Who Gets the Best Rates in Insurance

Apr 15, 2021
2 min read

When you apply for insurance, an insurer asks a bunch of questions to establish a score for you. Sort of like the SATs, you take a test, and your score is meant to predict whether you’ll be successful in school and in your life. In insurance your score should reflect the likelihood that you are a risky driver that is likely to file a claim and determine your price.

The problem with standardized tests - whether they be the SATs or an insurance quote -- is that they measure worthiness in only one way. And sometimes the questions asked are so biased, that they pre-determine the results.  

In insurance, the questions that are asked and the interpretation of the results does not reflect the diversity of the modern American experience. The test was written by ONLY white men 30 years ago and is overseen and enforced today by mostly white men. 

Here’s a snapshot of who scores well and who doesn’t on their test: 

If you have higher credit, work a white collar job, have a degree from Harvard and own your home, you score very well on the test, and get the best rates and service. If you have low credit, work a blue collar job, don’t have a college degree, and rent your home, you score poorly on the test and get penalized and buried in fees. 

It shouldn’t be that a commuter who owns a home in the suburbs, drives 40 miles every day to and from their work in a fancy downtown office, pays less than the doorman who greets them.

At Loop, we believe that all people are worthy of fair rates. And that starts with rewriting the questions on the test. By looking at where you go and where you drive, we’re more accurately scoring drivers based on their risk exposure, and striving to make the results more fair for everyone. 

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