A number of socioeconomic factors are taken into account while pricing your policy. For instance, if you haven’t paid all your bills on time, it may actually affect your auto insurance rates. However, a new ballot petition will now ensure that it doesn’t.
What are the factors that should actually play a role while determining your auto insurance premiums? There are some large companies that have been arguing that your credit scores as well as occupation also makes a huge difference in the way you drive, but not everyone is in agreement with that.
Presently, in the Massachusetts the credit scores, education levels, and occupation are not some of the factors that are taken into consideration while rating someone’s auto insurance, but there are a number of states that do not have any regulations over this.
Mike Cimaomo of Chicopee states that some people who have lower credit ratings may have problems in finding cheap auto insurance, but education would be beneficial in being able to get discounts.
However, the Massachusetts Association of Insurance Agents seems to disagree on this. They state that a person’s socio-economic status does not necessarily play a role in the way they drive.
Individuals who display risky behavior are generally charged higher rates by auto insurance companies. This is done to discourage high-risk behavior and to minimize loss. Joe Leahy from Leahy and Brown Insurance feels that this is absolutely right and anything else would be really unfair. He is also a part of the MAIA that filed a ballot petition to put a permanent end to these practices. They claim that credit scores could be misleading.
MassPirg had conducted a survey quite recently and found a number of errors in at least 70% of the credit reports that were looked at. MAIA cites this report and states that if the information is so unreliable, then it would be unfair to use the credit scores. This is also seen as a discriminatory practice and hence they want this practice banned permanently, according to Leahy.
Even some of the motorists agree that a person’s occupation or credit scores are not good enough to determine the way someone drives.
Patrick Flynn from Stockbridge states that it is precisely what he would want his insurance agent to do – make it fair. Everybody pays enough for auto insurance and hence it should be fair to the policyholders. The ballot petition has been sent to the Attorney General’s office for review.