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New NY rule: Job, degree can’t change auto insurance rates

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New York insurance companies may no longer be able to use an individual’s occupation or level of education as factors determining their auto insurance rates if a proposed rule takes effect. Lindsey Riback / Albany Bureau

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ALBANY – New York’s top insurance regulator wants to prevent auto insurers from discriminating based on a driver’s job or education.

State Financial Services Superintendent Maria Vullo proposed a new regulation Tuesday that would ban job status and education level as factors for setting rates, unless the insurer can demonstrate a particular job or education status has a “reasonable relationship” to driving habits.

The proposal comes after state regulators found some — but not all — insurers were giving worse rates to drivers with a lower education level and low income, according to Gov. Andrew Cuomo’s office.

A 2014 report from the New York Public Interest Research Group found an individual without a college degree working a non-managerial job could expect to pay between 19 and 41 percent more for the same coverage as someone with the same job and a college education.

“Requiring insurers to openly justify the use of education and occupation data in setting rates will ensure that New Yorkers are not being charged higher rates due to factors outside their control as drivers,” Vullo said in a statement.

Insurers are pushing back against the proposed rule, arguing that it would increase costs for all drivers.

In a statement, New York Insurance Association President Ellen Melcionni said a person’s education and occupation “have been mathematically proven to be correlated with risk.”

“Limiting underwriting factors can penalize drivers and drive up the cost of insurance for everyone,” she said.

The proposal received support from NYPIRG, which sent a letter to the Department of Financial Service in 2014 seeking an investigation.

“Auto insurance rates should be based on how you drive, not who you are,” Russ Haven NYPIRG General Counsel, said in a statement.

The proposed regulation can take effect 90 days after it’s published in the official state register.

From there, insurers would have another 90 days to amend their practices.

Cuomo sounded support for the rule change, saying it “cracks down on this unfair practice that soaks drivers for not having a college degree or a high-paying job.”

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