Drivers in the City of Buffalo pay hundreds of dollars more in auto insurance premiums than drivers in places such as Rochester, Albany and Syracuse, and the disparity is even wider when a driver’s credit score is taken into consideration, a new study shows.
If you have a bad credit score or live in a certain ZIP code, you will pay more for your auto insurance, even if you have a perfect driving record, according to a study from the Consumer Federation of America, an association of nonprofit consumer organizations. Those criteria disproportionately affect poor people and people of color, the study showed.
Now, some legislators are trying to put an end to the practice of using credit scores and ZIP codes in insurance underwriting.
Assembly Majority Leader Crystal People-Stokes said the practice of using credit score to underwrite auto insurance policies is unfair, and she has introduced legislation to end it.
“Insurance companies have been consistently discriminating against Black, brown and poor people,” she said. “It is totally unfortunate that your credit score, not your driving record, will determine how much you would pay for your insurance.”
In New York, the average driver with a clean driving record will pay $1,759 more in premiums if they have poor credit than if they had excellent credit, according to the study.
Even a driver with a DWI conviction pays less on average than a driver with bad credit, the study showed. The average driver with bad credit and a clean driving record will pay $589 more than a driver with excellent credit who has been convicted of driving while intoxicated, it showed.
People-Stokes said she herself pays a higher premium simply because of her ZIP code, after looking at the study data.
“I live in 14208 and guaranteed, we pay more for insurance in that ZIP code than other places do across the state,” she said.
On average, drivers with excellent credit pay $826 in annual insurance premiums in Buffalo, compared…
Read the full article here
Leave a Reply