Insurance companies and online privacy

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Auto insurance companies want to turn online (and offline) activities into profits. Selling us coverage required in Montana, companies use complicated algorithms based on shopping habits, personal characteristics, and other behaviors aimed to predict how we would react to different prices, even if our risk is the same. Termed ‘price optimization.’

Driving records and miles driven should impact insurance prices. It’s not fair to charge good drivers same as someone who has several accidents. This links prices paid to the risk brought to roads.

Price optimization isn’t based on risk; it’s a way to charge more because they can. “If consumers don’t shop around, they won’t notice us charging them more.”

Companies shouldn’t base policy prices on shopping habits, or how much profit they can make. Insurance is required by law and lawmakers should protect us from greedy companies seeking to use price optimization techniques.

Roughly 20 states require companies to avoid price optimization — or “price elasticity of demand” — to rate policies. Former Insurance Commissioner Monica Lindeen issued this warning. We need current Commissioner Rosedale to reiterate this, and for lawmakers to enact SB 279. Montana law should ensure that insurance policies are based on driving records, not big data.

— Alex Riccardi, Livingston

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