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Advocates urge Massachusetts to limit ZIP-code weight in auto insurance premiums
Summary
A Consumer Federation of America representative testified in favor of S.820, saying heavy reliance on geographic territory causes unaffordable and disparate auto insurance premiums and proposing a 75/25 weighting to moderate ZIP-code effects.
Michael DeLong, research and advocacy associate with the Consumer Federation of America, told a legislative committee that S.820 would “ensure fair auto insurance premiums for Massachusetts drivers, by moderating the use of geographic territory and premium setting.”
DeLong said many Massachusetts drivers find insurance “expensive or even unaffordable” and that some buy cars without coverage because of cost. He told the committee that insurers in the state “charge safe drivers in 1 ZIP code, hundreds of dollars more for auto insurance,” and that territory-based pricing “often serves as a harmful proxy for income and race.”
The bill would establish a 75%/25% ratio, assigning 75% weight to a territory’s lost cost and 25% to the statewide average lost cost, DeLong said. “It still allows insurance companies to vary premium as based on these, this data, but it prevents the overreliance on ZIP codes that has led to excessively high premiums for various communities,” he said.
DeLong said the change is intended to reduce costs for financially vulnerable consumers and lower the number of uninsured drivers on the road, which he framed as a potential benefit for overall rates. He concluded by urging a favorable report on S.820 and offered to answer questions.
The testimony came during public comment; no committee vote or formal action on S.820 was recorded in the provided transcript.
