Will the nation's leading car insurance companies change the way policies are priced? According to documents, Allstate is attempting to adopt a controversial method referred to as price optimization. Critics explain that price optimization boosts the insurer's prices while it downplays the risk the insured driver receives. Meanwhile, loyal customers will be charged more for auto insurance.
Director of insurance for the Consumer Federation, J. Robert Hunter, has set that the onset of data analytics are to blame for this increasing trend. Big data companies focus on rating the customers' shopping habits, and they reduce the weight of risk-related factors. Hunter added that these practices are unfair because low-income drivers do notshop around for insurance as often. Hunter wrote to Georgia Commissioner of Insurance and requested that he denies Allstate's pricing model and ban the practice for all companies.
In Hunter's letter, he says that one of Consumer Federation's requests is that Hudgens finds out how many companies are using price optimization. Loyal customers, whether they were involved in a wreck or not, will be punished because of price optimization. Maryland, California and Ohio have banned this practice for all companies. Assistant Commissioner, Jay Lorence has stated that he thinks something will arrive in the coming months, but they do not want to rush it because they need to make it right.
Howard Strickland advises drivers to shop for car insurance a minimum of every three years to receive the best price. No matter how the Georgia Insurance Commissioner regulates it, auto insurance companies will find a method of charging the highest prices that the market will tolerate. Despite the request to use the new pricing plan, Allstate told Strickland that it will give customers the best product at the right price, based on risk and costs.
Call Pachuta Insurance Today @ 706-769-2262
Sources:
WSB TV
WSAV 3
Director of insurance for the Consumer Federation, J. Robert Hunter, has set that the onset of data analytics are to blame for this increasing trend. Big data companies focus on rating the customers' shopping habits, and they reduce the weight of risk-related factors. Hunter added that these practices are unfair because low-income drivers do notshop around for insurance as often. Hunter wrote to Georgia Commissioner of Insurance and requested that he denies Allstate's pricing model and ban the practice for all companies.
In Hunter's letter, he says that one of Consumer Federation's requests is that Hudgens finds out how many companies are using price optimization. Loyal customers, whether they were involved in a wreck or not, will be punished because of price optimization. Maryland, California and Ohio have banned this practice for all companies. Assistant Commissioner, Jay Lorence has stated that he thinks something will arrive in the coming months, but they do not want to rush it because they need to make it right.
Howard Strickland advises drivers to shop for car insurance a minimum of every three years to receive the best price. No matter how the Georgia Insurance Commissioner regulates it, auto insurance companies will find a method of charging the highest prices that the market will tolerate. Despite the request to use the new pricing plan, Allstate told Strickland that it will give customers the best product at the right price, based on risk and costs.
Call Pachuta Insurance Today @ 706-769-2262
Sources:
WSB TV
WSAV 3
RSS Feed