Action 9

Action 9: Hidden factors that can raise car insurance rates

ORLANDO, Fla. — Action 9 exposed why many drivers have high car insurance premiums despite having perfect driving records.

Drivers who don't have a diploma or a high credit score could pay hundreds of dollars extra to be insured.

Action 9's Todd Ulrich went shopping for insurance to show how industry secrets can drive up drivers' premiums.

Driver Latrice Glenn Golding's most recent car insurance premium packed a punch.

"I'm not happy about it at all, and I'm not sure why it's going up," Golding said.

Driver Brianna Guevarra said she has also experienced a premium spike despite having a safe driving record.

"I've never been in an accident, never had a ticket, so I don't know why it's going up," Guevarra said.

Consumer advocates said insurance rate formulas are kept private and that college degrees or credit scores may affect premiums more than driving records.

"It's been the best-kept secret in the insurance industry for sure," said Jeff Blyskal, editor of Consumer Reports. "This can work against consumers, and they don't even know it."

Four Central Florida drivers helped Action 9 test the insurance premium formula.

While seeking quotes for auto insurance, Ulrich kept the drivers' age, home address and driving histories the same, but he increased their education level to a master's degree, gave each person a promotion and changed the credit scores from good to exceptional.

The new quote to insure Golding's Chrysler 300 was $250 cheaper.

Two other volunteers would have their premiums reduced by $300, indicating that education and credit score are more significant in determining insurance rates than driving records.

"I would feel that's not fair,” driver Ossie Johnson said.

A Consumer Reports study found that in Florida, bad credit scores drive up premiums far more than dangerous driving records.

"It was significantly more punishing to have a poor credit score than a DWI, which doesn't make sense," Blyskal said.

The insurance industry said that it's justified in factoring in drivers' education level, occupation and credit scores because some groups are riskier drivers and file more claims.

"I'm not sure where the spike is coming from," Golding said. "It has to be hidden."

Florida's insurance commissioner asked the state Legislature to ban premium scoring that uses education and employment as factors, but that attempt failed.

Not all insurance companies use those factors and credit scores. It can be beneficial to shop around.