Property Casualty Insurers Association of America Issues Statement on Auto Insurance
"The latest CFA study demonstrates that there is a lot of competition in the auto insurance market and companies don't do everything in the same way, which gives consumers a large variety of choices and products. Insurance companies follow state law by charging prices solely based on risk and do not engage in socio-economic pricing.
"Consumers should be assured that auto insurance pricing is closely scrutinized by state insurance regulators and is subject to rigorous actuarial standards, which ensure that all rating factors comply with the law.
"For the companies that consider the type of prior insurance, it is one of many factors used in determining a person's rate, and it is supported by the loss experience of those customers. Data shows customers moving from a non-standard policy can have a higher likelihood of future losses than those who come from other companies. As a result, their rates are different to reflect the different levels of risk. The use of this as one of many other rating factors has been approved by state regulators.
"It's also important to note that the recent FIO study, mentioned by CFA, actually found that auto insurance is affordable in more than 90 percent of low and moderate income and minority zip codes. To make auto insurance more affordable, the best approach is to address the pending auto safety crisis plaguing the nation. The frequency and severity of auto accidents are increasing dramatically.
"Auto accident deaths increased 14 percent over the last two years -- the biggest increase in more than half a century."
"PCI promotes and protects the viability of a competitive private insurance market for the benefit of consumers and insurers. PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write
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