Minor Thoughts from me to you

Actuarial Policy

Geico is being sued because of their actuarial policy:

A leading U.S. consumer group Monday accused Geico Corp. of using consumers' education backgrounds and occupations as criteria in setting auto insurance rates, resulting in discrimination against minorities and lower-income people.

Geico, a unit of Berkshire Hathaway Inc., the insurance and investment company controlled by billionaire Warren Buffett, rejected the charges. It called them "an offensive attempt to link fundamentally fair and actuarially sound industry practices with invidious discrimination."

"There is clearly a disparate impact on minorities and lower income people," Hunter said in an interview. "If it isn't violative of the law, it should be. It strikes me as very unfair."

Life is unfair. Get over it. From an insurance and statistical standpoint, people with college degrees (and graduate degrees) probably are safer drivers. Therefore, it's cheaper to insure them. Geico, thankfully, passes that savings along to the driver. If you want to complain about it, first prove that -- on average -- a person with a high school degree drives just as safely as a person with a graduate degree.

Bringing charges of racism into the picture is growing increasingly tacky. It just reeks of an attitude of "I don't have a better argument to make, but I want sympathy anyway".

This entry was tagged. Insurance Racism