In testimony before the Joint Financial Services Committee, the Consumer Federation of America urged the Massachusetts Legislature to pass S.820, which would ensure fairer auto insurance premiums for Massachusetts consumers by moderating the use of geographic territory (meaning a driver’s home ZIP code) in premium setting.

Under this bill, auto insurers will be authorized to assign a weight of no more than 75% to the territory’s loss cost and at least 25% to the statewide average loss cost. Loss cost is the total amount of money that an insurer must pay to cover claims, including the costs to administer and investigate those claims.

Massachusetts’s auto insurance market is currently warped by unfair discrimination and systemic bias, as insurers’ use of geographic territory results in low-income, mostly Black and Latino consumers paying higher premiums.