Car Insurance Firms Could Be Banned From Asking What You Do for a Living

Discussion in 'Auto Insurance Forum' started by marindependent, Nov 17, 2016.

  1. marindependent
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    Car Insurance Firms Could Be Banned From Asking What You Do for a Living
    Source: WSJ Article 11/17/2016

    In most of America, your job can affect how much you pay for car insurance. Now, a state regulator is weighing whether to ban the practice.

    The New York Department of Financial Services has told Allstate Corp., Berkshire Hathaway Inc.’s Geico unit, Liberty Mutual and Progressive Corp. to explain why the practice of using occupation and education in pricing shouldn’t be prohibited, according to people familiar with the matter. The move has reopened a long debate among regulators, insurance companies and consumer advocates about what data should be used in setting rates and what should be prohibited even if it is effective at identifying risks.

    Thus far, insurers have been winning. The industry has long used factors like age and gender to help set rates, and has won the right in many states to use credit scores as well.

    Read the rest of the article here.
     
  2. BlockO
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    I can't access either link to read the full article without signing up. but thank you for posting this thread.... you've got me thinking and my wheels turning.

    I'm a little reluctant to respond because I don't know New York insurance law, and I've heard they have the wackiest auto insurance laws in the country.

    but in just about any other state, I'd have to think this is a waste of time and tax dollars. I could be completely wrong, but here are my thoughts:

    as long as employment and education level falls into the discount category, and not part of the base rating, why would anyone want to ban it?

    -Education: no one has a problem with good student discounts regarding current students, where little Johnny or Suzie earns a discount by bringing home a good report card or honor roll/dean's list certificate. so why have a problem with rewarding former students that have earned a degree?

    -Employment: I think the lawmakers that brought this issue up assume that employment status is directly related to income status. it is NOT! I can't speak about how all companies use employment. but many companies take in the stress factor of a job as equal if not greater than the income level.
     
  3. marindependent
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    In a new browser, copy and paste "Car Insurance Firms Could Be Banned From Asking What You Do for a Living WSJ" Open up the link...
     
  4. indienoise
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    I think people don't realize that the more you try to force insurance companies to all be the same, the worse it's gonna be for them. Got bad credit? Go with a non-credit rating company, or one that doesn't weight their rates heavily on credit score. Same goes for education, occupation, and all kinds of other factors. All this is doing is eliminating their chances for a more favorable premium.
     
  5. KenP
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    I've had my fair share of negative reaction when giving quotes and having to ask for education and occupation. American culture is so weird about that kind of thing.

    No one wants to be "judged" or they feel it's "unfair to punish people" who don't have a degree, etc. Funny enough, I've not once heard a complaint when it lowered their premium.... Coincidence, right?
     
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