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Group: Geico Insurance Rates 'Very Unfair'
reuters ^ | 3/20/06

Posted on 03/20/2006 5:25:49 PM PST by mathprof

A leading U.S. consumer group Monday accused Geico Corp. of using consumers' education backgrounds and occupations as criteria in setting auto insurance rates, resulting in discrimination against minorities and lower-income people.

The Consumer Federation of America (CFA) charged that the No. 4 U.S. auto insurer, has adopted rating methods and underwriting guidelines in 44 states that directly tie rates to education and occupation.

Geico, a unit of Berkshire Hathaway Inc. (BRK), the insurance and investment company controlled by billionaire Warren Buffett, rejected the charges. It called them "an offensive attempt to link fundamentally fair and actuarially sound industry practices with invidious discrimination."

The insurer provides auto insurance to more than 6 million policyholders, and insures more than 10 million vehicles.

Robert Hunter, the CFA's director of insurance and a former Texas insurance commissioner, called Geico's rate-setting policies an "underwriting sleight-of-hand" that can shortchange thousands of drivers.

Under Geico's guidelines, he said, a New Orleans factory worker without a high school education would pay $2,636 for insurance, 91 percent more the $1,382 that a white-collar worker with a graduate degree would pay for the same vehicle and location.

(Excerpt) Read more at foxnews.com ...


TOPICS: Culture/Society; News/Current Events; US: Virginia
KEYWORDS: berkshirehathaway; geico; redlining
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I guess this explains the "good news" about my auto insurance savings when I switched to GEICO last year (I have a PhD).
1 posted on 03/20/2006 5:25:51 PM PST by mathprof
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To: mathprof

Stupid people can't compare rates.


2 posted on 03/20/2006 5:27:03 PM PST by Indy Pendance
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To: mathprof
Their commercials are enough to keep me from switching.

Besides, my good neighbor agent has taken good care of me for the past dozen years or so.
3 posted on 03/20/2006 5:27:49 PM PST by birbear (You know what? This is crap. We're going to stop this.)
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To: birbear
Their commercials are some of the wittiest, it's not saying alot, but compared to the pharm industry, I'd rather watch a lizard in make believe than some guy who can't get it up. do they still play those Bob comercials?
4 posted on 03/20/2006 5:30:22 PM PST by Indy Pendance
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To: mathprof

"Unfair" would be forcing everyone the pay the same rate, despite differences in risk.


5 posted on 03/20/2006 5:30:29 PM PST by mc6809e
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To: mathprof
GEICO'S rates are so "unfair" I saved $3500 on my auto insurance.

I had Farmers(?) Insurance.

6 posted on 03/20/2006 5:30:37 PM PST by Liberator
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To: birbear

The new gecko commercials are wretched. I liked the originals, kind of.


7 posted on 03/20/2006 5:31:13 PM PST by Cyclopean Squid (History is a work in progress)
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To: mathprof

Anybody that would sign up for Auto Insurance from a lisping British Gecko deserves the rate they get!


8 posted on 03/20/2006 5:31:14 PM PST by rocksblues (John McCain says adopt a terrorist today!)
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To: mathprof
A leading U.S. consumer group Monday accused Geico Corp. of using consumers' education backgrounds and occupations as criteria in setting auto insurance rates, resulting in discrimination against minorities and lower-income people.

I have no idea if they do this but I do know that when we retired and moved back to Pennsylvania from Virginia we called Geico for a rate. We then called Allstate, Progressive and State Farm. Allstate was the cheapest for the same coverage on all quotes.

9 posted on 03/20/2006 5:31:24 PM PST by Dustbunny (Even if you're on the right track, you'll get run over if you just sit there. - Will Rogers)
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To: mathprof

Geico is not licensed in Massachusetts.


10 posted on 03/20/2006 5:31:59 PM PST by Maceman (Fake but accurate -- and now double-sourced)
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To: mathprof

Stupid people should be charged more for everything.


