CURE Auto Insurance Offering Coverage in Pennsylvania
Dec. 4, 2008 – A nonprofit insurer based in Princeton, New Jersey, is offering low-rate auto insurance for Pennsylvania’s nearly 9 million drivers.
CURE Auto Insurance has been providing auto insurance coverage in New Jersey for 19 years and has begun offering coverage in Pennsylvania with a business model averse to what company officials call “discriminatory” rate-pricing practices. CURE Auto Insurance officials say it’s downright discriminatory for insurers to set auto insurance rates based on drivers’ education, occupations and credit scores.
“It started with credit scores for auto insurance, then over the past five to seven years has proliferated into homeownership, high-paying occupation, and now educational attainment,” Eric Poe, CURE’s chief operating officer, told the Philadelphia Enquirer.
Pennsylvania insurance officials allow auto insurance companies to weigh applicants’ occupations, levels of education and credit ratings but have not responded to arguments against using such personal information when setting auto insurance rates. The state's Unfair Insurance Practices Act prohibits discrimination based on race, religion, nationality, ethnic group, age, sex, occupation, place of residence or marital status when deciding whether to accept or reject someone for insurance coverage.
State Deputy Insurance Commissioner Randy Rohrbaugh told the Philadelphia Enquirer CURE Auto Insurance’s opposition to such pricing tactics is an innovative marketing strategy with an obvious appeal for many consumers.
But Poe says it’s more than just a marketing scheme for the auto insurance company. He hopes CURE’s expansion into Pennsylvania will help lead to legislation banning insurers from considering personal factors other than those directly related to driving when in determining auto insurance coverage eligibility and rates.
“We have already met with a key legislator who has already drafted a form of that legislation,” Poe told the Philadelphia Enquirer.
CURE Auto Insurance officials primarily weigh driving history and location when establishing auto insurance coverage eligibility and rates. The company provides auto insurance coverage for 40,000 vehicles in New Jersey and has about a 1 percent share of the state’s auto insurance market.
Because all drivers must have active auto insurance coverage or face substantial penalties if caught driving without it, CURE Auto Insurance officials say its unfair and “socioeconomically” discriminatory to charge higher rates to people who didn’t go to college or don’t have high-paying jobs. Poe claims Pennsylvania law enables auto insurance companies to discriminate against consumers and cited the common practice of charging higher rates for older drivers and very young drivers as an example of state-enabled auto insurance discrimination.