The Consumer Federation of America sent a letter to Commissioner Sharon Clark urging her to investigate discriminatory auto insurance pricing in the state of Kentucky. The letter follows a WAVE 3 investigation into neighborhood discrimination, racial bias, and auto insurance prices, finding a dramatic price difference in auto insurance costs based on consumers’ credit history and the neighborhood in which they live.

In light of the investigative report and CFA’s own research into Kentucky’s auto insurance pricing practices, CFA urged the Department to take the following actions:

1. Investigate insurance company pricing practices and customer premiums to identify any
   proxy discrimination or disparate impacts in the Kentucky auto insurance market. We
   point to investigations and actions begun by insurance regulators in Washington, D.C.,
   Colorado, and California as potential starting points;
2. Prohibit the use of non-driving socioeconomic factors, such as credit-based insurance
   scores, education level, and occupation; and
3. Work with lawmakers to establish a low-cost auto insurance program based on
   California’s model, which would provide bare bones insurance to good drivers for low
   prices.