11 posted on 03/20/2006 5:32:13 PM PST by Redcloak (<--- Not always a people person.)
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To: mc6809e
No ****. (hypothetically) I drive good, live in a rural area, am over 40, you have 3 dui's, under 25, live in the city and are looking for a personal injury attorney.
12 posted on 03/20/2006 5:32:40 PM PST by Indy Pendance
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If they don't like Geico's rates they should buy from another carrier. But then they'd miss all the fun of being a "victim."


13 posted on 03/20/2006 5:32:41 PM PST by clintonh8r (If you don't support the mission you don't support the troops. Period.)
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To: mathprof

I don't believe this. I saved a ton with Geico! (and I am an idiot)


14 posted on 03/20/2006 5:33:02 PM PST by Kokojmudd (Outsource GM to a Red State! Put Walmart in charge of all Federal agencies!)
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To: mathprof

Saved almost 400 dollars a year and a bit more coverage to boot.

No complaints so far.

I'm a plumber so I suppose that's why I get a lower rate too.


15 posted on 03/20/2006 5:33:22 PM PST by headstamp (Nothing lasts forever, Unless it does.)
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To: clintonh8r

As witnessed so far on this thread. Some 'conservatives' don't know the meaning of capitalism.


16 posted on 03/20/2006 5:33:55 PM PST by Indy Pendance
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To: Redcloak

I guess this includes those twits over at DU :)


17 posted on 03/20/2006 5:33:56 PM PST by fhlh (Polls are for Strippers.)
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To: birbear

I don't care if their commercials have Barbara Mikulski playing a tuba dressed in a thong. Their rates are hundreds of dollars lower than the " good neighbor's".


18 posted on 03/20/2006 5:34:21 PM PST by SnuffaBolshevik
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To: mathprof

In the PRM (P. R. of Massachusetts) we are forced to buy from a limited number of mostly in-state insurers. Low risk drivers like me subsidize high risk drivers, but the issue is far too politically charged for anyone to touch it.


19 posted on 03/20/2006 5:34:40 PM PST by Lonesome in Massachussets (NYT Headline: 'Protocols of the Learned Elders of CBS: Fake But Accurate, Experts Say.')
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To: mathprof

Are you calling me a liar?

20 posted on 03/20/2006 5:34:42 PM PST by Clemenza (I Just Wasn't Made for These Times)
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To: Lonesome in Massachussets

Ever think of moving? Mass is as big as some counties in other states.


21 posted on 03/20/2006 5:35:55 PM PST by Indy Pendance
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To: Redcloak
Stupid people should be charged more for everything.

LOL. Actually, they usually are. Well, in the sense that they usually pay more because they are stupid.

What about me? How much of a discount do I receive because I am potty trained?

22 posted on 03/20/2006 5:36:04 PM PST by ChildOfThe60s
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To: mathprof
In other words, raise rates on some so others will pay less. And some people still think its about a free lunch. Amazing!

(Denny Crane: "I Don't Want To Socialize With A Pinko Liberal Democrat Commie. Say What You Like About Republicans. We Stick To Our Convictions. Even When We Know We're Dead Wrong.")

23 posted on 03/20/2006 5:37:00 PM PST by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives On In My Heart Forever)
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To: Lonesome in Massachussets

At least in the PRM you can buy wine and have it shipped to your door.

If I try to do this in PRMd (P.R. of Maryland) I'm a felon!


24 posted on 03/20/2006 5:37:23 PM PST by mathprof
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To: mathprof

What crime would I be commiting IF I LIED about my education on a Geico application?

I doubt that they can verify your education claims.


25 posted on 03/20/2006 5:37:24 PM PST by George from New England
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To: mathprof

Now I find out the rates are cheap and service good for professionals -- I will take it! :)

Have been with GEICO for years (exception of one year) -- love the service received including when someone ran a stop sign and plowed right into the side of my car. When Farmer's was the family insurance and my son was hit by someone who ran a red light, they told us to deal with the moron's insurance company out of Tulsa. Took forever to get it settled unlike when I was hit and GEICO went after the insurance company of the person who hit me including medical for a shoulder injury. One year with Farmers and went back to GEICO.


