Bumpy Road Ahead for Latinos Facing Car Insurance Reform


By Wayne Jebian
Depending on their addresses, some Latinos could be paying higher car insurance rates than non-Latinos in Connecticut for the same amount of coverage. Legislators are seeking to change state laws in favor of more equal policies that are less geographically biased.
For insurance companies that base their monthly premiums on accidents and thefts involving garaged vehicles in cities, varying zip codes yield different fees.
According to a rate comparison on Progressive.com, it would cost a 45-year-old male driver living on Park Street in Hartford more than the same man living on Park Road in West Hartford seeking identical coverage. The two addresses are less than two miles apart and are separated by just one zip code digit.
That means higher rates for more Latinos. According to U.S. Census data, Latinos account for 43.4 percent of Hartford’s population, while West Hartford’s population is only 9.8 percent Latino.
“If you really look at it, people in the cities are getting hit big time with insurance premiums,” state Rep. Angel Arce (D-Hartford) said.
Arce has co-sponsored two bills to relieve the car insurance burden for city residents. “The city people are paying the price for the people in the suburbs.”
Insurance experts argue the opposite. According to Warren C. Ruppar, president of Independent Insurance Agents of Connecticut Inc., the existing automobile insurance law uses a “25/75” formula which subsidizes city drivers through non-urban drivers’ rates.
“If you are garaging your car in an urban area, and let’s say it’s $100 to insure your car, you’re only going to pay $75, 75 percent, because the other $25 is spread out in the rates of all the people who live in a non-urban area,” Ruppar explained. “Quite frankly, non-urban rates are higher due to the fact that they are subsidizing the urban driver.”
Arce countered that explanation, saying that driving in the city is less safe. Out-of-town drivers are more likely to run red lights or speed, he said.
The problem, Arce pointed out, is that if a suburban driver is involved in an accident in the city, the insurance premium is still based on where the car is garaged, not where the accident occurs. When suburban drivers fail to report the accidents they cause, the premiums rise.
The issue is a personal one for Arce. His father, Angel Arce Torres, was the victim of a deadly hit-and-run accident on Park Street in Hartford in May 2008.
Arce said putting cameras at traffic lights in urban areas would support his claim that drivers are not taking responsibility for accidents they cause and that he would support legislation to install them.
Since legislation to monitor traffic as Arce has suggested does not currently exist, further adjustments to insurance premium formulas may be a tough sell.
Arce proposes that the general statutes be amended to reduce rates for private passenger motor vehicle insurance policies for drivers who garage their cars in urban areas. However, it does not list what specific changes should be made.
The bill will expire on March 21 if the legislature does not act on it. State Rep. Victor Cuevas (D-Waterbury), a fellow co-sponsor, said the bill should not be allowed to expire. “This bill will contribute to a sense of equality across Connecticut. In many cases, a town’s or city’s mill rates directly impact insurance premiums regardless of the  actual value of a vehicle,” he said.
Cuevas added that the bill would help automobile sales because inequitable insurance costs will have less of an impact on consumers’ wallets.
Other automobile insurance bills that could benefit urban residents seek to ban the use of credit history, educational history, age and marital status as criteria affecting premium rates.
Representatives from the Connecticut Insurance Department oppose the bills, stating that they have a “negative impact on the consumers of the state.” The most notable impact would be higher rates for many drivers, particularly non-urban drivers, which is the biggest political obstacle to any further reform.
“For the past maybe 30 plus years, there has been a bill saying ‘Let’s just have a statewide rate’ almost every single year,” Judy Thibodeau, a principal examiner with the department, said.
Thibodeau said she is not aware of any state that has gone to a statewide risk pool. Even under existing laws, it is possible for many drivers to find better rates on car insurance if they believe they are being overcharged. A Consumer Affairs Unit has been established at the insurance department to help answer questions drivers have about their policies and to give guidance on how drivers can lower their rates, department spokeswoman Donna Tommelleo said.
Tommelleo encouraged consumers to contact the Connecticut Insurance Department for any insurance-related concerns at the department’s website. http://www.ct.gov/cid/cwp/view.asp?q=254352.