Education Level, Data Mining and Your Insurance Rates

An article out of The Wall Street Journal recently reported on the disturbing news about what education level and data mining have to do with insurance rates. As it turns out, data mining and education level have quite an impact on what you’re paying for car insurance each month. Insurance corporations can actually use data to determine what customers are willing to put up with price hikes, whether they can afford it or not. The Wall Street Journal also found that auto insurance customers are being charged more for reasons that have nothing to do with driving ability or history, like their highest level of education attained.

The Low Down on Data Mining

Data mining means corporations can more effectively deliver services and goods to their customers, right? Unfortunately, this isn’t exactly the case where some very well-known insurance corporations are involved. According to the Consumer Federation of America, auto insurance companies are trying to maximize profits by analyzing data to find out which customers will tolerate repeated price hikes. These customers are likely way too busy to shop around for deals every six months or a year to get the best rate for their car insurance. This practice is known as “price optimization,” which might more accurately be called price gouging.

What About Education Level?

Your level of education, which has nothing to do with your driving ability, also impacts what you pay for car insurance. Two people who are purchasing the exact same coverage can expect two very different premium prices based on their education level or employment position. The New York Public Interest Research Group found that less-educate drivers and those with non-professional, non-managerial jobs can expect to pay an extra $1,000 in premiums.

Why You’re Not Always “in Good Hands”

Although big-budget advertising campaigns and feel-good commercials may give you a false sense of security when dealing with your insurance company, it’s important to remember that large insurance company executives are always looking out for their own bottom lines. At the end of the day, increasing shareholder profits is the goal. Many well-known big-name insurance companies made the American Association for Justice’s list for the Ten Worst Insurance Companies in AmericaHow They Raise Premiums, Deny Claims, and Refuse Insurance to Those Who Need it Most. If you think your insurance company is acting in bad faith, contact the experienced team at the Altman Legal Group at 800-772-0828 for a free consultation today.

Comments

comments