Motor Insurance and Discrimination?

positron

Quick question here for the motor-heads (although this may be one for the legal forum... hmmm)!

A work colleague is shopping around for his car insurance renewal, and one particular Insurance company, in their online form, asks for his nationality. He is from a South East Asian country, and purely based on that his quote went up from 700 to 1100 euro. He confirmed this by setting his country of birth as Ireland and he got 700, and then changed it to his real country of birth and then the quote increases to 1100. So, that's a 63% increase, purely based on country of birth.

Now some background facts. This person was born outside Ireland, but has been living here for last 6 or 7 years. He never drove in his country of origin, and here in Ireland he went thru usual RSA procedures here to obtain his license (theory -> provisional -> test -> full license etc) some three years ago. This to me means that the insurance company cannot argue that he is used to driving on the other side of the road and/or he is not used to rules of the road here. (Insurance companies in Ireland in general never honour no-claims bonuses from non-Eu countries either. So here they are using this info only for his disadvantage or their benefit.)

Just wondering is this not discrimination of some type? Anyone know what's the guideline / regulation on this?

Thanks a million!

PS: I am not naming any names, just in case that's against some rules here..

Anan1

Has he tried ringing the ins co in question?

Michael 09

Insurance companies generally use all pieces of information which they ask for as a variable in a formula. The nationality variable must be higher for people of his nationality. This formula is based on statistics and probability. e.g. young male drivers get the raw deal because statically they are involved in more accidents than their female counter parts.

Cuddlesworth

The increase is for the accident rate variable in country's of origin. If you tried to fight it in court you would see the statistics to back it up.

Beruthiel

positron wrote: »

He never drove in his country of origin, and here in Ireland he went thru usual RSA procedures here to obtain his license (theory -> provisional -> test -> full license etc) some three years ago. This to me means that the insurance company cannot argue that he is used to driving on the other side of the road and/or he is not used to rules of the road here.

He should ring them up and state all of the above.

positron

Anan1 wrote: »

Has he tried ringing the ins co in question?

Yes. He emailed them, and someone rang back (which was nice of them, to be fair), and they tried to make a point that they increase the premium as he might have been driving elsewhere following different rules of the road, to which he explained he took his license here and has been living here long enough, which is info they have asked and he has provided. Insurance company person then tried to suggest that all insurance companies does this in Ireland - which is obviously not the case as he has checked and has obtained quotes from a number of other insurance firms already, and none of them asked him for country of birth.

Michael 09, I understand identifying risks and classifying people according to their profile is exactly what insurance companies do, but is there guidelines on how certain info should or should not be used? For example, can they set different risk assessments based on someones religious affiliation? Or race or ethnicity? Isn't country of birth (considering he lives here and learned to drive here) something that shows only his his ethnicity, not his driving abilities?

Anan1

I'd say the office of the insurance ombudsman is the best place to find out.

djimi

I dont see how country of birth can be taken into consideration as a factor if all of his driving experience was gained in Ireland.

If this is something that is bothering him a lot then follow up with the insurance ombudsman as advised above. I think were it me Id just go to one of the other companies that isnt choosing to rascially discriminate against me...

Anan1

djimi wrote: »

I dont see how country of birth can be taken into consideration as a factor if all of his driving experience was gained in Ireland.

If this is something that is bothering him a lot then follow up with the insurance ombudsman as advised above. I think were it me Id just go to one of the other companies that isnt choosing to rascially discriminate against me...

If it were me i'd be on for making an issue of it.:)

Cuddlesworth

positron wrote: »

Michael 09, I understand identifying risks and classifying people according to their profile is exactly what insurance companies do, but is there guidelines on how certain info should or should not be used? For example, can they set different risk assessments based on someones religious affiliation? Or race or ethnicity? Isn't country of birth (considering he lives here and learned to drive here) something that shows only his his ethnicity, not his driving abilities?

No guidelines just cold hard numbers. You can use all the examples you want, but if anything is deemed to be a significant variable they can and will ask the question and change premiums accordingly. Its doubtful that religion would be a significant variable, but it might be closely linked to country of birth for various reasons.

To make this clear, it is not good business to asses each and every individual driver. They work in a world of limited data and averages. And this company feels that drivers for southeast Asia are worse drivers then Irish ones. In the same way they might feel that a driver in Meath is a worse one then in Dublin.

positron

Thanks for the comments folks, really appreciate it.

I think I understand the points Cuddlesworth is making, and I can see how it makes sense from a business point of view. However, I don't think someone from Meath can be discriminated over someone from Dublin based on their 'origin'. If the premiums vary between Dublin and Meath, it's probably because that's where they use the car most, and/or currently live/park the car and the statistics of that particular area. Please feel free to correct me if this is not the case, but I don't think anyone within Ireland is being discriminated based on if they were born in Ballina or Foxrock.

