E-mail updates
Follow on Twitter
Subscribe to RSSIf you believe the ads, good drivers get the best insurance rates. But a new study shows auto insurers frequently charge good drivers higher premiums than those who recently caused an accident. And it appears from this research that the safe drivers who pay more are often lower income.
How could this happen?
The Consumer Federation of America (CFA), which conducted the study, says this reflects a common practice in the insurance industry of using factors such as education and occupation to rate risk.
A CFA survey in 2012 found that two-thirds of American believed considering these factors, rather than driving history was unfair.
Stephen Brobeck, CFA’s executive director, calls this a “discriminatory practice” that raises the rates for low-and moderate-income drivers.
The industry rejects any notion that it discriminates in any way.
“The policies we offer are fair in every way,” said Michael Barry, vice president of media relations at the Insurance Information Institute.
How CFA surveyed the marketplace
The CFA priced policies for two hypothetical customers: a high school receptionist and an executive. Both women were 30-years old, had driven for 10 years, lived on the same street in the same middle-income ZIP code.
But there were important differences.
The receptionist is single and rents an apartment. She has never had an accident or moving violation, but she was without insurance coverage for 45 days.
The executive is a married homeowner with a master's degree. Her auto insurance has never lapsed. But, she had an at-fault accident with $800 of damage within the past three years.
CFA researchers visited the websites of the five largest U.S. auto insurers – State Farm, Allstate, GEICO, Farmers and Progressive – looking for the minimum liability coverage required by that state. This was done for both women in 12 cities.
The results: Two-thirds of the 60 quotes were lower for the executive (who had an accident) than for the receptionist (who had none), often by 25 percent or more.
The Insurance Information Institute questions whether the test was fair because the receptionist had a break in insurance coverage and that could be seen as a risk factor. The Consumer Federation of America says the receptionist didn’t have a car for 45 days and therefore didn’t need insurance. Does that make her a riskier drive, they ask?
Why is this happening?
Insurance companies consider a variety of factors to determine the risk you pose and the price they should charge when you apply for an auto policy. Everyone agrees your age, sex, type of vehicle and driving history can help predict the likelihood that you will have an accident.
But should insurance underwriters consider your education, occupation or in some cases, your credit score? What do these socio-economic factors have to do with your ability to be a safe driver?
“These factors have been found to be actuarially sound ways to assess risk,” said Michael Barry, vice president of media relations at the Insurance Information Institute. “And before they are ever used, these rating criteria are vetted by state insurance regulators who have allowed them.”
The CFA says it’s not fair for someone to get a better rate simply because they have more education and more income.
“Our concern is that these factors are not proven; there is no logical reason to explain why they should work,” said Robert Hunter, CFA’s director of insurance and former Texas Insurance Commissioner. “The insurance companies say there’s a correlation and that’s all they need.”
Some insurance companies now consider your credit scores when setting your premiums. That doesn’t sit too well with Washington State Insurance Commissioner Mike Kreidler, who calls the practice a “blatantly unfair” way to assess risk.
“I think it’s terrible,” Kreidler told me. “Using a credit score in this economy? You have people who through no fault of their own have wound up with less quality credit and yet are still responsible drivers. They shouldn’t pay more for auto insurance because of that.”
Not in sunshine state
The California Insurance Department decides what ratings factors can be used by auto insurers to calculate auto premiums. Education, occupation and credit scores cannot be considered.
“We want rating factors that have a relationship to the risk of loss,” said Joel Laucher, California’s deputy insurance commissioner for rate regulation.
“You want something that’s fair and fairly intuitive so people understand why there would be a price difference. It should be something the driver can control and realize how they can amend their behavior to improve their rate.”
Massachusetts also restricts the use of socio-economic factors for private auto insurance.
“There was a determination made that auto insurance should more tightly track an individual’s driving,” said Massachusetts Insurance Commissioner Joe Murphy.
The bottom line
There are a lot of insurance companies competing for your business. Rates vary greatly.
A good place to start is your state insurance department’s website. Look for a comparison chart that lists the rates in your area for various hypothetical customers. It’s a simple way to see how various insurance companies compare and where you might want to go to get a quote.
(Find a link to your state’s insurance department at: National Association of Insurance Commissioners.)
You can get quotes from an independent agent who represents various companies or go online and do it yourself at sites such as InsuranceQuotes, InsWeb, NetQuote, InsuranceHotline or Answer Financial. Don’t expect an instant quote from these sites. In most cases, you’ll be contacted by agents looking for your business.
