When it comes to the way in which car insurance companies calculate the premium rates, there’s always some controversy when irrelevant factors appear to be taken into account to increase the rates. So many believe the sole basis of the calculation should be the skill and experience of the driver. Learners should therefore pay the highest rate because they are most likely to be involved in accidents, whereas older and wiser drivers should be rewarded for careful driving with the lowest rates.

Unfortunately, where people live can have a direct bearing on the likelihood of a claim. For example, their neighborhood may be a hot spot for vehicle vandalism and theft. People who live there should therefore pay more for comprehensive cover. Equally, if there’s a high rate of accidents, collision rates would be higher, and so on. Perhaps the majority of people might instinctively resist the idea of basing any part of the calculation on ZIP codes but, when you come down to the facts, the ZIP code is not irrelevant. It’s a perfectly legitimate factor although, perhaps, one that should come in lower down on the scale. For the record, the voters in California forced a change in the law through the ballot box and local insurers cannot directly rely on ZIP codes in that state.

There’s a similar reaction against the use of credit scores. The insurers believe there’s a direct link between a driver’s credit history and the degree of responsibility shown as a driver. The opponents argue any use of this factor discriminates against the poor with either cannot get a credit card or who have very low scores. The fact this may incidentally target minority groups is also relevant.

Well, if you live in Massachusetts, there’s some good news. Acting on directions from Governor Deval Patrick, the regulations produced by the state’s Insurance Commissioner have been written into an Act. This makes it more difficult for the insurers to return to the old practice of using credit scores. So there you have it. A state has finally begun the process of limiting the use of socioeconomic factors when it comes to setting premium rates. Except some critics say the insurers have found other ways to identify the poor and disadvantaged and so load their premium rates by other means. For example, Massachusetts insurers give discounts to those holding homeowners insurance, or who belong to professional associations, i.e. more favorable rates are given to those who can afford to buy their own homes or who have better levels of education. This is not limited to Massachusetts. The insurers in every state use personal factors like marital status, education and current employment to fix the rates. This inevitably means the insurers are basing their rates on socioeconomic factors as well as the driver’s history of tickets and claims.

The question you now have to ask yourself is whether you feel strongly enough about the issue to pressure your state’s Insurance Commissioner to make regulations limiting the way in whichcar insurance rates are set. If the Insurance Commissioner will not act, are you prepared to collect signatures to get this issue on to the ballot at the next election? Remember, if you are successful, this could mean lower auto insurance quotes for many of the poor and disadvantaged.