Economists remain fixated on the enormous gaps in income and wealth that have been forged over time. Compounding the seriousness of the issue are circumstances under which the lower one’s income, the more one pays for a particular service – take auto insurance as an example.
According to a new analysis of online auto insurance quotes by the Consumer Federation of America, factors like renting rather than owning a home, holding just a highly diploma and working an hourly wage job can produce substantially higher costs for car insurance.
As reported by the New York Times, insurers do not explicitly use income as a factor in setting rates, but companies often consider socioeconomic factors like education and occupation that serve as surrogates for income.
The new report indicates that as a result, a blue collar worker with a clean driving record pays an average of fifty nine percent more than a white collar worker with a similar record. That percentage difference translates into nearly $700 a year.
In order to generate its findings, the study’s authors sought online quotes for basic liability insurance for four hypothetical drivers in fifteen cities from the websites of five major insures, including GEICO, Progressive, Allstate, Farmers and State Farm.
