That lizard's mighty cute, but does he earn six figures?
Yesterday, the Consumer Federation of America charged that Geico Corp. uses customers' educational backgrounds and career information as criteria in setting auto insurance rates. According to the CFA, Geico has utilized rating methods and underwriting guidelines in 44 states that are directly tied to education and occupation.
Geico responded that the charge was "an offensive attempt to link fundamentally fair and actuarially sound industry practices with invidious discrimination." However, Robert Hunter, the CFA's director of insurance, said that under Geico's rating method, "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."
The CFA also said that other insurers, including Liberty Mutual and Allstate, were starting to use Geico's methods, and it asked the National Association of Insurance Commissioners to intervene.