4 Criteria That Car Insurers Cannot Use When Deciding Rates
When a car insurance company figures your auto insurance quotes, they use a lot of different statistics and figures to arrive at the premium listed on your policy. They look at a driver's age, sex, location, and of course his or her driving record. They look at pretty much anything that they legally can. However, there are some criteria that insurance companies cannot use to figure a driver's car insurance premium, as state insurance commissions take action to prevent potentially discriminatory practices.
A driver's race and ethnicity are very notable examples of such criteria. Race and ethnicity cannot have a bearing on a car insurance companies' decision about what coverage to offer or what prices to offer those consumers, even though gender and age can be used. This is because a driver's race has no effect on his or her ability to operate a motor vehicle, and it's very offensive to even suggest otherwise. Due to disability laws, a person's handicap cannot be considered by an insurance company, either. Anti-discrimination laws for handicapped individuals were enacted for a similar reason, although statistically, persons with disabilities are actually less likely to be involved in an accident. Insurance companies can't even ask about race, ethnicity, or disability without being in violation of the law in many states. State law can also prevent an insurance company from deciding a car insurance premium due to sexual orientation, or any other potentially discriminatory practice.
Most states also prevent insurance companies from looking more than two years into a driver's record. This is to prevent drivers from being unfairly penalized for very old accidents and traffic citations. You may have already noticed this if you've had a traffic ticket go off of your insurance record–your rates might have suddenly dropped without explanation from your car insurance company. There are also some types of citations, such as municipal parking citations, that are simply not reported to car insurance companies. It may be legal to charge more for insurance after these types of violations, but insurance providers literally cannot do so, as they don't have the information available to them.
If you think that your car insurance company is using illegal means to decide your insurance premiums, you have a few options. You may decide to simply purchase insurance from another company. Look for auto insurance quotes from a variety of insurers, and you'll find that most strictly adhere to state and federal insurance law. You can also make a complaint to your state's insurance commissioner. This is a good idea, as it keeps insurance companies from unfairly charging other customers.