A Wisconsin bill drafted to eliminate ZIP codes as a rating factor for determining automobile insurance rates could have broader implications and limit insurers in the state to just three acceptable rating factors.

According to the text of the bill (SB 348) introduced by State Senator Tim Carpenter, D-Milwaukee, insurers would be forbidden from using the ZIP code of an insured's residence as a rating factor on which to base rates. But the bill goes further to specify three permitted factors when setting rates: the driving record of an insured, the length of time that an insured has been driving, and the number of miles that the insured vehicle is driven in a year.

Greg LaCost, assistant vice president and regional manager of the Property Casualty Insurers Association of America (PCI), said this bill was likely introduced due to concerns that urban drivers may be unfairly affected by the use of rating factors such as ZIP codes.