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Measures on car premiums struggle to gain traction
When state Rep. David Morales submitted legislation in February that would prohibit auto insurance companies from using any information other than driving records when calculating premium rates, he was prepared for an uphill battle. Similar legislation went nowhere last year. Within days of his submission this session, he heard skepticism from General Assembly members, even…
More factors are promoting what economist call price discrimination. Not in the negative sense of the word, but in the technical sense. Essentially, if all Rhode Island drivers have an aggerate risk valued at an amount that we can call X, instead of splitting that X the number of drivers N, they are saying they have some models that assign higher parts of X to certain drivers. Compare this to the way we price electricity where we all basically pay the same amount even though rural consumers cost demonstrably more to power. We love to use tools of price discrimination when Black and Brown people pay their “fair share”. They should be forced to have their models evaluated and approved by a public regulator.