Auto insurance affordability taken on by FIO
The shiny new Federal Insurance Office is taking its first steps toward vehicle coverage.
The Federal Insurance Office (FIO), which has only just recently been created, has now set its sights on the auto insurance sector and it has now announced that it will be taking on the issues of both availability and affordability.
The FIO is going to be focusing specifically on the way that a specific group of consumers is being served.
According to the announcement from the FIO, it will be starting a study that will look into the availability and affordability in the auto insurance sector when it comes to what the office calls the “traditionally underserved communities and consumers”. Part of this research will involve the contributions of representatives of the industry, regulators, and even the policyholders, themselves. The goal is to find out the “metrics and data FIO should use to monitor” affordability for those specific demographics.
This auto insurance research taps into one of the primary goals of the FIO and its authority.
This effort places itself within the overall authority of the FIO, which is to “monitor the extent to which traditionally underserved communities and consumers, minorities and low- and moderate-income persons have access to affordable insurance products regarding all lines of insurance, except health insurance.”
The research by the office follows a number of reports that have been issued by consumer advocate groups which have suggested that the methods that vehicle insurance companies are using to calculate premiums are making it especially difficult for low- to moderate-income people and drivers who are visible minorities to be able to obtain the same level of affordable coverage.
According to J. Robert Hunter, the Consumer Federation of America’s director of insurance, and the former commissioner in Texas, auto insurance companies aren’t actually making a deliberate effort to charge these customers more and aren’t “going after” them. However, as those insurers focus on trying to appeal to wealthier customers, those in the lower income brackets will sometimes find themselves underserved. This can mean that the availability to these drivers will drop and the prices will rise.