Is it legal for automobile insurers to set a premium by a persons area code?

Question

Is it legal for automobile insurers to set a premium by a persons area code?

Answer 1

I think you mean ZIP CODE - not AREA code.  With the mobility of cell phones these days, and a lot of folks aren't even getting "land lines" for their houses........area codes on phones could be ANYWHERE!

As far as ZIP CODE rating - companies have been doing it for years.  Rates for larger Metro areas are normally higher than rural ares - however, if the area is REAL rural - maybe folks don't have garages and park their autos under the trees where they are subject to hail storms.

It's tough to explain the increase in premium when folks move, but, that's just the way it is!

Good luck and I hope this helps!

Answer 2

Absolutely legal as of now.

Answer 3

The insurance company's pretty much do what they want to get the "big bucks."  They can use area code,,,zip code,,,,anything they figure will up the risk of being in a accident,,,they look for population and average age of drivers in those areas to see how much of a risk you might be and things like YOU,,,age,,gender,,,driving record ,,how long licensed(experience driving)..etc etc....

Answer 4

Absolutely legal. Wouldn't you think auto insurance would be cheaper in a rural area where there is minimum traffic and little chance of theft compared to an urban area where there is severe traffic congestion and a much greater chance of car theft? Only makes sense.