According to the Consumer Federation of America (CFA), many major auto insurance companies are charging drivers more money for basic liability insurance if they are not home owners. An analysis of premiums shows that a 30-year old safe driver, pays an average of 7% higher premiums, approx $112/year, if they rent their home. The biggest offender is Liberty Mutual. They penalized renters with premium hikes of 19% or more, approx $307/year, for state mandated auto insurance coverage.
J. Robert Hunter, CFAs Insurance Director and the former Insurance Commissioner of Texas states, To raise peoples auto insurance premium because they cant afford to buy their homes unfairly discriminates against lower-income drivers. A good driver is a good driver whether she rents or owns her home. Insurance companies should not be allowed to target people based on home ownership status.
USA's largest insurers: State Farm, Geico, Allstate, Progressive, Farmers, Liberty Mutual, and Nationwide were the companies that were used in the CFA analysis. Using websites to receive quotes on two premiums in each city for a 30-year old female motorist who has a 2005 Honda Civic and a perfect driving record. The only difference between the two quotes was whether she owned or rented her home.
Although the average increase for renters was 6%, there were some companies that had an a drastically higher increase. Farmers Insurance, for example, charged renters in Louisville, Kentucky 47% more than homeowners for a basic auto insurance policy, that's $768/year!
The only company that did not need home ownership status to provide an auto insurance quote was Geico.
Virtually every state requires drivers to buy insurance, but we shouldnt force them to buy a home in order to get the best price. State Insurance Commissioners and elected representatives should step in and stop this practice, said Hunter.