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Insurance law bans non-driving discounts

On Behalf of | Jan 2, 2018 | Insurance Law

In the past, consumers looking for a deal on car insurance could count on certain factors resulting in a discount on premiums. These factors were typically arrived at through studies correlating them to the likelihood of an accident. However, as insurance law changes, New York drivers may find themselves losing some of the discounts as lawmakers find them discriminatory.

A teacher, dentist or accountant is apparently a lower risk for the insurance industry, but it is not certain if that is because they have fewer accidents or because they use their own means to pay for accident damages. However, while insurance companies previously rewarded these professions with discounts, many states are banning the practice of lowering rates for non-driving factors. The reason is because such discounts often exclude drivers with less education and lower incomes.

Other non-driving factors that are under ban in some states or are being debated include credit score, marital status, homeownership, age and gender. Age and gender, however, have long been accepted as relevant to the risk of accidents in New York and across the country. In fact, recent studies confirmed again that male drivers between 16 and 19 have a considerably higher risk of accidents.

While discounted coverage is a nice perk for drivers who happen to fall in certain categories, it doesn’t protect such drivers from involvement in car accidents. Drivers who do not purchase adequate coverage, fail to file claims in a timely manner, or claim damages not covered in their policies may not understand why the insurance company that was so generous with its discounts does not cover their claims. When this occurs, an insurance company may benefit from the advice of an insurance law attorney with proven experience defending against claims of bad faith.

Source: newsmax.com, “Should Your Dentist Pay Less Than You Do for Auto Insurance?“, Maxime Rieman, Dec. 28, 2017