Geico's Risk Criteria Challenged
Auto insurer Geico uses drivers' levels of education and occupations in setting insurance rates, according to an internal company memo cited by both the Consumer Federation of America and a competitor. As a result, CFA argued, blue-collar workers with relatively low levels of education sometimes are charged almost twice as much as better-educated professionals, based on those criteria.
"No single criterion is ever used to determine a customer's rate," Geico said in a statement late yesterday. "Persons of all educational levels and occupations are offered insurance at our best rate based on a variety of criteria. Income or race based criteria never has a role in underwriting or pricing. These allegations are patently false and intentionally divisive."
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