According to a study done by CNNmoney, the poor are being charge more on car insurance according to studies. The consumer watchdog group claims, “Owners in inner cities and disadvantaged are getting charged more for coverage on their vehicles”

Earlier this year a report was released by the Consumer Federation of America claiming that most of the large insurance carriers are putting in systems and methods to charge more for auto insurance to moderate to low income families. Many families that live in suburban more affluent neighborhoods are paying far less on auto insurance

A 100 auto insurance pricing methods were analyzed and studies were done to come to this conclusion. Insurers are using factors such as: education, credit history, age, where a person works and lives to come up with premium pricing. In 50 states it is illegal to base rates on income. However, the factors that are being used are a creative way to a possible customer’s income. In fact, The CFA is claiming that these sly methods are a backdoor way of using income as well. Not to mention, the study found that low income drivers are paying more for a premium with less coverage then the average middle to upper class citizen.

"In some areas, many responsible lower-income drivers are required to spend more than $1000 a year for liability coverage that is often unfairly priced and provides no real insurance protection to them," said CFA Executive Director Stephen Brobeck.

All the large Insurance companies are denying all claims regarding income based premiums.

The president of the Insurance Institute claimed, "Your premium is based on how likely you are to get in an accident and how much that accident will cost."


Many argue that premium pricing is higher because inner cities have a better chance of claims being filled due to congestion and more drivers on the road at any given time. However, more inner city drivers are found to use public transportation more and driver less frequently, decreasing their odds of an accident. In fact the life span of a car in the inner city is longer and has fewer miles over time due to the frequency of use.

Not to mention, more DUI’s per capita are found to be in suburban areas and more SR-22s are filed per capita.