26 posted on 03/20/2006 5:38:21 PM PST by PhiKapMom (Elect Bob Sullivan OK Governor -- Throw out Dem Gov DoLittle Henry in 2006!)
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To: Cyclopean Squid

I can't stand the latest batch. I have a hard time understanding anything with that absymall accent.

I will admit, the ones with the cavemen are kinda funny.

But they try so hard to be "entertaining" with their commercials, that I wonder how their service would be if I ever need to file a claim. Frankly, if I ever need to file a claim, I want some actuary guy with a slide rule and a pocket protector telling me how much I'm going to get, rather than have some stupid lizard trying to do a song and dance, giving me free pie and chips.

And what the hell is/are "pie and chips"?


27 posted on 03/20/2006 5:38:28 PM PST by birbear (You know what? This is crap. We're going to stop this.)
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To: Cyclopean Squid
"The new gecko commercials are wretched. "

C'mon mate. they're made from scratch, just for you.

28 posted on 03/20/2006 5:38:47 PM PST by isrul
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To: Cyclopean Squid

I have hated gekcos ever since my TDY at Anderson AFB, Guam. You wake up with the critters on you and everything else. Oh, and I'm happy with CSAA.


29 posted on 03/20/2006 5:39:13 PM PST by afnamvet
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To: mathprof

What's not to like about free pie and chips? It's pie...and chips...for free!

USAA has been fine to me.


30 posted on 03/20/2006 5:39:54 PM PST by Per-Ling
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To: birbear

I was hit by a driver that had Geico.

I have to say they paid $4500 for my car repairs, check was here before work was finished.

On a rental, I got Geico to give me more than my own insurance company would have provided. 3 weeks at that too.


31 posted on 03/20/2006 5:41:37 PM PST by George from New England
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To: Redcloak
Stupid people should be charged more for everything.

No kidding. I saved a bunch of money by comparing my insurance with the rates Geico had, and stayed with my previous insurance company.

32 posted on 03/20/2006 5:43:11 PM PST by Arrowhead1952 (Don't mess with Texas.)
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To: Redcloak
Stupid people should be charged more for everything.

Higher education is not a measure of intelligence.

33 posted on 03/20/2006 5:43:54 PM PST by holymoly (Dick DeVos for MI Governor: http://www.devosforgovernor.com/)
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To: birbear
Well, so far I had a towing job for my truck and didn't call Gieco for an approved towing operator, called a local guy instead.

Called Geico about it and they said, no problem just send us a copy of the towing bill and we'll send you out a check right away.

Week and a half later had the check for $85 in my hand.

All contact done through the Internet also BTW.

So far so good.
34 posted on 03/20/2006 5:44:02 PM PST by headstamp (Nothing lasts forever, Unless it does.)
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To: birbear
Frankly, if I ever need to file a claim, I want some actuary guy with a slide rule and a pocket protector telling me how much I'm going to get, rather than have some stupid lizard trying to do a song and dance, giving me free pie and chips.

C'mon, bear. Put the bong away. Do you actually think when you go to a GEICO claims office, there's a gekko serving pie and chips? They have the requisite number of geeks with slide rules, just like any other insurer.

35 posted on 03/20/2006 5:44:41 PM PST by SnuffaBolshevik
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To: afnamvet
I have hated gekcos ever since my TDY at Anderson AFB, Guam.

I've done that exact gig. Weird to wake up and see 'em staring down at you from the ceiling.

36 posted on 03/20/2006 5:44:56 PM PST by Hank Rearden (Never allow anyone who could only get a government "job" attempt to tell you how to run your life.)
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To: mathprof

I'm waiting for Reuters to do a hitpiece on Progressive, run by the multi-millionaire socialist. Won't happen.


37 posted on 03/20/2006 5:45:24 PM PST by manic4organic (We won. Get over it.)
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To: SnuffaBolshevik
...a tuba dressed in a thong...

You speak'n of Hillary?

