4 ms·

Insurers kind of already take advantage of this correlation, by rating policies according to the postcode/zipcode of the policyholder. The usual explanation is

by jl6 7y ago

Insurers kind of already take advantage of this correlation, by rating policies according to the postcode/zipcode of the policyholder. The usual explanation is that some areas have busier roads and busier roads are conducive to more accidents. But busier roads also usually correlate with urban density which often correlates with socioeconomic status, race, crime, ...

sterlind 7y ago
Eerily similar to the practice of Banks red-lining districts they wouldn't sell loans or mortgages to. Legally, this is a sort of "differential impact" discrimination, and iirc it's mostly legal as long as you can justify your reasoning. I think insurers would have to justify their rate adjustments though - a 5% extra premium for comprehensive at the intersection of Skid Row and Mugger's Bend is probably legit, but a 300% extra in Chinatown would land the insurer in legal hot water. Trial lawyers make big money running class-actions for these sorts of things, which hopefully keeps businesses honest. (IANAL, I picked this up from my mom who does labor/employment defense.)
hrktb 7y ago
This is a circle that is going on for very long I think. People with private locked garage will also have better ratings in general. Wealthier places will also invest more in road maintenance and limiting accident factors (for instance having a ton more protective equipment near school zones, investing in underground parking near shopping areas etc.) In general I feel that trying to legally screen info from insurance is a lost proposition, as they have all the data in the world and find a proxy for that info anyway.
- leetcrew 7y ago
  > People with private locked garage will also have better ratings in general. this doesn't help much in my experience. my insurance company doesn't even have a field to tell them whether you keep your car in a garage.
  - hrktb 7y ago
    Interesting. It might depend on the plan, we have a vandalism protection option (in-car theft, window breaking, tire damage etc.) so the insurance company has all the incentive in the world to know where and how it would be parked at night.
    - leetcrew 7y ago
      you're probably right that it depends on the specific coverage. I recently moved to an apartment with an access controlled garage so I did some research to see how this would affect my premiums. in general I found that it doesn't do much for your overall premiums. I don't think my car insurance offers vandalism protection specifically, although I certainly hope it falls at least partially into some other category! I can certainly imagine that the company would change the price of that specific coverage quite a bit depending on where the vehicle is parked.
  - perl4ever 7y ago
    There is insurance for cars that are rarely driven, e.g. collector/classic cars, that requires your car to be in an individual garage.
leetcrew 7y ago
> But busier roads also usually correlate with urban density which often correlates with socioeconomic status, race, crime, ... sometimes, sometimes not. some cities (like mine) vary a lot from neighborhood. I live in a nice one but share a zip code with a poor neighborhood with lots of crime. my premiums are pretty high despite the fact that I keep my car in a locked garage and only use it to hop directly on the freeway and drive out of the city.

by jl6 7y ago

sterlind 7y ago

Eerily similar to the practice of Banks red-lining districts they wouldn't sell loans or mortgages to. Legally, this is a sort of "differential impact" discrimination, and iirc it's mostly legal as long as you can justify your reasoning. I think insurers would have to justify their rate adjustments though - a 5% extra premium for comprehensive at the intersection of Skid Row and Mugger's Bend is probably legit, but a 300% extra in Chinatown would land the insurer in legal hot water. Trial lawyers make big money running class-actions for these sorts of things, which hopefully keeps businesses honest. (IANAL, I picked this up from my mom who does labor/employment defense.)

hrktb 7y ago

This is a circle that is going on for very long I think. People with private locked garage will also have better ratings in general. Wealthier places will also invest more in road maintenance and limiting accident factors (for instance having a ton more protective equipment near school zones, investing in underground parking near shopping areas etc.) In general I feel that trying to legally screen info from insurance is a lost proposition, as they have all the data in the world and find a proxy for that info anyway.

leetcrew 7y ago
> People with private locked garage will also have better ratings in general. this doesn't help much in my experience. my insurance company doesn't even have a field to tell them whether you keep your car in a garage.
- hrktb 7y ago
  Interesting. It might depend on the plan, we have a vandalism protection option (in-car theft, window breaking, tire damage etc.) so the insurance company has all the incentive in the world to know where and how it would be parked at night.
  - leetcrew 7y ago
    you're probably right that it depends on the specific coverage. I recently moved to an apartment with an access controlled garage so I did some research to see how this would affect my premiums. in general I found that it doesn't do much for your overall premiums. I don't think my car insurance offers vandalism protection specifically, although I certainly hope it falls at least partially into some other category! I can certainly imagine that the company would change the price of that specific coverage quite a bit depending on where the vehicle is parked.
- perl4ever 7y ago
  There is insurance for cars that are rarely driven, e.g. collector/classic cars, that requires your car to be in an individual garage.

leetcrew 7y ago

> But busier roads also usually correlate with urban density which often correlates with socioeconomic status, race, crime, ... sometimes, sometimes not. some cities (like mine) vary a lot from neighborhood. I live in a nice one but share a zip code with a poor neighborhood with lots of crime. my premiums are pretty high despite the fact that I keep my car in a locked garage and only use it to hop directly on the freeway and drive out of the city.