Competition is a good way of keeping prices for many products and services affordable to consumers. But when it comes to insurance products that consumers must buy – such as car and home insurance (for anyone with a mortgage), competition does not keep prices low for all consumers. It generally only helps consumers that are attractive to insurance companies. And while in the past, “attractive” meant a consumer with a relatively clean driving and/or claim record, the times they are a’changin.
With the advent of data mining and computer modeling, a consumer’s economic status is carrying more and more weight when insurance prices are set. That means low income consumers with modest assets, and those without access to good credit are often not getting the pricing benefits of competition. And because insurance rating models, like insurance policies before you buy them, are opaque, (not transparent), regulators are having a hard time protecting consumers from being overcharged based on discriminatory/unfair rating factors that may be buried in the models.
UP is working hard to make sure that insurance pricing is fair for all consumers and that consumers have the tools and information to make the best decisions when buying or using insurance. Keeping car and home insurance affordable is particularly important. We have no choice – we must buy the products.
Find our more about the related work we are doing via the links below: