New York says goodbye to Auto Insurance Rates being based on driver’s education
Could New York auto insurance rates get smarter?
The New York Department of Financial Services (DFS) has finalized a regulation aimed to protect New York drivers from being unfairly discriminated against. The regulation centers around insurance carriers that were using a driver’s level of education or occupation data when determining an auto insurance rate.
After a multi-year investigation, the DFS came to a couple conclusions.
- Education played no role in determining whether someone was a better driver.
- The risk of loss was not higher regardless of a G.E.D. or a PhD.
The DFS has given insurance carriers 180 days to comply. Any carrier currently using these factors will have to comply within that time.
It’s hard not to agree with this decision. In my career, I have not found education to play a roll in future claims. We’ve only utilized one specific auto insurance carrier that asked for this data before rating. Most of the insurance companies do not consider it. However, big ones like Liberty Mutual and Allstate have had to reach agreements with the DFS regarding compliance.
New York auto insurance rates are based on many factors. Factors that have nothing to do with ones driving ability. Eliminating these factors will help ensure that New Yorkers are paying a premium that is more in-line with their age and driving history.