02 Dec Should car Insurance Companies Be Able to Ask What You Do for a Living?
The Wall Street Journal has an excellent article by Leslie Scism outlining a move by the New York regulators to protect consumers from insurance companies who want to set rates based on education levels and occupations. Some insurance companies will charge you less based on the education you have. Some will give lower rates based on the type of work that you do. The article details how the “New York Department of Financial Services has told Allstate Corp., Berkshire Hathaway Inc.’s Geico unit, Liberty Mutual and Progressive Corp. to explain why the practice of using occupation and education in pricing shouldn’t be prohibited . . . ” This is fascinating for us because we deal with some of these companies, and we have seen customers raise their eyebrows when we ask them what level of education they completed. When we ask them about their field and specifics about their employment, sometimes they push back and want to know why. If New York moves to eliminate this, we wonder if Oklahoma, Texas, Missouri, Arkansas, and Kansas will follow suit.
Some states already bar the practice deeming it unfair. Basically actuaries believe that riskier people are attracted to certain jobs, and more cautious people are inclined to certain jobs. They believe they can predict driving tendencies by occupation. Well, we want to know what you think. Do you think there is any substance to this? Please Read it here and then leave your comments below.
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