More information:
- ConsumerMan: Want to Cut Your Car Insurance Bill? Shop Around
- Consumer Reports: Car Insurance Buying Guide
- Insurance Information Institute: What Determines the Price of My Auto Insurance Policy?
Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.
Leave a Comment:
Just another way these insurance giants rip off their customers.
Sorry - but this is a completely misleading study. The reason the secretary's rate was so much higher had nothing to do with her credit or marital status or education; it was the result of her not having insurance for the 45 days prior to the day she applied for a policy. In order to get a good rate from an insurance company you need to be covered on a policy for the 6 months leading up to the time you apply for a quote. The policy doesn't need to be in your name. Its fine if you are listed on your parent's policy or on a friend's policy. However, if you have not been covered previously you will pay a lot more for insurance.
You may or may not think this is fair, but the people who put on the study knew that the companies rate this way. The fact of the matter is that the executive with the prior $800 accident would pay more than the secretary with a clear record if they both had been without coverage for the 45 days prior to requesting a quote. If you don't think this is true, go on Net Quotes and see for yourself.
Some companies do give discounts for having a college degree but those discounts are tiny. Many companies (probably most) don't rate based on things like education. Lots of educated people are bad drivers.
Insurance companies do bad stuff at times, but this is a phony argument & the people who administered the survey know it.
So they are not really rating risk. they are rating if you pay your policy? Catch 22. if you don't need credit we will give you all you want.
Sorry Wallac, but this is BS. You're buying car insurance, not 'credit score' or 'income' insurance. This is just another example of corporate america figuring out a way to overcharge for their product. Cost of coverage should be based on your driving record, age/sex, and possibly your location, but nothing else. This is nothing more than a form of 'redlining' under another guise, and if I recall correctly the insurance industry got in trouble for that practice...
Tommy, not everyone in the USA is a lazy blob that sits on the couch, nor is, let alone SHOULD everyone be a PETA-loving, tree-hugging, health Nazi vegan. Truth be told, BOTH ways of thought are harmful to people and both groups of people pollute the world and BOTH of their ways need to be abolished. However, with that being said, another thing that needs to be abolished is the concept of insurance. The reasons that I am saying these words are that the concept of insurance is illegal from the start, much like cash advance places (which is another, possibly even more evil and illegal form of legalized loan sharking, extortion, bribery, payola, and racqueteering), their only purpose of existance is to screw the customer and promote Ponzi/pyramid schemes that only profit the people that are on top and that they are also guilty of being forms of legalized indentured servitude and slavery, along with the other things that I have mentioned with cash advance places. Cash advance places, insurance companies, the IRS, and the FRB (Federal Reserve Board) are illegal, immoral, unjust, unscrupulous, distrustful, and just plain evil businesses that all need to be shut down period without question. I assure you that if such places were outlawed that we would NEVER have a national debt and ditto for outlawing ALL pork barrel projects, special interest projects, and taxes, tariffs, fees, and the like.
Lol. And here I thought the gubment and the dirtbags in Washington invented rules and regulations in a complete vacuum, bereft of any influence from reality. Because why would you need regulations when you have free markets, freedom, god and corporations?
Maybe it's time I put my tri-corner hat away, and start living in the real world.
And considering so many states now legally require automobile insurance...Gold Mine.
I agree Thomas. The one with the gold, makes the rulz.
I can't wait to go research the companies in my state, now, while I have time.
If you go to any of the sites this article suggests you will be hounded by telemarketers almost daily for the rest of your life. Doesnt matter if you tell them to stop, they say they will take you off thier list and then call back the next day. Do not enter your contact info into ANY inusrance quote sites. Call them directly!
Insurance companies have some very unethical practices, including quoting a new customer a lower rate to get their business and then raising the rate right back up over the next couple of years.
Ummm...Did you read the article? She wasn't driving. She didn't have a car. What does she need car insurance for when she doesn't have a car? How does not having a car for 45 days and not needing car insurance make her a worse driver and greater insurance risk than someone who had an at-fault accident?
You may or may not think this is a fair study, but you very well know that the secretary is, in all probability, a better driver. Just "because they rate this way" doesn't mean that they are right. In fact, that IS the whole point of the article - they rate this way, and the way they rate is incorrect.
It also points out something else - the free market isn't working here. In a free insurance market, people with a lower risk should receive lower rates. The fact that she didn't means that the free market is broken here. Possibly due to collusion; I don't know, but it needs to be examined more closely.
DUH. Of course the good drivers pay more. The bad drivers don't have any money. If you don't believe me spend some time in the Walmart parking lot. Looks like a shotgun start at a demolition derby.
I hate insurance companies.
Biggest bunch of crooks in the country.