38 posted on 03/20/2006 5:45:24 PM PST by jigsaw (God Bless Our Troops.)
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To: Indy Pendance

I think of moving all the time. I'd have to get my daughter (and grandson) to go along.

I've been with the same company for 23 years and it's hard to consider starting over. If I move to New Hampshire, I'd pay higher real estate taxes and the same Mass. Income taxes. No place else is within commuting distance.

My program may have an opening in Colorado Springs, I'd like to see if I could shoehorn my way in. (I think I could convince my daughter to move.)


39 posted on 03/20/2006 5:45:31 PM PST by Lonesome in Massachussets (NYT Headline: 'Protocols of the Learned Elders of CBS: Fake But Accurate, Experts Say.')
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To: birbear
"And what the hell is/are "pie and chips"?"

I think you could find them in cow pasture.

40 posted on 03/20/2006 5:45:57 PM PST by Buddy B (MSgt Retired-USAF)
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To: mathprof

This is how they pay for their excellent television commercials.


41 posted on 03/20/2006 5:46:19 PM PST by Clintonfatigued (Bob Taft for Impeachment)
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To: holymoly

No, of course it isn't; but, demonstrably stupid people should be charged more for everything. Think of it as a penalty for what they inflict upon the rest of us.


42 posted on 03/20/2006 5:46:22 PM PST by Redcloak (<--- Not always a people person.)
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To: SnuffaBolshevik

You wouldn't know it by watching their commercials.


43 posted on 03/20/2006 5:46:37 PM PST by birbear (You know what? This is crap. We're going to stop this.)
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To: Liberator

I've got Farmer's for my personal and business Workers Comp/Liablity. Great rates and when I had to file a small claim, great service. Use to have State Farm. YMMV


44 posted on 03/20/2006 5:48:40 PM PST by Wheee The People
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To: mathprof

Considering GEICO's roots, I seriously doubt there is any movement within it to discriminate against races or education levels....

it probably has more to do with the skills of the driver.


45 posted on 03/20/2006 5:48:54 PM PST by MikefromOhio (aka MikeinIraq)
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To: mathprof

I live in Hollywood and am insured with Mercury.

I have been told while shopping around, that no other area is as bad with the exception of Compton. I am under the impression that rates are determined by crime stats here in CA.

And, yes, my lovely new sportscar was stolen some years ago in front of my BF's house.


46 posted on 03/20/2006 5:48:58 PM PST by BunnySlippers
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To: headstamp
I'm also a plumber, living on the coast in North Carolina. I had the opposite experience with GEICO. I saved $285 by switching from GEICO to State Farm.
47 posted on 03/20/2006 5:49:27 PM PST by SunTzuWu (Hans Delbruck - Scientist and Saint.)
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To: Cyclopean Squid; birbear

I liked the caveman series but this new "colloquial Aussie" crap is making me want to have a brick through the TV. I hate them!


48 posted on 03/20/2006 5:49:34 PM PST by T Minus Four
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To: Indy Pendance

Saw a t shirt the other day: "You Can't Cure Stupid".

IF the underwriters have GENUINE actuarial evidence that drivers with more education cost less, then what can you say?

It is no different than saying that drivers with fewer speeding tickets have fewer claims (assuming it can be backed up with real numbers). When I was in HS they offered good student discounts based on the stats that showed better grades were correlated with fewer claims.

My complaint with insurance companies is that they often claim to be fact what they think to be true. Or they claim to be fact what they believe will be accepted. But my primary complaint with insurance companies is that too many of them consider contracts to be one-way streets. You pay - maybe they do and maybe they don't.


49 posted on 03/20/2006 5:49:59 PM PST by ChildOfThe60s
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To: birbear
"And what the hell is/are "pie and chips"?"

You know, its like pie, and chips.

I guess that means a moldy chocolate pie and stale dill pickle potato chips to dip in it ?

My guess would be that its a British thing, Steak and kidney pie, and their chips are like our freedom fries.
50 posted on 03/20/2006 5:53:50 PM PST by Beagle8U (An "Earth First" kinda guy ( when we finish logging here, we'll start on the other planets.)
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