Independent insurance agents in Massachusetts are looking to bar credit scores from playing a part in the pricing of auto insurance. The Massachusetts Association of Insurance Agents (MAIA) is leading the charge, hoping to gain enough support from the public and insurance companies to ensure that factors like occupation, education and credit score do not contribute to the overall cost of insurance. Unfortunately, a number of prestigious insurance companies have rallied against the proposal.
MAIA holds that auto insurance prices should be dependent upon an individual’s driving record, not their credit score or education background. Massachusetts law does not bar insurers from using these factors, but does prohibit them from basing prices upon a person’s ethnicity, social status and sexual orientation. Insurers argue that MAIA’s proposal would lead to less accuracy in insurance pricing, putting companies at risk for massive losses.
The Massachusetts Insurance Federation decries MAIA’s proposal and the group’s efforts toward its passage as the issue is already before the state’s Legislature. Senate Bill 461 is currently being reviewed by legislators and, if passed, would keep insurers from using a person’s socioeconomic status as a factor in pricing auto insurance.
As of now, the state boasts of a robust and growing insurance market. Competition has led several companies to offer benefits to drivers who practice safe habits and the stable market has kept premiums on a plateau. Insurers argue that if MAIA’s proposal is accepted, the market will become less competitive and drivers will lose certain benefits.