{"id":1014,"date":"2014-04-28T16:04:00","date_gmt":"2014-04-28T20:04:00","guid":{"rendered":"http:\/\/www.nypirg.org\/capitolperspective\/?p=1014"},"modified":"2015-05-12T06:46:02","modified_gmt":"2015-05-12T10:46:02","slug":"put-the-brakes-on-unfair-auto-insurance-practices","status":"publish","type":"post","link":"https:\/\/www.nypirg.org\/capitolperspective\/put-the-brakes-on-unfair-auto-insurance-practices\/","title":{"rendered":"Put the Brakes on Unfair Auto Insurance Practices"},"content":{"rendered":"

A recent report by the New York Public Interest Research Group (NYPIRG) took a close look at how companies weigh some of the non-driving related factors when they provide price quotes to consumers.\u00a0 What NYPIRG found was startling.\u00a0 All else being\u00a0equal, for three of the top five insurers in New\u00a0York, a low wage worker with a high school degree could pay anywhere from 19%-41% more<\/em> than a college educated professional for the exact same coverage<\/em>.<\/p>\n

That\u2019s correct:\u00a0 the auto insurance rates charged to a high school educated bank teller were higher than those for a banking executive with a college degree \u2013 even when they had the exact same driving records.<\/p>\n

Is that fair?<\/p>\n

To most people, these factors tend to say more about\u00a0who you are than how you drive<\/em>, which raises serious concerns about the unfair impacts of their use on some groups of drivers.\u00a0 \u00a0For example, according to recent Census\u00a0data, African-Americans and Latinos are significantly less likely than Whites\u00a0to obtain a college degree.\u00a0 U.S. Department of Labor data shows similar trends in the workplace, where African-Americans and Latinos are less likely to have professional or managerial jobs.<\/p>\n

While intentional discrimination by insurers based on race and ethnicity is outlawed, more subtle forms of bias may persist.\u00a0 Regardless of motivation, the use\u00a0of non-driving\u00a0factors that correlate so strongly with race and ethnicity raises troubling questions about a harmful disparate impact on our most vulnerable communities, just as “redlining” out certain neighborhoods from banking or insurance did decades ago.\u00a0 This practice may be compounded since not only can insurers get more money\u00a0out of blue-collar workers \u2013 not matter what race or ethnicity \u2013 but they can also lure upper-income drivers\u2014who are more likely to insure multiple cars and\u00a0bundle their auto coverage with homeowners and life insurance\u2014with ostensible discounts.<\/p>\n

Discounts that are, in part,generated with higher premiums on those with lower incomes.<\/p>\n

Research shows that\u00a0owning a car greatly increases economic opportunities,such as access to jobs for low- and moderate-income households.\u00a0 Yet in New York, where car insurance prices are among the most expensive in the nation, even the most bare-bones policy can nab a significant portion of a low-income family\u2019s annual income. \u00a0Since drivers must purchase auto insurance if they want to drive, it\u2019s only right that regulators\u00a0require insurance companies to set prices fairly, affordably and transparently.<\/p>\n

The good news is that it appears auto insurers don\u2019t need to consider these factors in order to remain profitable and make rates more affordable for consumers.\u00a0 The NYPIRG analysis showed that State Farm, the nation\u2019s largest automobile insurer and the third largest writer of car insurance premiums in New York, does not consider education level or occupation when setting rates.\u00a0 And in California, where\u00a0insurers are required to emphasize driving-related factors like driving record, annual mileage, and years of driving experience above all other factors, the insurance market is not only profitable, but low-income drivers with good driving records qualify for a low-cost insurance program, and all other drivers have seen average\u00a0expenditures go down over the last 25 years.<\/p>\n

Insurance regulators in New York and across the nation must review their practices to ensure that rates are based on fair indicators \u2013 like a driver\u2019s actual record \u2013 and that using education and employment as factors should be impermissible.<\/p>\n

When lawmakers arrive in Albany to start up the second half of the legislative session, they should ensure that irrelevant factors are not used in auto insurance rates.<\/p>\n

That\u2019s all for now.\u00a0 I\u2019ll be keeping an eye on the Capitol and will talk to you again<\/p>\n","protected":false},"excerpt":{"rendered":"

A recent report by the New York Public Interest Research Group (NYPIRG) took a close look at how companies weigh some of the non-driving related factors when they provide price quotes to consumers.\u00a0 What NYPIRG found was startling.\u00a0 All else being\u00a0equal, for three of the top five insurers in New\u00a0York, a low wage worker with […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[73],"class_list":["post-1014","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-auto-insurance"],"_links":{"self":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts\/1014","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/comments?post=1014"}],"version-history":[{"count":3,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts\/1014\/revisions"}],"predecessor-version":[{"id":1476,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/posts\/1014\/revisions\/1476"}],"wp:attachment":[{"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/media?parent=1014"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/categories?post=1014"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nypirg.org\/capitolperspective\/wp-json\/wp\/v2\/tags?post=1014"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}