May 22--Big auto insurers, including Northbrook-based Allstate, frequently fail to give price breaks to motorists who do relatively little driving, despite a strong correlation between mileage and claims, says a study released Thursday.
The Consumer Federation of America said Farmers, Progressive and Allstate often or always quoted the same annual premium whether a policyholder was driving 5,000 or 20,000 miles annually.
The federation, which is an association of more than 250 nonprofit consumer groups, visited the websites of State Farm, Allstate, Progressive, GEICO and Farmers. It shopped for minimum, state-required liability coverage in 10 cities for a 30-year-old single woman with a perfect driving record.
It compared prices quoted to this driver for both 5,000 and 20,000 miles driven a year. It found that, except in California, which requires auto insurers to use miles driven as a rating factor, three of the five insurers -- Farmers, Progressive and Allstate -- often or always quoted the same annual premium regardless of mileage.
State Farm was the only major insurer that consistently rewarded drivers for low mileage, the study found. In Chicago, for example, the hypothetical State Farm policyholder who drove 5,000 and 20,000 miles would be charged $566 and $654 annually, respectively.
State legislators and regulators should insist that auto insurers use mileage in their rate-making, the federation said. Mileage is a more relevant factor than such factors as education and occupation, which insurers also use to determine rates, it said.
"The failure of most large insurers to adequately reward low mileage especially harms lower income and older drivers because they drive the least," said Stephen Brobeck, federation executive director.
Some major insurers, including Allstate and Progressive, have rolled out programs in which devices or apps are used to track such driving habits as mileage driven, braking patterns and time of day.
The federation said such programs can be used "constructively" but also said there are privacy concerns to be addressed as well as an "overemphasis" on hard braking.
Progressive spokesman Jeff Sibel said the company's data indicate that "mileage in and of itself is not highly correlated with risk of loss."
"Through the 13 billion miles of driving data we've collected from our usage-based insurance program, Snapshot, we know how you drive is more important than how much you drive," he said.
Allstate said it helps its customers get the best product at the right price, including in its Drivewise program, which, like Progressive's Snapshot program, monitors driving behavior through a device or mobile app.
"Through data analysis and information gleaned from our voluntary Drivewise program, we carefully consider the inclusion of numerous factors, including mileage and safe driving behavior, in setting prices and providing savings based on risk and customer preference," spokeswoman Laura Strykowski said.
byerak@tribpub.com