And this just adds fuel to the fire.
Half the country fell behind on some of their bills during this massive recession and the insurance companies just use that as an excuse to raise people's rates.
Bunch of f * * * ing vultures.
.
Wallace, obviously you just skimmed the article. The secretary didn't have insurance for 45 days because she did not have a vehicle. Highly educated drivers have also been shown to drink then drive more, too. Just treated differently in court. Been on the losing end of that "preferential" judicial treatment.
Wallac has no idea what he's talking about.
Not true Jay, If there is a lapse of coverage, you will pay more. they should have done the study with the with the woman not having one, and see if the rate would be different based on renting and occupation.
@Crazy Steve. Wallac is correct. Just like you, I don't like it, but the fact is that the proof is in the numbers. The state insurance departments have accepted this fact to in most cases. The math doesn't lie. While you may think you are fighting for justice, if people like you get your way, the best risks will see their rates go up to cover the cost of others. I know we live in an era that social justice is the prevailing wisdom, it simply means that the cost will be spread to people that don't need to pay more. While it is the populist thing to slam companies, just remember that they can't do a damn thing with rates without state approval. The vast majority of state insurance departments will act in the best interest of the majority of people. The fact that you think this is red lining is an indication that you know next to nothing about insurance.
They also assume that if you have not had an accident of some kind that the odds are you will have one soon.
The logic doesn't lie either.
All of these people telling us what how unfair this article haven't answered the question in the article:-
How does not having a car for 45 days and not needing car insurance make you a worse risk than someone who had an accident?
The whole point of the article is that the better risk did NOT get the better rate. They proved it. In order to criticize the article, you have to show how not needing insurance for 45 days because you didn't have a car makes you a worse risk than someone who had an at-fault accident.
Umm no chit good drivers pay more due to insurance, it is called simple math. How many times must I say it THE VAST MAJORITY OF US WOULD BE BETTER OFF WITHOUT INSURANCE. It just gives people a warm fuzzy feeling "that everything will be alright". Women fall for the chit all the time and are the main reason for the success of insurance companies in America today.
Some simple math for you, 1000 drivers pay $100 a month for car insurance for example to create a monthly pool of $100,000. The insurance company HAS to make a profit and so let us say it is only 15% (many make way more then that) of that $100k, or $15,000 A MONTH. Our common pool is now down to $85,000 with which ALL drivers have to receive benefits from.
Throw in some insurance fraud or false claims and we can lower the common pool of money even further. Let us say it is only $10k more even though I would wager more is lost to fraud percentage wise then that regardless our common pool is now down to only $75,000.
We still have not even paid one "real" claim yet and have yet to even discus good or bad drivers, but we have lost 25% of the value of the money we paid in. Had we just "saved" that money instead we would be $25 a month farther ahead not even counting any earned interest versus if we had bought insurance instead. If we did have an accident and did not have enough saved up yet then why could we not get a loan from the bank or other people that have not had an accident?
At this point in my life I have paid in more money then I could ever receive back as benefits AND VAST MAJORITY OF YOU WILL TOO. That is the scam/ponzi scheme that insurance is. How ELSE do you think they can afford to pay all those workers, pay for all those commercials, pay for those big buildings, pay for all those computers, pay for all those claims vehicles, etc. Talk about f***ing waste, look no further then insurance. It is the reason our medical coverage costs so damn much, f***ing middlemen/leaches sucking up money that should be getting used for better things.
Stupid motherf***ers will cry about Communism or Socialism, but insist on paying for insurance... And yes I know this somewhat applies to our government, but who the f*** else is going to regulate how much money rich people can acquire? Rich people themselves...ROLFMAO DON'T MAKE LAUGH SO HARD, please. Without "wasteful" checks and balances to try to prevent FAILURE like corporations can endure our government might could run more efficiently, but then it would be more likely to FAIL. If our government fails there will be war. If our economy fails there will be war. WTF do you morons not understand?
How much money is enough? What ratio? 10 to 1, 20 to 1, 100 to 1, 1000 to 1, etc. WTF do you motherf***ers want? What will make you happy, or is there something wrong with you the prevents you from being happy/having enough? I ask because it is you dipchits that are in charge and making up the B.S. rules. You will be the ones responsible for any failures and we will make sure you pay for them since you insist on being in charge/having all the money.
Don't pay money to the government in taxes, PAY IT TO YOUR WORKERS INSTEAD. CUT OUT THE MIDDLEMAN MORONS. It is only because you REFUSE to pay your workers a decent share, percentage, ratio, etc. compared to you is the reason we need a 90% top tax rate. To FORCE you to do what is right for the "good" of the country, system, the people, etc. since you have already been blessed.
