The nation’s largest retailer is making inroads into more financial territory with a new auto insurance shopping service. But will it save you money?
A prejudiced system?
Auto insurance premiums are now being set on a discriminatory basis. Both education level and job classification are key to what you pay for insurance.
Of course, those are both factors that have nothing to do with how you drive! Yet the average advanced degree holder will pay less even if they have tickets or at faults than somebody who has a high school diploma and a clean driving record.
NYPIRG put some hard numbers to this. They took a theoretical 30 year old woman and ran her numbers as a bank executive with an advanced degree vs. as a bank teller with a high school diploma. The bank teller profile paid 20% more in premiums on average. When they adjusted her profile from bank teller to working retail, the rates that came back were 40% higher!
But it’s not a monolith; not all insurers are doing this classification and even those who do have big differences in how they factor info about education and occupation into a final premium quote. So shopping your coverage at renewal time becomes key.
I think insurance should be a merit system. Sure, it’s reasonable for age to be factored in — think about the dangers of young drivers (and very old ones) behind the wheel. But over time, whether or not you have claims should determine what you pay. These other things like education and occupation are ridiculous criteria.
Walmart is now selling car insurance
The average Walmart shopper is among those Americans who are really getting beaten up on auto insurance rates. So Walmart is getting in the auto insurance market space with a new shopping platform courtesy of AutoInsurance.com.
This offer is available in Texas, Tennessee, Pennsylvania, Oklahoma, Missouri, Mississippi, Louisiana, and Arkansas with a rollout to the rest of the 50 states coming soon. Walmart claims the average person saved $1,100 a year by shopping through Walmart.com/AutoInsurance.
We’ll see if they really do give you the best deal out there. The whole point is it gives people who were getting clobbered on car insurance a chance to potentially find a better deal.
Meanwhile, Walmart is also testing life insurance in Georgia and South Carolina.
Walmart obviously wants to be a bigger and bigger player in all things financial. Look at their Bluebird banking and Walmart 2 Walmart money transfer service as just two examples.
Yet I’m guessing all these different products don’t amount to a lot of revenue for the company. It’s more about creating a relationship with their shoppers who are otherwise being siphoned off by the dollar stores.
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