The insurance industry is a competitive industry and if these factors were not fair then their presence would have prompted other insurers to join in and offer more competitive products.
Chicago, IL (PRWEB) October 11, 2012
A recent survey issued by the Consumer Federation of America on September 24, 2012 revealed consumers disapprove of non driving factors such as – gender, credit score, level of education, lack of prior insurance because the consumer did not own a car, occupation, and ZIP code of residence,- factors that auto insurers frequently use in setting car insurance rates.
Ed Sneneh, owner of Insurance Navy, and a former college instructor of insurance and quantitative analysis, stated that "the insurance industry is one that does legally discriminate in several aspects, as long as the bases of discrimination are not arbitrary. For example, auto insurers charge younger people under age 25 years more premium than their mature counterparts under age 70, because there is strong mathematical correlation between young age and accident rates."
Ed Sneneh elaborated that young males under age 25 years cause more accidents than their female counterparts. Furthermore, people with liquor-consumption related occupations (ie bartenders) tend to have more accidents than people in medical fields, such as physicians, for example. This applies to ZIP codes where certain territories have higher percentages of accidents than others; due to population density, road conditions, demographics, among other factors.
"We think that assessing the risks involved as well as the morale, moral, financial, legal, financial and physical hazards is a process that requires lots of analysis. Building mathematical models that incorporate these factors in auto insurance rating is very essential for healthy competition," Sneneh added. "There are a large number of insurance companies that do not consider credit, occupation, and education in their car insurance rating models, and those companies have even higher rates for comparable coverages and liability insurance limits, when compared with companies that incorporate these factors in their rating models," Sneneh said.
The insurance industry is a competitive industry and if these factors were not fair then their presence would have prompted other insurers to join in and offer more competitive products and services. But carriers that ignored these factors in their rating are not doing better in prices, customer services or claim services.
ABOUT INSURANCE NAVY (INB)
InsuranceNavy Brokers is an Illinois insurance agency with several branches in the Chicago and Northwest Indiana regions. The agency is also licensed in the States of Indiana and Wisconsin. INB represents several auto insurance companies.