@Byron, again, it comes down to the data. The percentage of accidents from those with a lapse in coverage is much higher (actually by a wide margin) than those that have not. The article is a hit piece that really at it's core is flawed. The point of the article is that good drivers with some factors pay more than other good drivers. The story fails to point out that risk is determined my a ton of factors and unlike 30 years ago, when most companies had only two rates to offer a customer, today most carriers have as many as 40 price points or more. Companies have become much more scientific about predicting loss. So as an example, the top 5 or 6 price tiers out of 40 may all have good drivers. What this story fails to point out is that these "good drivers" are still likely getting a rate that is better than 85% of the company's other policy holders. They are just not getting that top, top rate, and it is due to math factors that don't lie. This story is typical of MSN, draw the conclusion and then play on people's anger, ignorance to garner readers.
@Tired, you need to check your facts, most auto insurance carriers are doing really weell if they can reach a 6% margin.
Off topic, but WHEN today did Newsvine go to this stupid "new look". Anyone else hate it as much as me? I just got back online a few minutes ago and was checking to see what comments had been filed on this story after my initial posting. What a shock when the Newsvine homepage came up.
Land of the Free and home of the con artist. We're being had on every corner.
See posts number 23, and 23.1, below.
I can help you, help yourself. I was the top-rated agent in the nation for 15 consecutive months, for a major online carrier. I know what I'm talking about. Search "Ten Questions - John David." Knowledge gives you power.
Please UPVOTE this post so that others will see it. Thank you.
Pipestar, defend these thieves all you want but it doesn't change the fact that these practices are outlawed in some states. And the insurance industry defended 'redlining' with statistics too, so that doesn't wash very well.
One thing that's been missed is the fact that the insurance industry invests a large portion of the premiums they receive, and when the stock market was booming they weren't overly concerned about actual rates. But since the recession, those market profits have shrunk and they're trying to make up the difference on their customers. Cook up some plausible-sounding statistics to justify increased rates, and they can keep reporting inflated profits to the stockholders.
Not buying their product when you have no need of it isn't a valid excuse to charge more when you do buy it.
Wallac - I don't know all the details - there may be a legitimate reason for increasing someone's rate because they didn't have car insurance for the 45 days before they got coverage, but in this day and age of instant information, it doesn't seem likely. Perhaps the person biked to work, got a new job farther away and now needs a car. It's like charging me extra at the supermarket for produce in November because I grew my own veggies in the summer.
This is so unfair & biased by the "big" insurance companies! This just proves that slanted policies & practices are being used to get more money to increase bottom line insurance company profits.
face it insurance companies are broke and resist as long as possible to pay out claims.
in the last 5 yrs have been record payouts and dont forget AIG got billions in bailout funds and most insurance companies use holding corporations to improve there bottom line in investments !
The automobile insurance industry owns the Florida Legislature, namely the Republican party.
Oh here we go. Lets politics into the mix.
Republicans are better drivers than the dems. There. You happy now Steve?
That's how these Rip-Off Companies can afford to have 10 commercials on TV every Hour. What if you've Driven for 40+ years without filing a claim They don't have any problem keeping your money.
Driving safely for 40 years does not guarantee you won't have a $1,000,000 accident in year 41.
I think they should refund you 40 years of premiums. Of course, if you do have that $1,000,000 accident I'd like to see them garnish your wages until you pay them back.
Joshua
The issue is that my premium has yet to go down as claimed if I have a long, clean driving record. It has continued to increase because I have a new car, moved to another neighborhood, or changed jobs. Insurance is nothing but a legal ponzi scheme. And when you do need it they find all kinds of excuses to no pay and then raise your premium anyway. Health insurance is another scam.
Million dollar accidents are usually caused by overboard attorneys and people looking for a quick buck. I'm not saying there aren't cases that tally up with medical and rehab type things though.
They always make the poor (or more correctly the not rich) pay more: I'm amazed that a study had to be done to discover / prove this
What the study confirms is that in poorer area's the risk is higher. If you live in a big city, the poor ends of town are the places where suits happen most. It is also where the highest number of thefts take place and where the highest percentage of those driving without insurance live. Insurance is about math, not feelings. In order for people like you to "feel" better, than a huge number of people that are not as high of a risk, would have to subsidize those that are of higher risk. So if you personally are a great risk, I am sure you would have no problem with paying a couple hundred exrta dollars to cover those that are not as good a risk as you. That is your arguement, correct?
