Ledger reports that a single male, age 30, from Newark who works as a janitor would pay $2880 per year; were the same man a lawyer, he'd pay $1686.
Geico withdrew from New Jersey in the 1970s, complaining of excessive regulation; it appears that since their return in 2004, they've learned to read the fine print. New Jersey insurance rules apparently permit this sort of pricing if the company can demonstrate correlation between educational level or occupation and loss experience.
To me, this suggests that state insurance regulators ought to look into the possibility of requiring that all risk factors used by a company be disclosed, and the weighting thereof be noted, when requesting a quote; that Newark janitor might well want to take his business elsewhere, if Geico considers him that much of a risk. There would be howls from the boardroom at first, but since when is that a surprise?
(Spotted at Fark and duly marked up 15 percent.)Posted at 10:04 AM to Dyssynergy