A new bill in Montana would require all insurance companies to set auto insurance rates based on a motorist’s driving record, not on other factors.

Currently, car insurance providers in Montana take many factors into consideration when determining premiums. They look at an individual’s driving record, but they also look at a driver’s personal behaviors, like education and occupation.

If lawmakers pass the bill, auto insurers would be prohibited from using such information when determining rates.

The argument is that education level is not necessary for insurers to determine a driver’s risk on the road. If the bill goes through, Montana would join a few other states that have already prohibited the use of personal behaviors in determining car insurance rates.

Currently, Massachusetts, California, and Hawaii prohibit insurers from using any consumer credit information.

Many believe that car insurance should be based more on how you drive, not who you are. With the rise of usage-based insurance, an insurance model based on how you drive, risk pricing based on education or personal behaviors may become obsolete.  

Montana’s bill just had its first hearing in the House Business and Labor Committee, and will be decided on in future months.

Read more about this bill at MTPR.

Source: KVTQ