Peach Tree Times

The Consumer Federation of America (CFA), a non-profit organization dedicated to advocating for consumer interests, has released a report indicating that low-income drivers often pay more for car insurance than their higher income counterparts. In Georgia, drivers can expect their car insurance rates to increase by an average of 16% in 2024.

According to the report authored by Douglas Heller, CFA's Director of Insurance, and Michael DeLong, a Research and Advocacy Associate at CFA, auto insurance providers often use customers' credit scores as a determinant for insurance rates. As a result, Americans with lower incomes frequently pay more for coverage. The report highlighted that low-income individuals "disproportionately" tend to have lower credit scores than wealthier individuals due to various factors.

The research further revealed that many insurance providers deem a consumer's credit score as more crucial than the individual's driving record when determining costs. This could potentially have a greater impact on a driver's premium than any other factor. In analyzing insurance premium data from the ten largest insurers across the country, CFA found that consumers with fair or poor credit pay "significantly" more than drivers with excellent credit. For instance, in Georgia, drivers with excellent credit pay an average of $535 for an auto insurance premium, those with fair credit pay $749, and drivers with poor credit pay $1,047. In this example provided by CFA, all three consumers have "spotless" driving records.

According to City-Data.com, in 2022, 12.7% of Georgia residents had an income below the poverty level, while in Atlanta, this figure was 20.2%.

A separate report from ValuePenguin anticipates that drivers in Georgia will face car insurance rate increases above the national average this year. In its "State of Auto Insurance in 2024" report, ValuePenguin predicted that car insurance rates will increase by an average of 12.6% nationwide, while in Georgia, the rates could surge by 16%. The report suggests that drivers in Georgia should brace for some of the highest car insurance rate increases in the country, compared to those expected in other states.

Founded in 1968, CFA is engaged in education, research, and advocacy with the goal of advancing consumer interests. According to its website, over 250 non-profits are part of CFA.