CHICAGO – The following statement by the Property Casualty Insurers Association of America (PCI) is in response to the press release issued today by the Consumer Federation of America (CFA). The statement can be attributed to David Snyder, PCI vice president.
“We agree with consumer advocates that auto insurance consumers should shop around to find the right coverage to meet their needs. The auto insurance market is a highly competitive marketplace with many choices and options that can benefit consumers. However, we disagree with the regulatory recommendations made by CFA as they would harm, not help consumers. The CFA’s approach could cause unfair subsidies and break the critical link between risk and pricing that has prevented the kind of instability that you saw when banks offered loans without relationship to risk thereby helping cause the financial crisis that harmed consumers and our economy.
“All rating factors used by insurers are subject to intense regulation and competition. Insurers are not allowed by regulators in all 50 states to use rating factors that do not reflect the risk of loss. Consumers that finance their vehicles are required by their lenders financing the car to carry comprehensive and collision coverage and this requirement will increase overall premiums.”