I do agree that driving record is relevant and an important factor in setting rates. But, here is why I think credit score, income, etc., should also be part of the equation (though, perhaps not dominating factor); the whole "what do you have to lose" issue. Arguably, folks with a mortgage, good credit record, good job, etc., are less likely to take risks driving because doing so could impact their ability to continually go to work, could put them at risk of being sued for all their assets or their home, etc. In contrast, someone who has no assets, no home, etc., arguably might drive with an attitude of "who cares if I cause a lot of damage, let them try to sue me, they'll get nothing", etc.
I'm NOT saying ALL folks who have no assets have this attitude, or that folks with homes are morally any better. I'm just saying that, risk-wise, those who have more to lose, or a greater stake in financial costs/risks, might be more careful re: conduct that could cause them to lose money or otherwise jeopardize their investment.
It's similar to the idea that a person is more inclined to take better care of a property (e.g., a condo) if she owns it or has a mortgage on it, vs just renting. The most it will cost a renter if she allows damage to occur, doesn't take car of property, etc., is loss of a security deposit, whereas a homeowner will suffer loss in value of a huge investment.
No, you're just saying MOST of them do. And these days most of the people with that attitude don't even bother getting insurance.
Marianne: I think you nailed it! I've been on both sides of that fence and have seen all those points made in action and explained to me "by the companies themselves".
What I'm trying to say is that is this "what have you got to lose" is the attitude that the insurance company's use to justify, and that there might be a little merit to it, though IMHO it is ridiculous to not also consider driving record. Bad driving record = bad risk, regardless of income education, etc. ..I live in Massachusetts, have a perfect driving record since 1988 (the time of my only at fault accident in 30 years of driving), and also happen to be homeowner with good credit record, advanced degrees, married etc--all factors that arguably insurance companies deem make me lower risk. After our recent insurance reform that took into account many factors other than credit score (e.g., education level, marital stats, etc) my insurance went WAY down (several hundred dollars) even though my car only aged 1 year. So to me I guess a good thing. All those things were true of me the year before reform, but I had higher rates.
texas.....almost every politician gets a job with the insurance industry after they leave office.
The state is a rip-off and will pass ANY law to help insurance companies.
I see your point but in today's market, there are a lot of people who have not been as lucky as you, they have lost their jobs, homes everything. Why should they be punished for something that was beyond their control? They are still good drivers.
Driving is the most dangerous thing many of us do, these days, especially when the car turns into a sled every snowstrom.
And, I see plenty of bad drivers whose vehicles may indicate higher socio-economic status.
And, I see plenty of bad drivers with their children in their vehicles.
Marianne-452798....
I for one disagree with you. I worked on circuit boards for about 8 years skilled portion with adding gold and such to these circuits. I worked for company H (they were third largest manufacture in the
world of the boards) who was bough out by company S. Within a year half the company personal were without jobs and within two years it was all gone. I needed a new job so I became a truck driver in the energy field. About 5+ years later my company B is bought out by company F and two years later and one month before Christmas I'm laid off. Was told I'd be hired back in the spring but they
decided to make cuts and such so now no job. Oh, because I'd not been behind the wheel of an 18 wheeler now for the better part of 6 months no companies wanted to hire me. No accidents, no tickets, no overweight, nothing bad what so ever and about 1.0 million miles driven over almost 8 years didn't count. Took me 14 months to get back to work. Meanwhile my wife went from 55-60 hours a week to 36 hours. We saved our home and autos but most the rest went down the tubes. Needles to say our credit scores are through floor vs the roof, lol. Our house insurance has a little more then doubled over the last three years and our car insurance this year went from just under $1500 to just over $2200. Now no accidents for either of us, no tickets, wife late 50's me early 60's. Insurance used our credit score to help raise our premiums from about $2260 a year to $3900. By the way my wife has been with her company going on 27 years and is charge of her dept. and oh went to the 8th grade. I'm also former Army who served in Vietnam 1968-69. We try to live and do life right but according to your thoughts you think that our cost should be more because of these factors. I think you wrong Marianne and I believe that we are being unfairly rated and scored by our insurance company. Myself, I also believe this is another way for the insurance industry to gouge the paying customer. It's all about their profits and they couldn't care less about us. Anything that they can use to increase how they can charge us works for them. The wife and I are not asking for a special treatment but as hard working people we do ask that we be treated fairly.
I see so many drivers of high end luxury cars acting like they own the road. Tailgating, speeding, cutting people off, always in such a hurry. And one of those people has hit me before. I can tell you that that socioeconomic class doesn’t seem to care much at all if they are at fault in an accident because they have the money to pay for it. They will usually just offer you money outright to get the damage fixed on your own without involving the insurance company. Maybe THIS is the real reason they get a lower insurance rate – b/c the insurance companies know there is a greater chance these people will settle privately and the insurance co won’t have to pay anything.
