Georgia's insurance commissioner-elect wants to ban using ZIP codes to price premiums

Even with a spotless driving record, a five-digit ZIP code could cost some metro Atlanta drivers more than $1,000 extra per year in car insurance.

State insurance filings analyzed by InsuranceQuotes.com show that drivers who live in southwest Atlanta neighborhoods with no tickets or accidents pay nearly $3,700 a year for full coverage. That is about $1,100 to $1,500 more than what the same driver would pay in a Sandy Springs or Alpharetta ZIP code.

For more than three decades, 58-year-old Bridget Cunningham has been a licensed driver, maintaining what she describes as an impeccable history behind the wheel. Despite decades of safe driving, her rate has continued to climb every year because of where she parks her car rather than how she drives.

"I have no infractions on my record at all, no speeding tickets, no accidents, no DUI, no anything," Cunningham said.

Even with a clean record, her monthly premium doesn't reflect her driving history.

"Oh my God, my payments are sky high," she said.

Cunningham lives in southwest Atlanta's Capitol View neighborhood, located in the 30310 ZIP code, which InsuranceQuotes.com ranks as having the highest auto insurance rates in metro Atlanta. When she compares her bills with peers living in northern neighborhoods, the disparity is clear.

"A couple of friends that don't live in the ZIP code, like the Buckhead area or Sandy Springs area, same age range, same credit score range, it's the ZIP code that's different," Cunningham said. "And their insurance expense is lower, a lot."

Eliminating a person's credit score and ZIP code as factors in pricing auto and homeowners insurance is something Georgia Insurance Commissioner-elect Keisha Waites wants to change. In an email to CBS News Atlanta, Waites said auto rates should be based on actual driving behavior rather than socioeconomic metrics.

"Your rate should reflect how you drive, your record, your claims, the miles you put on your car, etc.," Waites said in the statement, adding that "…in Georgia, a driver with a clean record, but poor credit can pay about twice as much for full coverage as a driver with good credit."

Insurance agent and consumer advocate Raphael Baker, who has worked in the insurance industry for more than 20 years, says using neighborhood boundaries and credit scores to set premiums unfairly penalizes working families.

"It's very akin to redlining in the real estate industry," Baker said.

Baker noted that while credit scores may be relevant for lending decisions, applying them to state-mandated auto coverage creates a financial burden for lower-income drivers.

"With credit scores, of course, you know when it comes to getting credit cards, getting a mortgage, they tell a little bit about your financial stability, but since car insurance is something that you are mandated to have, that shouldn't impact that," Baker said. "Just because you're poor doesn't mean you should pay more. It has nothing to do with your driving, your driving history, and unfortunately, it affects predominantly Black neighborhoods the most."

For Cunningham, the extra money her ZIP code costs her every month could go toward savings or investing. Upon hearing about the incoming commissioner's push to end the practice, she welcomed the effort.

"I applaud her for that. It's needed," Cunningham said.

When asked whether removing credit scores from the pricing formula could negatively impact insurance carriers, Baker said that in his experience, there are several ways companies can categorize customers and still turn a profit without relying on credit history. Still, any permanent ban on using ZIP codes or credit scores to set insurance rates would have to pass through the Georgia General Assembly.