Association Between Income and Insurance Rates

The Consumer Federation of America (CFA) recently performed an experiment on the five largest car insurance companies on the market, trying to figure out whether or not there is a correlation between income and the premium offered by a car insurance company.  The CFA created to fictional car owners with the same background except for accident history, education level, and employment.  One person was created to be a wealthy executive with a master's degree and the other was a high school receptionist with only a high school education level.  The executive had been credited with causing an accident and the receptionist was accident free.  However, 66% of the time, a lower premium was granted to the accident-prone executive over the safe-driving high school receptionist.  When TIME: Business and Money published this report about a week ago, their intent was to prove to the reader the bias and "corruption" in the car insurance industry.  Theoretically, the person with a lower chance of getting in an accident should get the lower premium.  However, this is not the case.  This article may have also been written to enrage the general population and to call for a change.  The author hints at state legislature frequently throughout the article and implies that it is just for a state or county to pass laws prohibiting the use of non-driving factors in granting car insurance premiums.  The middle and lower classes were probably targeted in this report, as they would be the ones that are most frustrated with the results of the experiment.  In order to prove his point, the author cleverly includes a picture of a crashed luxury vehicle at the top of the article.  This emphasizes the point made in the article that wealthier people are not necessarily the safest drivers.  In addition, the author uses hard data and statistics to back up his assertions on car insurance companies.  Quotations are only included for the side that is doing the experiment, not for the car companies themselves.  This has the effect of only showing the side that the author wants to, thus biasing the reader towards his point of view.

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