“A study, Lower-Income Households and the Auto Insurance Marketplace: Challenges and Opportunities, released today by the Consumer Federation of America (CFA) concludes that the auto insurance marketplace denies important economic opportunities, especially those related to employment, to low- and moderate-income (LMI) households. The study also explains how state insurance regulators could ensure that mandated auto insurance coverage is fairly priced and affordable for these families so that they have greater access to car ownership and jobs. The research, undertaken by CFA Executive Director Stephen Brobeck and Director of Insurance J. Robert Hunter with support from The Ford Foundation, reveals that:

• For the large majority of LMI households, automobile ownership greatly increases economic opportunities, particularly access to jobs.
• These households cannot legally own a car without purchasing auto insurance, whose premiums often exceed $700 and sometimes cost thousands of dollars.
• These premiums reflect not only considerable disparate impacts but also some discriminatory treatment, such as being charged more for less liability coverage when all other factors are held constant.
• In large part because of high costs and disparate impacts, a significant minority — perhaps one-quarter to one-third — of LMI drivers do not carry auto insurance and are driving illegally.
• State-based policies and programs — especially reduced mandatory coverages, programs offering lower premiums to safe drivers, and more vigorous efforts to eliminate disparate treatment and reduce disparate impacts — have the potential to equitably reduce auto insurance costs for responsible LMI drivers.”