Max, i'd take exception to that statement. there is a substantial difference between bank credit or retail on the one hand, and insurance on the other. Banking and retail are about making money - a banker will not will not finance a property whose market value may not cover his losses if something goes wrong. A retailer will not open his business ina location that is unlikely to guarantee turnover necessary to obtain a certain profit margin. That is pure and simple, no profits - no business.
Insurance, by contrast, is different in that it is not just about profits, but also socialization of risk. In other words, an insurance can maintain a certain profit margin either by mainataining a multi-tiered premium system for different groups, or impose a single premium that is a weighted average of the above. However, by maintaining a multi-tiered system based on some social distinction, such as age, sex, residence, or race (that define 'risk factor') an insurance company goes beyond mere profitability into the area of socializing risk.
That is, the weighted average premium means that some of the risk of the high-premium (i.e. high risk) groups is socialized (as difference between "tiered" and weighted average premiums) onto different groups. The choice of the 'tiered' system means, in fact, that the insurance company is unwilling to burden, say, white people with the risks of black people, or old people with the risk of young people, etc.
That choice can, of course, be justified on the grounds that some risks are not 'transferable, ' or if transfered - they would be tantamount to 'free riding. Arguably, such is the case with home insurance - the risk to a home is more or less fixed over time and known a priori - you know where you are byuing hor house and you cannot move it to another less or more risky neighborhood. In such cases, the folks who bought homes in less risky areas, and paid more for it, would have a point in objecting to subsisidizing high-risk homebuyers' rate.
But that is not the case of cars. The risk of car accident is not the function where the owner resides, but where the car operates - which includes a reletively wide area that includes both good and bad neighborhood. That is, if a suburbanite drives his b'more to work - he face the same if not greater risk as I do (I drive a shorter distance and against the commute) - yet my auto insurance rate is higher than his solely based on the zip codes of our residences.
Of course, public transit is but one solution - it would allow me to avoid paying that premium altogether by getting rid of the car. Another solution is to equalize premiums based on actual rather than socially constructed risk.
wojtek