Auto Insurance Legislation

Senator Gary Farmer has submitted two bills to decrease unfair discrimination in the sale of auto insurance, and to reduce premiums for consumers across the state.
Senate Bill 414 would ban the use of credit scores as a determining factor in calculating auto insurance premiums.  Currently, insurers are permitted to use a customer’s credit history as a justification for higher insurance rates.  According to Consumer Reports, drivers with poor credit scores face an additional $1,301 in auto insurance premiums on average.  The use of credit scores as a determining factor for auto insurance rates has been found to disproportionately affect minority populations, with African American and non-white Hispanic policyholders often paying higher premiums, and is not a reliable indicator for increased risk. “This is a common sense bill that would prevent responsible drivers from being penalized for financial situations which are wholly unrelated to their conduct on the road.  Right now the system is rigged to unfairly force higher premiums on those who can least afford them,” said Senator Farmer on SB 414.  Massachusetts, California, and Hawaii have all implemented similar statutes.
In addition to SB 414, Senator Farmer also filed Senate Bill 410, also dealing with auto insurance.  SB 410 would prohibit the use of zip codes as a determining factor in calculating auto insurance premiums.  A recent study by ProPublica determined that the use of zip codes in auto insurance rates have had an unfair impact on premiums for those living in urban areas, and particularly on minority and elderly communities.  Currently, drivers with the same driving records and level of risk can be charged drastically different premiums simply because of the neighborhood in which they reside.  “While Florida’s statutes contain language which purports is meant to prevent the use of zip codes in auto insurance from being unfairly discriminatory, what we have found is that their use is de facto discriminatory by nature and needs to be banned.  Our minority communities are being adversely affected by our current statutes, so a change needs to be made,” Senator Farmer said about SB 410.
Senator Farmer hopes to see this issue addressed in the upcoming legislative session, as Floridians across the state struggle to keep up with high and often unfair insurance premiums.