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Automotive insurers use more than just your driving history to set your rates, the New York Times is reporting.


http://www.thetruthaboutcars.com/2015/08/want-cheaper-car-insurance-pay-gas-bill-time/#more-1137434

Factors such as your credit score, address and marital status can increasingly affect premiums more than driving history, the story explains.

A survey of the nation’s largest insurers — Geico, State Farm, Nationwide, Liberty Mutual and Farmers — found that a hypothetical woman in her 30s paid more if she was widowed, instead of married, at four of the five firms. The premium increases ranged from 3 percent to 29 percent. Only State Farm charged the woman the same, regardless of marital status.


Many insurers use credit reporting bureaus to adjust rates for drivers looking for coverage.

A 2003 study by the University of Texas found that drivers with lower credit scores filed more claims and were a greater risk to car insurance companies, although several states including California, Massachusetts, Hawaii and Colorado outlaw the practice of adjusting rates or denying coverage by using credit scores. Some have said that credit scores are unreliable at predicting driving habits and unlike cable companies, if you don’t pay your premium, insurance companies are pretty quick to suspend your coverage.

But the study found that married drivers get the benefit of the doubt more often. Despite having more single adults in the U.S. now, married drivers get lower rates because they’re responsible adults and never make mistakes, or something. Here’s how they explain how it works (via NYTimes):

“David Snyder, a spokesman for the Property Casualty Insurers Association of America, said that rather than showing a penalty applied to widows or other unmarried people, the analysis reflected that many insurers gave a discounted premium to married couples, because they tended to be more responsible and had a lower rate of filing claims. So if drivers are not married, they will not receive a quote with that discount.”

See? Single drivers aren’t penalized. They’re just not rewarded. Those are totally different.

Nonetheless, the story’s most salient point is that — at least in the United States — the process of adjusting and setting rates isn’t totally transparent, despite the government mandate to make it so.
 
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