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Car insurance costs vary widely by ZIP code, gender, regardless of driving record

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car insurance costs vary widely by ZIP code, gender, regardless of driving record
Looking for car insurance? Being a woman could add $ 370 a year to the quote you get even though you have a spotless record

That’s a Chicago Sun-Times investigation that found you in an inflated price for automobile insurance for reasons that have nothing to do with your driving record.

Renting instead of owning a home, or working in an unskilled job could mean an additional $ 117 to $ 175 a year, the Sun-Times found. Living in the “wrong” ZIP code could mean an added $ 175.

For consumers, unlucky to have a combination of factors that insurers see as negative, the result could be a price quote that’s $ 613 a year – 33 percent – higher than what their neighbors would be asked to pay.

And that was the case even when comparing people who have never had an accident and who own the same make and model of car, the Sun-Times investigation found.


Consumer advocates call for disabilities, especially given that auto insurance is required for anyone, including those driving to work or school.

“Douglas Heller, an insurance expert with the Consumer Federation of America, says,” None of these things have anything to do with your driving history ” To top it off, “Illinois makes the least when it comes to overseeing insurance practices.”

Insurance companies say the prices are quoted on their historical data.

“The variables that we select are predictive of whether or not you’re going to be an accident, regardless of income level or ethnicity,” says James Lynch, chief insurance officer for the Insurance Information Institute, an industry research group.

To determine which factors could get you a pricier quote for auto insurance, the Sun-Times received more than 300 online price quotes, using addresses in neighbor hoods around Chicago, seven insurance companies. We found that:

Gender discrimination is baked in pricing formulas of four of the seven insurers, which is legal in Illinois. The use of gender in determining car insurance pricing is specifically prohibited by seven states, including California, where a new anti-discrimination law took effect Jan. 1.
Drivers who do not own their homes are often asked for their car insurance. Four insurers quoted higher prices for drivers who rent, rather than their, a home – even when the renter lives on the same block as the homeowner.
Having the wrong job Three insurers quoted higher prices to insure the car of a high school-educated retail worker compared to a college-educated teacher.
People living just a block apart – but in different ZIP codes – some cases in the quoted rates that varied by up to $ 175 a year.
And some insurers gave much lower price to the drivers on the North Side of Chicago than the South Side or the West Side even when presented with a potential insurance applicant with the exact same characteristics.
The differences were specifically given that, for many Chicagoans, being able to drive is important to upward economic mobility.

How we did the tests
The Sun-Times’ insurance price tests pull back the curtain on what’s historically been an opaque pricing system Though insurers are required to file rate information with the Illinois Department of Insurance, the filings come in the form of hundreds of pages of algorithmic codes and numbers are easily understood by consumers.


By using the companies’ online price-quote tools, we were able to see how non-driving factors – such as gender, home ownership, occupation and location – a consumer has paid how much it has been affected.

In their advertisements, insurance companies will be able to take a online quote. So the Sun-Times, running more than 300 tests, set out to investigate how much car insurance could cost for a driver in different parts of Chicago.

Each of the quotations was sought for a hypothetical single, 38-year-old driver who owns a 2012 Ford Taurus SE and has a perfect driving record. Our will-be insurance customer lives alone and drives about 10,000 miles a year.

Using house numbers no more than a block apart, as well as unique email addresses for each fictitious driver-applicant, we searched for price quotes, changing variables such as male versus female, homeowner versus renter, college-educated teacher versus high school-educated retail worker and homeowners living on either side of a ZIP code limit.

We took the monthly price quotes and figured out what a year’s worth of coverage would cost.


All of the quotations covered bodily injury / property damage insurance, which is legalized in Illinois. The quotes did not include collision coverage. Nor did they include comprehensive coverage for incidents like vandalism, car break-ins or theft – things that could affect where you live.

Each of the price-quote websites include a disclaimer that a driver’s credit history will also affect the final price. But even setting aside credit history, the Sun-Times found patterns of pricing differences by gender, home ownership, occupation and certain ZIP codes.