I guess my point is, just like how they are not allowed to use religion (I am assuming) to discriminate on insurance premiums, and just like how they are not allowed to use colour (I hope) when considering premium, the country of origin - which is just an indicator of ethnicity, not the persons driving skill - should not be used for calculating insurance premiums. It's just my own humble opinion, but I am sure this is a very rational approach and I don't see how someone can challenge this with numbers. Again, if you were to say there are more bad drivers from Country X, does that mean everyone from Country X is a bad driver? Surely that's the very definition of generalisation and the most common cause for discrimination?

My colleague says he has decided to sign up with another insurance provider who was less judgmental (I wouldn't say discriminatory and or racist just yet as I still don't know the regulation) gave better quote, he is slightly annoyed at this treatment, which is understandable I suppose that after paying half of his salary in tax and for doing everything by the book. I will suggest to him to speak to Insurance Ombudsman, at least to clarify the situation..!

a_v525

If it asks for nationality, it doesnt necessarily mean county of birth. If he has an irish passport, then he could legally say his nationality is Irish (as it says that on the passport) & sin é, cheaper insurance.
However if he just has a work permit or residence status, he cant claim irish nationality and if he gets in a fender bender then they'd say he lied about his nationality.

5500

FWIW get him to give the Insurance federation a ring on 01 676 1914.

I've dealt with Frank there a few time's over the year's when I had problems with companys and he was alway's a great help.

positron

a_v525, the insurance company in question DID NOT ask for Nationality. They asks for 'Country of birth'. They are specifically asking for "Country of birth".

Rest of the points are irrelevant.

Cuddlesworth

positron wrote: »

Thanks for the comments folks, really appreciate it.

I think I understand the points Cuddlesworth is making, and I can see how it makes sense from a business point of view. However, I don't think someone from Meath can be discriminated over someone from Dublin based on their 'origin'. If the premiums vary between Dublin and Meath, it's probably because that's where they use the car most, and/or currently live/park the car and the statistics of that particular area. Please feel free to correct me if this is not the case, but I don't think anyone within Ireland is being discriminated based on if they were born in Ballina or Foxrock.

I guess my point is, just like how they are not allowed to use religion (I am assuming) to discriminate on insurance premiums, and just like how they are not allowed to use colour (I hope) when considering premium, the country of origin - which is just an indicator of ethnicity, not the persons driving skill - should not be used for calculating insurance premiums. It's just my own humble opinion, but I am sure this is a very rational approach and I don't see how someone can challenge this with numbers. Again, if you were to say there are more bad drivers from Country X, does that mean everyone from Country X is a bad driver? Surely that's the very definition of generalisation and the most common cause for discrimination?

My colleague says he has decided to sign up with another insurance provider who was less judgmental (I wouldn't say discriminatory and or racist just yet as I still don't know the regulation) gave better quote, he is slightly annoyed at this treatment, which is understandable I suppose that after paying half of his salary in tax and for doing everything by the book. I will suggest to him to speak to Insurance Ombudsman, at least to clarify the situation..!

I understand your point and will agree with you. You have to be aware that in terms of things like car insurance its a battle between the actuary's and marketing people as to what can be a variable. But I really don't think you would ever see a actuary use skin colour as a variable because it doesn't make any real difference to statistics.

I think if you were to see the stats, you would see that people from southeast asia have horrible accident rates. Don't forget that you can factor in training from parents and driving habits and styles picked up by those around you, likely a high percentage of people also from the region.

I just don't see the point in fighting it because they have the figures to back them up. Its a bit like saying that a good young male driver shouldn't have high insurance because he is not going to crash. He might not, but he falls into a average of high accident rates. The same as your friend.


Would he be as quick to complain if his insurance had gone down as a result?

T-Maxx

Your mate did the right thing to shop around - glad he got sorted in the end.

I too shopped around and subsequently changed from one insurance company to another - my policy went down from €560 to €290.

positron

Cuddlesworth wrote: »

..I really don't think you would ever see a actuary use skin colour as a variable because it doesn't make any real difference to statistics.

And I can totally understand why. In the same way, like explained earlier, "country of birth" ( I might have mentioned Country of Origin earlier - please allow me to correct myself - they were asking for 'Country of birth' atually) could have absolutely nothing to do with the person. For instance, I do know a number of Irish and British citizens (and racially and ethnically white Europeans) who were born in South East Asia, and in Africa. By the logic this insurance company is following, they would also end up paying a huge premium, even if they might happened to have been born there, and grew up in Ireland or UK. Now I agree this is an exception, and vast majority of proposers with 'country of birth' not Ireland probably grew up there as well - however, is that good enough reason to declare them dangerous drivers? I hope not, because that does sounds like blatant discrimination, no?

Cuddlesworth wrote: »

I think if you were to see the stats, you would see that people from southeast asia have horrible accident rates. Don't forget that you can factor in training from parents and driving habits and styles picked up by those around you, likely a high percentage of people also from the region.

I am not challenging this, but purely out of curiosity, is there any such statistics that's available to public?

Cuddlesworth wrote: »

Would he be as quick to complain if his insurance had gone down as a result?

This point is not relevant in any way what so ever. When you are healthy and holidaying in Spain, would you take the time out to write a letter of appreciation to Mary Harney and HSE?

Thanks again for all the suggestions. And for the number, eireal. I will update if he decides to contact them.