But they DO own the road. Just ask them (if you can pry them away from their navigation system to look up).
You can have the best rate in the world, best insurance agent but as soon as you file a claim it's over. You have to fight for every dime from that insurance company and deal with very rude and mean adjusters. They will raise your rates through the roof even if the event was an act of God and no fault of your own. You can't switch companies because of the claim you now have against your policy.
Insurance "fraud" being perpetrated BY the insurance companies....I AM SHOCKED!!!
I've found the insurance companies that run TV commercials have higher rates also. Air time is not cheap and that cost is passed on to the consumer.
Cost of insurance should be higher for those with poor driving records. The credit scores, owning a home, etc. should NOT be part of this equassion.
Those who are poor and careless do not even bother with insurance and those who are rich can afford lawyers that have the charges dropped.
Everyone else flips the bills left from above and the Insurance companies makes sure they get their 50%+ on top after paying for all the unwanted commercials.
It just goes to show how much of a scam the Auto Insurance is. The scary part is how messed up is the Home, Health and Life insurance?
A particular over fifty friendly insurance agency was asking me to change to them. That because of my age , I'd get a great deal.
At the same time, my 24 year old son is run off the road by a inattentive elderly driver. He's run into a drainage ditch. She turns her head sees what she did ,and just continued on her way. Too bad for her a off duty cop sees it, calls for help for my son and follows her. She was cited for leaving the scene.
Her insurance was the same as the one courting me. I was told her rates would not go up. But if I tried to add my son, a A+ , soon to be medical student, my rate would literally explode......
Needless to say, they do not have my business.
“The policies we offer are fair in every way,” said Michael Barry, vice president of media relations at the Insurance Information Institute.
Except that the policies are not supported by results, i.e., who actually caused accidents, not who may have caused the accidents.
When insufficient driving history is available, then speculative factors based on reasonable rationales may be appropriate.
(c) 2013
did you really just try to copyright your own post?
None of you, not including the writer, knows what's fair in this business. You see, they hire legions of rocket scientists and physics and math doctorates to do one thing: statistical correlations. Regardless of how you feel emotionally and what you think should be the factors based on common sense, the data clearly shows those factors they mentioned correlate directly to risk, not what you think should be, and I can bet your entire ass they have the data to prove it. You're understanding it is another matter entirely. To them it's never a matter of one individual case against another individual case..... it's all part of the aggregate and in every population (a statistical term, not a bunch of humans) you will have outliers that do not fit inside the shape of the bell curve (another statistic term) and then of course those points (the receptionist and the exec in this article) would make the best news story to the clueless.
Did you really think if they're that greedy they won't be charging more to the exec who could clearly pay up the money? Problem with that is there will be no data to back that up and if shove comes to push they will be in hot water for it. Charging the receptionist more, on the other hand, has perfect scientific justification behind it that will withstand any inquiries, including your perfect common sense.
Live long and prosper...... hopefully not too dumb too.
Yeah I hear you its all about the data.
We are definately in the eras of man verses the Machines.
The machines are winning.
I had a college math professor who ordered anyone who aspired to be a statistician to leave his class. He said “Statisticians are the scum of the mathematical world. You can make statistics tell any story you desire them to tell.”
You are 100% correct.
Let's say insurance companies are greedy and like to screw their clients. If this is true then there should be one greedy insurance company that decides to make a modest profit instead of an extraordinary one in order to gain market share.
This doesn't happen in the real world. From time to time, insurance companies do "buy market share"- but they always end up having to take their prices to actuarially indicated levels to stay profitable.
Yus, simply put, IDNGAFWYTYDB. In other words, I do not give a fahk what you think, you douchebag! What the insurance companies are doing should be and IS illegal in numerous ways. The whole concept of insurance itself should be outlawed, period. It is in violation of numerous laws that pertain to, among other things, organized crime (RICO Act and similar legislation), payola, graft, bribery, extortion, indentured servitude/perpetual slavery, racqueteering, fraudulent and deceptive practices, Ponzi/pyramid schemes, and just plain theft and lying under the law (lying under oath). The concept of the existance of the insurance companies are akin to cash advance places and the same goes for our ever increasing taxes for ever decreasing governmental services and things like the IRS and the FRB (Federal Reserve Board). The government that governs the most does not govern the best. The government that governs the least, contrary to conventional conspiracy theorist belief, does NOT govern the best. The ONLY way that the government governs the best is by being an honest, sincere, fair, just, truthful, morally, ethically, and spirituall right government, period.
