Living in an ethically diverse location with high crime rates could increase your car insurance premium.

That’s according to a joint study by CeADAR, Ireland’s AI centre, and Idiro Analytics which used AI methods to analyse 40,000 quotes across 20 locations in Ireland.

The study aimed to find bias in the algorithms of insurance providers, in light of the soon-to-be enacted EU AI Act which will impose ethical regulations on providers.

The study found Longford Town had the highest quoted premiums in the State, with Crookstown in Cork receiving the lowest.

Car insurance factors

Dr Adrian Byrne, a lead researcher behind the study, said they found “a non-uniform distribution of prices” across many locations.

“Essentially, depending on where you live, and given certain characteristics, it’s not going to be the same for everyone,” he told The Pat Kenny Show.

“We used a Volkswagen Golf because it’s the most popular car in Ireland.

“We found, for example, if you’re driving a Volkswagen Golf and work in retail in Balbriggan, you will pay substantially more than someone with the same car and occupation in Glenageary.”

M50 motorway in Dublin. Image: Peter Cavanagh / Alamy Stock Photo

Dr Byrne said there were some extreme differences between locations.

“Longford Town would be the most expensive area we have on our study and Crookstown would be the least expensive,” he said.

“We took those two areas and we looked at what it would mean to have six penalty points in both areas, what it would mean to make a claim in both cases and so on.

“We found that in the most extreme cases, 60-year-old drivers in Longford Town were actually being quoted higher premiums than 25-year-olds in Crookstown.”

Location

Dr Byrne said that certain criteria seem to decide car insurance costs in a location.

“Based on the contextual information that helped us select these locations, there would be a higher crime rate, lower house prices, and more ethnic diversity in these areas,” he said.

“You may not be aware that if you live in a certain area there may be bits of information that is being factored into the price.

“It does seem to be the case that those that can afford to pay more don’t and those that can’t afford to pay more do.”

The EU AI Act is expected to come into force within weeks after clearing a final vote last month.

Main image: Cars on the main street in Bangor County Down.  Car insurance. Image: Radharc Images / Alamy Stock Photo