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The following statement regarding the Federal Insurance Office' proposed Auto Insurance Study can be attributed to
"We support the
"Contrary to some misconceptions, the 2017 study found auto insurance to be affordable in the vast majority of zip codes including low income and minority zip codes even using a very aggressive definition of affordability. We think another similar study would be the best alternative because it would help identify trends over time. Any study beyond that should measure not only premiums but the losses which drive those premiums so that we can work together to address the root causes of insured costs, such as crashes, repair costs, thefts, medical costs, and litigation costs. With this approach we assure the continuation of fair and accurate pricing that reflects the risk and supports a healthy and competitive insurance market. And, we have the information needed to work together to address the losses, and thereby save lives, prevent injuries and make insurance more affordable in high loss/high premium areas.
"If the objective is to increase affordability, we are anxious to do so the right way-- reducing losses and the premiums that cover them rather than hiding the losses by creating unfair, unjustified subsidies.
"However, we reject the label of non-driving factors in the context of auto insurance because that implies those factors are not related to risk. In fact, all pricing is subject to state regulatory and anti-discrimination law. States have established legal standards for insurer pricing and 11,000 regulators enforce those standards. Insurers use a variety of factors that have been repeatedly proven to help assess risk of loss and are in full compliance with applicable state laws. The only relevant tests are whether a given factor is actuarially justified, and its use complies with applicable law. Affordability is best advanced by addressing underlying costs, such as high crash rates or poor infrastructure, rather than covering up the real costs through hidden subsidies in insurance rates that are less risk-based.
"We recognize that no one wants to pay more for insurance than they should. This is why insurers are committed to using a wide variety of objective data that has been proven to accurately predict an individual's likelihood of filing a claim and the cost of claims. This is the fairest and most accurate way to price auto insurance because all the factors that are used must help assess risk of loss. It also helps to provides a more complete picture of a driver's potential for filing a claim or the cost of claims.