As we speak about factors used by auto insurers to fix the premium rates, disputes often aruise as irrelevant factors appear to be applied. Some people just naïvely delieve experienced and careful drivers are rewarded with more affordable rates, and this is the only basis, perhaps with the vehicle itself, for calculating premiums costs.
Unfortunately, thing are usually more complicated and less fair sometimes. And the first factor many policy holders dislike is where you live. For insurers it plays a very big role. For instance, there are neighborhood which can be called hot spots for car vandalism and theft, so people living nearby are a risk-group for insurers in terms of comprehensive cover. Equally, if there’s a high rate of accidents, collision rates would be higher, and so on. So you see as when we look a little deeper, the ZIP code is not so irrelevant. Still, in California drivers decided this factor should be limited in use by local insurers and forced a change in the law through the ballot box.
Credit scores got a similar reaction as a cost-insurance factor. As you may know the companies assume there’s a direct link between a driver’s credit history and the degree of responsibility shown as a driver, rasing rates for people with low scores and those who have no credit cards at all. The opponents affirm that any use of this factor is irrelevant as it discriminates against the minority groups.
There’s some good news for Massachusetts drivers .The state’s Insurance Commissioner produced the regulation in to the Act acting on directions from Governor Deval Patrick. And the insurers can’t easily return to the old practice of using credit scores in evaluation a policy cost. Even more, the process of limiting the use of socioeconomic factors when it comes to setting car insurance rates has begun.
Well, there are other ways for raising quotes in car insurance industry.. The insurers in every state use personal factors like education and current employment, membership of professional associations and marital status to fix the rates. This means rates are often based on socioeconomic factors, plus a driver’s history of claims and tickets. But auto insurance costs should not depend too much on these factors, don’t you think so?
If you agree try your way to pressure your state’s Insurance Commissioner as the people in California, Massachusetts and other stats did, to make regulations limiting the way in which insurance rates are fixed by companies. You can improve anything in your life yourself in 99% of situations. Take your chance now!