Territorial auto insurance ratings have been a staple in determining the cost of your premiums for decades. However, legislators in Connecticut have recently made a push to ban the practice with House Bill 5565.

Territorial ratings are fairly self explanatory, and can be easily summed up by the amount you pay for insurance in relation to where you live, which often times has nothing to do with your actual driving record and habits. Because the territorial benchmark can significantly affect the cost of your insurance, this practice that's been around almost as long as car insurance itself has become a hot button issue.

Supporters of the bill claim that the practice of using territorial ratings is controversial and unfair to those who have little choice in living conditions, especially when considering economic strains that have severely impacted Americans across the country, as well as claims that territorial ratings have undertones of racist components when viewing the close correlation of race and class.

The controversy surrounding the territorial rating process came about in Connecticut when legislative researchers were asked in 2004 to quantify the issue through an auto insurance comparison of costs across the state. What the researchers found was that rates sometimes fluctuated so widely based on territory that, for example, motorists in the suburban part of the state's capital would be charged 37 percent less for the same policy when compared to residents living in other parts of the same city.

Connecticut already has regulatory provisions in place that limit the effect of territory on a person's rates. Without these provisions, drivers in the urban areas of larger cities like Hartford, Bridgeport and New Haven would be paying around 10 percent more in premiums, but if the bill passes it would ensure that territory would no longer be a determining factor whatsoever.

But, the insurance industry is fighting the bill tooth and nail.

"Territorial rating is an important part of cost-based pricing and is used in every state in the development of auto rates. In fact, actuarial studies have shown that territory is highly predictive of future risk, much more so than driving record,” the Insurance Association of Connecticut (IAC) said in a statement issued after HB5565 was introduced.

The IAC went on to add to their distaste for HB5565, using similar language to those in support of the bill.

"HB5565 would cause unfair cost-shifting, impair the insurer's ability to judge risk, and do real harm to the marketplace to the detriment of consumers across the state," said the IAC in a statement.

—AJ Register