Price differences pile up
For example, Farmers Insurance quoted a female driver $ 327 to $ 370 more for the yearly coverage from the same block in eight neighbor hoods – ranging from North Side to West Englewood on the South Side .

lansing, Mich. (AP) – Billionaire businessman Dan Gilbert is starting a ballot drive as a “failsafe” in case of Michigan’s Republican-led Legislature and Democratic Gov. Gretchen Whitmer do not enact legislation to cut the country’s highest auto insurance premiums.

The move, confirmed Monday by Gilbert’s top lobbyist, will enable GOP lawmakers to overhaul the no-fault law without worrying about a gubernatorial veto.

“We want a negotiated solution. This is our failuresa if they can not come to one,” said Jared Fleisher, vice president of government affairs at Gilbert’s online mortgage loaner Quicken Loans. It is headquartered in Detroit, home to the most expensive car insurance rates in the U.S.

Fleisher said papers will be filed with the ballot committee, Citizens for Lower Auto Insurance Rates – the first step in the process toward gathering signatures. He declined to reveal what the citizens’ initiative would have been propose but said it will be based on the legislation recently approved by the House and Senate, and Whitmer, without changes without veto threatened.

Talks between Republican legislative leaders and the Whitmer administration

Gilbert’s group would need to collect about 340,000 valid voter signatures, which could cost between $ 2 million and $ 3 million for paid circulators, legal and other costs If it did, lawmakers could pass the initiative and sidestep a veto, allow a statewide vote in November 2020 or propose an alternate to appear on the ballot.

“We expect full, if we have to go down this road, that they will adopt it because we know the House and the Senate have already adopted real auto insurance reform,” Fleisher said.

Michigan is the only state to require unlimited personal injury protection, or PIP, benefits – which on average make up half of auto premiums Under the separate health insurance, motorists could not choose zero PIP coverage or higher levels. The House plan will require, for five years, cuts in PIP rates of between 10% and 100%.

Whitmer opposes a zero-coverage option but said last week is a requirement that drivers buy at least $ 250,000 in benefits is “worth consideration” – which was seen as a significant development by Republican leaders. Many Democratic lawmakers voted against the House and Senate bills, saying they would not do enough savings, stop the use of non-driving factors.

Voters in 1992 and 1994 defeated insurance industry-backed ballot proposals to cap medical benefits But Fleisher said “It’s a whole new world … … you have seen spirals out of control to be really unsustainable. That’s the game-changer.”

A university of Michigan study released last month found that the car is on average unaffordable “in 97% of Michigan’s ZIP codes, based on the U.S.. Treasury Department’s Federal Insurance Office deeming auto insurance as unaffordable if premiums exceed 2% of a ZIP code’s median household income.


The average premium in Michigan – which is $ 2,693, according to the latest report from The Zebra, an insurance comparison website – is 83% higher than the national average of $ 1,470 Detroit’s premium is at $ 5,464, far surpassing any other U.S. city.

Gilbert, who owns the Cleveland Cavaliers, founded Quicken Loans and Detroit-based Rock Ventures, the umbrella entity for his portfolio of business and real estate investments.

Senate Majority Leader Mike Shirkey, a Clarklake Republican, said he was not surprised by Gilbert’s announcement and did not think it would change. Asked if the move had given GOP leaders an edge in bargaining, he told WFDF-AM on Monday that it would be best to have “bipartisan, governor-signed legislation … … We’re not giving up yet.” The little irrelevant to put the timeframe in place is specially if progress is being made. But … it’s days, not weeks before we either decide that we can reach a deal or we can not.

Democratic Rep. Sherry Gay-Dagnogo of Detroit

“Gilbert’s plan does not address the needs of Detroit residents who have suffered the most from high insurance rates by failing to address discrimination in rate-setting, the single greatest factor that leads to out-of-control and unaffordable insurance rates,” she said in a statement. “Detroiters deserve better than lackluster plans from the Legislature or a billionaire at the ballot box.”

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