Judging insurance antidiscrimination law

Ronen Avraham, Alma Cohen, Ity Shurtz

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

Insurance companies use credit score to predict auto insurance risk. The theory being that people who are irresponsible in handling their finance, might also be irresponsible drivers. As a result, in states which ban discrimination based on credit score one would expect to see more fatal car accidents. In this study we seek to estimate the effect of introducing laws that prohibit credit score discrimination on the number of traffic fatalities, taking a standard differences-in-differences approach and using data on traffic fatalities from the Fatality Analysis Reporting System (FARS). We find that prohibiting credit score discrimination is likely to not have an impact on insureds’ primary behavior. Specifically, we find that in the first few years after the introduction of a law prohibiting credit score discrimination, there is a statistically insignificant increase in the number of traffic fatalities. Because the increase is not statistically significant we interpret the results as suggestive only.

Original languageEnglish
Title of host publicationSelection and Decision in Judicial Process around the World
Subtitle of host publicationEmpirical Inquires
PublisherCambridge University Press
Pages223-241
Number of pages19
ISBN (Electronic)9781108694469
ISBN (Print)9781108474870
DOIs
StatePublished - 4 Dec 2019

Keywords

  • Credit score
  • Discrimination
  • Fatal accidents
  • Insurance

ASJC Scopus subject areas

  • Social Sciences (all)

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