Your Rights Against Discrimination in Car Insurance

January 27, 2012

Unfortunately, discrimination is still used when determining car insurance rates despite the advances made over the years. States have adopted car insurance laws, but this has not entirely prevented insurance companies from basing the rates they charge different customers on certain features from their profile. It is important to know your rights when you are buying car insurance so you do not fall victim to discriminatory practices. 

A History of Discrimination

Perhaps the most insidious of discriminatory practices is known as redlining. This practice involved the insurance companies marking certain sections of --typically those with large racial minority populations--and charging higher rates for car insurance for those customers. Redlining was deemed not an explicitly racist practice but was outlawed nonetheless. 

Current Discrimination 

Even though redlining is prohibited, it is allowable for insurance companies to vary their rates according to zip codes. Additionally, although income has been determined to be a substitute for race--on which basing rates is illegal--insurance companies are allowed to set rates according to one's education level and profession. 2 questions remain: how can income qualifications be disallowed while education and profession be acceptable? Are not education and profession related to income? These are issues of discrimination insurance companies and society is still grappling with. 

You have to know your rights against discrimination when you are searching for car insurance. The insurance company takes a lot of personal information from you, and they make it clear that they do not base rates according to certain discriminatory variables. That being said, they do adjust rates based on other factors such as education, profession, gender, etc. Know what is allowable and what is not when getting car insurance and help fight discrimination.

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