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Study: Good drivers with lower incomes pay more for insurance than some with DUIs

MEMPHIS, Tenn. -- Most states require drivers to have some type of auto insurance.

Like many consumers, Christy Smith said it's another bill that's pricey to pay.

"Astronomically expensive, and unrealistic in my opinion," said Smith.

A recent study from the Consumer Federation of America revealed that expense is even higher for certain drivers.

The non-profit tested prices with the nation's five largest auto insurers and got quotes for drivers in dozens of cities.

The CFA found a good driving record doesn't always equal lower rates.

In fact, the study showed lower and middle income customers typically paid more even with a clean driving record.

Doug Heller is one of the CFA's insurance experts.

"They''ll charge that perfect driver more for basic auto insurance than an upper income driver who has caused an accident, gotten speeding tickets, or even been convicted of a DUI," explained Heller of what they found in the research.

The study showed a moderate-income Progressive customer in Baltimore pays nearly $900 more than a higher income customer with a DUI.

A GEICO customer in Jersey City pays almost double that of someone with a recent accident.

While the study didn't include Tennessee, Heller conducted some basic tests for the Memphis area and found similar results.

He said, "Our prices should be based on how we drive, not who we are, but if you look at some of these companies, they think its worse to be driving while poor than driving while drunk."

The study showed GEICO and Progressive were the worst offenders, but Heller said not every insurer uses such practices, making it critical for customers to shop around.

The CFA is also advocating for state lawmakers and insurance commissioners to require companies to place a greater emphasis on driver safety, rather than personal characteristics.

WREG reached out to some of the companies mentioned in the study and got a response from a trade association representative.

In an emailed statement, a spokesperson for the Property Casualty Insurers said:

“The CFA’s latest study on auto insurance pricing is flawed and misleading. The central flaw in the report is that it fails to take into account that all the rating and underwriting factors insurers use are proven to increase the accuracy of predicting the risk of loss."

The PCI rep also said the CFA's testing didn't allow for a fair "apples to apples" comparison.

The statement continued, “Consumers should rest assured that auto insurance pricing is closely scrutinized by state insurance regulators and is subject to rigorous actuarial standards which ensure that all rating factors comply with the law."