RI Insurance Department Weighs in on Using Vehicle History for Rating Purposes

The Rhode Island Department of Insurance has issued a new bulletin opining on the rising practice of insurers who are using various types of vehicle history scores in their rating of private passenger automobile insurance policies. In response to this growing practice, the Department issued Bulletin 2024-08 stating the following:

The Department is aware that some insurers are using various types of vehicle history scores in their rating of private passenger automobile insurance policies.

We would like to remind insurers of the wording found in 230-RICR-20-05-3 Automobile Insurance Rating section 3.7 that states in part:

“A. No insurer shall charge a higher premium as a result of any loss for which a surcharge is prohibited by R.I. Gen. Laws §§ 27-9-4 and 27-9-53 or § 3.8 of this Part. No insurer shall use a prior carrier type (i.e. standard, non-standard or preferred) for the placement of an insured into a tier or company or use for discount/surcharge programs.

B. No insurer may establish a premium surcharge or penalty, remove a discount, decline an award of credits, tier or re-tier, or place an insured with a member insurer
or otherwise alter premium for any loss(es) other than a Chargeable Accident or Moving Violation. Insurers may not establish “loss free discounts” or “tiers” which
take into account losses which are not Chargeable Accident(s) or Moving Violation(s) as defined in this Part, and/or which occurred more than three (3) years
prior to the effective date of the policy.”

It has come to our attention that some vehicle history scores being utilized by insurers include losses that do not meet the criteria of a Chargeable Accident or that occurred outside the allowed three (3) year look back period. Any rating program that utilizes such a factor is deemed to be in violation of the RI Rating statutes and regulations and insurers should cease using those scores.

Any insurer currently utilizing a non-compliant vehicle history score must submit a filing to the Division via SERFF removing the non-compliant elements no later than November 30, 2024.

These non-compliant rating elements shall not be included in future filings.

The Department can be contacted regarding questions or concerns about this Bulletin via email at dbr.insurance@dbr.ri.gov.