Jeez truth....someone has a potty mouth.
Ironic that a guy with such a foul mouth talks about a "spirituall" government.
This is not new.
insurance companies do whatever they feel that is in there best interest and profits.
I agree with most if not all types of insurance when you file a claim its difficult to get what you pay for they are always searching for ways to save on expenditures again insuring profit margin. Not taking care of the customer and also at times raising your rates dropping you are what ever again is in there best interest -Even if you have been insured for years like 10 or 30. This reflects in health insurance, home owners insurance and auto insurance.
I ask where is effective influence. legislation and oversite with our Comsumer Protection Agencies and State Insurance Regulators both state and federal levels. Like all parts of Federal government agencies 2 steps forward 6 steps back. They don't want to ruffle feathers and perform effective oversite and make sensible changes. basically its to much work for them with there limited underperforming resources.
Insurance companies have to much POWER.........
This example chosen is a rather poor one. An $800 claim is an extremely minor accident; many insurance companies give little or no weight to a small claim. Having a lapse in policy for 45 days because one does not need a car for a brief is rather unusual, versus having a lapse in policy because of non-payment. It is likely insurance models don't allow for such an unusual situation.
Incorporating credit score is not unreasonable, as people who are more careful with their finances are lower risks. Yes, some people who are careful, still have rotten luck and get laid off or suffer a family illnes; but also some careful drivers get unluckly and have an at-fault accident.
Insurance rates are determined to charge more for people who have high probabilities of future claims, not to punish people for past accidents. Insurance companies have an obvious incentive to do this as well as possible; however, as a society we do have an interest in putting constraints on the factors they use and insist they spread more of the risk (e.g. not use income as a factor) rather than price for every risk factor.
Many people are starting to drive less using mass transit and other sources of transportation.
Also newer vehicle part replacement costs are astronomoical.
Headlight technology - housing $1200.00
Airbags save lives air bags deploy many times vehicle is considered totaled.
Black boxes in cars we as consumers pay for it insurance companies and car companies primarily benefit from them.
We see many times in the press about less deaths in accidents, less accidents and other positive things that appear to really never be recognized in reduced insurance costs like most things cost just continue to grow.
joker: what the hell are you trying to say?
There is a proven indirect correlation between responsibility and risk. The more responsibility a person both takes on and successfully manages, the lower their risk of destructive behavior. Higher education and higher income are both very traceable ways to demonstrate such reliability, especially as more and more people have blank (or incident-free - statistically, they are the same thing) driving records in an ever-increasingly competitive insurance market. People with higher credit scores also show more overall responsibility, simply by definition of the credit scores.
Drivers in states that ban insurance companies from looking beyond driving records have limited choices as per their insurance policy terms and costs as compared to drives in states without such restrictions. This means that just about everyone is paying more for their insurance to compensate for the uncertainty those restrictions cause - because, let's not kid ourselves - additional costs are always passed down to the end consumer if the market environment can take it, and since we all have to drive to work, there's plenty of room for that in this market. And because everyone is paying more for insurance, the local economy is being held back.
Anyone who tells you otherwise is clueless as to how the economy actually works and/or needs to work in order to remain viable.
What you're saying makes absolutely no sense. According to you, if I have a college degree but work flipping burgers, I'm more responsible than a trades person without one? Do you realize credit scores can be affected by factors outside of people's control? If someone steals my identity and ruins my credit profile, I should pay more for car insurance even though it's not my fault?
Norm, that's a red herring. Most if not all insurers have a behind the scenes process to dispute an "insurance score" penalty in cases of extraordinary life events.
Additionally, many companies insurance scoring models do not hold medical debt against a person.
Norm, I think you manage ZERO responsibility if you flipping burgers, regardless of how many degrees you have. So I think the point Phantom makes is very valid.
This is the type of article, and study, that Herb Weisbaum's editor should have chucked into the garbage.
They could have run the experiment without a break in coverage, and gotten believable results. I would guess that as they cranked up the number of days, the conclusion the "researchers" were trying to reach solidified at 45 days.
Below that they had nothing to say. The editor should have stopped them at that point!
Sounds like the United States Gov.
How is private companies maximizing profits at the expense of consumers to help their shareholders and CEO,"like the US Gov"? If anything, this is the result of too little government and too little regulation.
I should have specified.
The capitalism isn't the problem. I'm tired of the decent, honest people getting screwed while the lazy,dishonest get cheaper this and free that.
