The modelers are at fault here. They build in credit score, driving history with tickets and accidents, geographical area the customers live in. What are they thinking?
Since insurance looks at credit, claims, driving record, and location…all of which have no color…is it not racist to say that minorities are targeted with higher rates?
Zip code can be a factor in determining premiums but only in the sense that some zip codes have higher claim rates than others in a particular city. You can’t claim racial bias on the actuaries’ because they don’t live in the communities they study!
“This is a need for single payer, government run auto insurance”.
“People should have a Constitutional Right to quality and affordable auto insurance.”
“Make the rich people pay more for car insurance to subsidize the poor people.”
“There are “X” million of uninsured drivers out there.”
“Children should be covered under their parents auto policy until age 27.”
Is insurance discriminatory? Yes, and that’s by design. Does it target minorities? Not in general. I have seen and heard some of the smaller regional players getting defensive in the inner cities. But the reality is that the losses are HIGH. The territory plays a huge party in the premium, and the insurance doesn’t ask with Peter is black, white, or Hispanic, they will get rated for territory equally.
For all their talk about this being bad data, the Ins. Industry SURE doesn’t seem to want to open the books and show us ‘the truth’ about these biases. Color me unimpressed with these arguments by trope.
Credit scoring is not allowed in California ratemaking or underwriting for Personal Lines. For Private Passenger Auto, rates are based on a finite set of factors based with driving experience having the largest weight. Due to restrictions in territorial rating, many rural drivers subsidize urban areas with more losses. The downside of ProPublica is that they don’t account for loss ratio of the area to determine if there is discriminatory practices occurring.
Would they be complaining if they were charged too little in their studies?
The modelers are at fault here. They build in credit score, driving history with tickets and accidents, geographical area the customers live in. What are they thinking?
Are you saying credit score and driving history with tickets/accidents should NOT be factored into a customer’s rating?
You lumped those in with geographical area and I’m not sure if you’re saying ALL of those are bad or ONLY geographical rating is bad.
I think Agent’s /sarc switch was on.
Since insurance looks at credit, claims, driving record, and location…all of which have no color…is it not racist to say that minorities are targeted with higher rates?
Zip code can be a factor in determining premiums but only in the sense that some zip codes have higher claim rates than others in a particular city. You can’t claim racial bias on the actuaries’ because they don’t live in the communities they study!
People of low credit scores in bad neighborhoods have more things to worry about other than their insurance rates.
Coming to a Congressperson’s lips soon:
“This is a need for single payer, government run auto insurance”.
“People should have a Constitutional Right to quality and affordable auto insurance.”
“Make the rich people pay more for car insurance to subsidize the poor people.”
“There are “X” million of uninsured drivers out there.”
“Children should be covered under their parents auto policy until age 27.”
Don’t laugh…you know it could happen!
It is less likely to happen now integrity. Under the Democratic nominee, it likely would have happened in the quest for Social Justice.
Is insurance discriminatory? Yes, and that’s by design. Does it target minorities? Not in general. I have seen and heard some of the smaller regional players getting defensive in the inner cities. But the reality is that the losses are HIGH. The territory plays a huge party in the premium, and the insurance doesn’t ask with Peter is black, white, or Hispanic, they will get rated for territory equally.
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Credit scoring is not allowed in California ratemaking or underwriting for Personal Lines. For Private Passenger Auto, rates are based on a finite set of factors based with driving experience having the largest weight. Due to restrictions in territorial rating, many rural drivers subsidize urban areas with more losses. The downside of ProPublica is that they don’t account for loss ratio of the area to determine if there is discriminatory practices occurring.