Auto Insurer Group Misuses Consumer Spending Statistics, Then Slanders Low-Income Americans
Targeted News Service |
In a recent press release, the
What's far worse, however, is that NAMIC badly misuses these statistics. In using aggregate CES data, NAMIC lumps together all low-income households (those in the bottom income quintile). But the fact is that, according to more detailed CES data that NAMIC apparently has not consulted, in a typical quarter (three months) of 2012, only 19 percent of low-income households spent any money on cigarettes while only 22 percent spent any money on alcoholic beverages.
"NAMIC has slandered a large majority of low-income Americans by implying that they spent more on cigarettes and alcohol than on auto insurance when in fact they spent nothing at all on these two products," said
In numerous studies released during the past two years, CFA has concluded that, because most auto insurers are not interested in serving most low- and moderate-income drivers who wish to purchase only the liability coverage required by state law, the insurers often charge these drivers high prices that explicitly discriminate on the basis of factors such as occupation, income, and credit score which represent proxies for income. CFA's research, using the websites of major insurers, assumes that the drivers whose policies are priced have perfect driving records - no accidents and no moving violations ever.
A far more accurate picture of low-income household expenditures, than the one painted by NAMIC, is as follows: A relatively small minority of low-income households spend a great deal of money - typically more than
However, that is only a small percentage of low-income Americans. As to the large majority, about four-fifths of low- and moderate-income households - those in the bottom two income quintiles with annual incomes below about
"Research has conclusively shown that, because of the sprawling nature of urban areas, most low- and moderate-income Americans need a car to get to work," said
[Category: Consumer Services]
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