Insurance companies are not in the business of paying claims but of collecting premiums. Lost in the discussion are the huge number of drivers that carry NO insurance and that the rest of us have to pay for. They don't mention immigration status in their study but of the roughly 12 million illegals (undocumented if you prefer), it would be interesting to see how many have insurance coverage! Forcing them to prove they have health and auto insurance in the new immigration reform package might be interesting and enlightening.
Insurance is an oxymoron.
You are now realizing this?
In PA we do not have a choice you must have insurance. I look at it as a monthly TAX. If you don't have insurance your ticket will be hundreds, and you will be arrested.
Since it is a "Privilege" to be able to drive, not a right we have as citizen. The insurance company help us have a luxury.
With it being a Right this way if you become impaired the state has a leg to stand on to revoke your licence. Unlike your right to have a gun, that right can not be infringed on or revoked.
Luckily our state commissioner can regulate cost of insurance and investigate companies.
But what can happen here? Companies deny it, they will go to court, pay a fine and still charge more... It won't change.
If you move for the Fed to take on insurance, you will have what people say Big brother, or big gov't doing more, but leave it this way you'll have the same issues over and over... Pick your poison.
We have no choice but to purchase auto Insurance in WI, too.
But, heaven's forbid, healthcare be mandated...Here is looking at you Walker...trying to weasel out on the medicaid grants as we speak...
So, in my state, and, by my interpretation, an automobile is more important than a human body.
I pick for the evil megacorporations and other con artists as well as the government to be poisoned instead of myself, thank you very much, Erin.
Yeah..you finally figured it out did you? I've known this for years as I experienced a previous insurance company supplying outrageous excuses for why I was not getting the lowest possible rate. The straw that broke the camels back was the "number of accounts marked paid as agreed." I've been paying accounts in full and/or on time "as agreed" for forty years. The insurance company suggested that the corrective action would be to to pay my accounts as agreed. I finally dumped them and moved on.
i think the problem with their "experiment", is that the rates given were for a new policy. ----- i'll wager that most insurance companies, especially the one i use, gradually discount those rates over time. ------ when i initially switched to my current company, many years ago, my rates were higher than what i had before, but within a year, the rate dropped significantly. ------------- it is good to "shop around", however --- not all companies are the same.
I found a great book called, "Ten Questions - The Insider's Guide to Saving Money on Auto Insurance: Hidden Discounts Revealed" I used the information in this book to get better coverages than I had before, and I have saved hundreds of dollars over the past year and a half. I encourage everyone to check it out!
And I am the author of that book. Most if not all of the factors used to rate you for "risk" are disclosed and discussed in it. You can preview it thoroughly by searching the book's title and my name (Ten Questions - John David). The website has a pdf preview you can download, and an audiobook preview as well. Less than $10 will save you hundreds or thousands. It is available for all ebook readers, in paperback, and in audiobook.
This is information that the insurance industry does NOT want you to know. Check it out. What you don't know IS hurting you, and costing you money.
PLEASE help your fellow citizens out by up-voting this post so everyone can see it.
-John
Taxes and Insurance, both are regulated by the Government. Try driving a car in some states without insurance, and who do you think pays for the unlicensed and unisured drivers; that's right the licensed and insured drivers. What a corrupt Insurance System that makes everyone pay. Makes me want to go out and get into as many accidents as possible since it really doesn't matter.
Yeah, in washington state you have to have "uninsured motorist" on your policy, not an option. Reason, people driving with revoked licenses, or never had licenses, or were ineligible to have licenses all of which have no insurance. Even if a cop catches them they are caught and released because the jails are full of worst criminals. Sometimes they are not even taken in for processing. So, those who have it and obey the law once again get screwed.
Here's a prime example of lying insurance companies....
I hate to tell you, but it's not mandatory in Washington, although many companies will tell you it is. And what it covers varies from company to company. If you carry liabilty-only insurance, it might be worth buying but ask what is covered. If you have full coverage with adequate limits, it's a waste of money.
In the end it the insurance company's that make the rules and change the rules.
(driver)You have good credit, good driving record , and a DR's degree.
(ins) Great, but I'm sorry you have 3 kids so the costs of an accident would be greater because of higher medical bills if an accident occurred.
(driver) But I get the kids every other year.
(ins)Oh , I'm sorry your divorced so you are a higher risk since you don't have a family to care for anymore.
(driver) but I'm remarried now
(ins) Good for you, but because you support 1 family and pay child support to the other you are a high risk for default on payment.
etc....
that's what actuarial people do ---- they can show statistically that certain groups of people are more likely to be involved in an accident....... and btw, recently divorced is one of those groups.
Sounds like every insured person is in "that certain group".