Why no insurance is worse than a minor wreckCarInsurance.com consumer analyst Penny Gusner notes that a lapse in coverage carries much more weight than a relatively minor accident. The $800 tally for the better-educated driver's accident is low enough to fall below many insurers' threshold for a rate increase, she says, but “a lapse in coverage is a big no-no.” There may be benign reasons for a gap, such as a military deployment, she says, but insurers tend to look at the dark side.
“If you don't have insurance, it usually means you were canceled for non-payment or non-renewed because your driving record took a nasty turn.”The CFA report also took the insurers -- Allstate, Farmers, Geico, Progressive and State Farm -- to task for the huge variance in rates between cities. Allstate, for example, would charge the same driver $850 in St. Louis but $3,292 in Baltimore. A CarInsurance.com study last year found an even greater disparity, with the same driver paying as little as $730 for full coverage in Bullhead City, Ariz., and $4,214 in Highland Park, Mich. (You can see how rates for full coverage vary around the country with the site's Nosy Neighbor tool.) In 35 of the 60 cases studied, the insurers either quoted annual premiums in excess of $1,000 or refused to quote a price. “Unfortunately, the discriminatory practices of auto insurers mainly harm low- and moderate-income drivers,” noted Stephen Brobeck, CFA executive director. The group praised State Farm for offering lower rates to the safer driver every time. “If they can be a successful company without using highly discriminatory factors, other large companies should be able to do so as well,” says CFA's Hunter.