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pr_capone
03-20-2011, 09:10 PM
This is actually a really good idea.

http://online.wsj.com/article/SB10001424052748704433904576212731238464702.html?mod=googlenews_wsj


The program, called "Snapshot," is optional for Progressive customers. With a small device that plugs into a car's onboard diagnostic computer, Progressive can measure—in real time—when policyholders use their vehicles, how far they drive and how hard they brake. Customers who install the device can get a markdown on their auto insurance of as much as 30% after 30 days, and lock in a discount when they mail the device back after six months. Their rates won't go up based on the findings.

Auto insurers have typically evaluated potential customers by comparing them to others who share similar characteristics. Young single men, for example, have a substantially higher chance of getting in an accident than other demographic groups, and typically pay higher premiums.

But data from an individual driver trump any effort to pool people with similar characteristics. With the Snapshot program, Progressive can offer discounts to people who drive in a safer manner than the usual metrics would suggest. They might find a young single man who shows signs of being a defensive driver, someone who uses the car only on weekends, or others whose habits wouldn't be shown by the standard information insurers gather about their customers.

"Snapshot is underwriting based on how people are actually driving," said Joe Reifel, a partner with consulting firm A.T. Kearney. "It clearly will make the pricing of insurance more accurate."

Rain Man
03-20-2011, 09:12 PM
That'd be great.

I was going to ask if the device stayed on forever, but I guess six months is enough to reveal a driver's true stripes.

CrazyPhuD
03-20-2011, 09:16 PM
Heh except this effectively becomes non-optional very quickly and that's the problem. Fortunately these devices will be trivially easy to fool.

Bugeater
03-20-2011, 09:35 PM
Basing insurance rates strictly on how someone drives? What a novel idea.

This is bad for people like alnorth who would rather base them on your credit rating.

alnorth
03-20-2011, 10:26 PM
Basing insurance rates strictly on how someone drives? What a novel idea.

This is bad for people like alnorth who would rather base them on your credit rating.

bullsh*t, don't be stupid. We have no bias for any rating variable. If the color of your hair or how tall you are could predict whether or not you'd file a claim, we'd use it unless it was illegal.

We don't rate by credit score arbitrarily because we woke up one day and thought that would be a cool thing to do. The connection between filing claims and credit score is ***EXTREMELY STRONG***. We don't know why that is, it just is, you can speculate on your own why you think that might be the reason. (broke people are more desperate to file bullcrap fake claims?)

Real-time driver statistics is the gold standard of fair pricing. In the absence of that, if we have nothing else then yes, an insurance score is a good proxy for determining how likely you are to be a bad driver.

Buck
03-20-2011, 10:27 PM
Wouldn't work. Though I drive the speed limit most of the time, I get up to at least 90 once or twice every six months.

Just Passin' By
03-20-2011, 10:40 PM
Not a chance in hell.

alnorth
03-20-2011, 11:03 PM
ROFL

I looked it up just to make sure (aside from california)...

Progressive STILL USES credit score on top of this new driver monitoring program. Seriously, they will still surcharge you based on credit score, and then optionally they will give you a credit (or not) based on driving habit. Its not an either/or thing.

Take two drivers with identical age/sex/tickets/car/model year/zip code/history/etc if one has a great credit score and the other has a terrible credit score, the one with the good credit score still gets a better rate from progressive, above and beyond the discount they may or may not give you after this device is mailed in.

So no, you can't escape credit score. Sorry to break the bad news to you, but its true. This rating variable is far too strong, for whatever reason, if your credit score is crap, you are a worse risk than an identical someone with a good score.

So, if the thought that your insurance rate is partially determined by your credit score offends you, tough sh*t. Thats just the way things are, outside of the odd 1 or 2 states like CA where insurance credit scores aren't allowed.

Bugeater
03-20-2011, 11:09 PM
bullsh*t, don't be stupid. We have no bias for any rating variable. If the color of your hair or how tall you are could predict whether or not you'd file a claim, we'd use it unless it was illegal.

We don't rate by credit score arbitrarily because we woke up one day and thought that would be a cool thing to do. The connection between filing claims and credit score is ***EXTREMELY STRONG***. We don't know why that is, it just is, you can speculate on your own why you think that might be the reason. (broke people are more desperate to file bullcrap fake claims?)

Real-time driver statistics is the gold standard of fair pricing. In the absence of that, if we have nothing else then yes, an insurance score is a good proxy for determining how likely you are to be a bad driver.
And again, by the time a driver is my age, you have plenty of driving and claims history to base your rates on and a credit score in no way should be part of the equation. It's nothing more than another way to squeeze people for a few more bucks, which in turn probably increases the chances of them making a claim as well.

And I'm pretty sure you guys have methods to detect bullcrap fake claims, so don't feed me that line of bullshit.

Bugeater
03-20-2011, 11:13 PM
ROFL

I looked it up just to make sure (aside from california)...

Progressive STILL USES credit score on top of this new driver monitoring program. Seriously, they will still surcharge you based on credit score, and then optionally they will give you a credit (or not) based on driving habit. Its not an either/or thing.

Take two drivers with identical age/sex/tickets/car/model year/zip code/history/etc if one has a great credit score and the other has a terrible credit score, the one with the good credit score still gets a better rate from progressive, above and beyond the discount they may or may not give you after this device is mailed in.

So no, you can't escape credit score. Sorry to break the bad news to you, but its true. This rating variable is far too strong, for whatever reason, if your credit score is crap, you are a worse risk than an identical someone with a good score.

So, if the thought that your insurance rate is partially determined by your credit score offends you, tough sh*t. Thats just the way things are, outside of the odd 1 or 2 states like CA where insurance credit scores aren't allowed.
I'm glad you get such enjoyment out of this horseshit. And you wonder why people hate insurance companies...

alnorth
03-20-2011, 11:22 PM
And again, by the time a driver is my age, you have plenty of driving and claims history to base your rates on and a credit score in no way should be part of the equation.

BULL CRAP. That is simply not true, whether you like it or not, PERIOD.

I don't care what you are, what age, what sex, what background, what race, if your credit score is good you are more likely to file fewer claims for less money than your identical twin brother clone who has a worse credit score. Who knows why that is, but we have millions of data points telling us that it just is.

If we have 2 50-year old grumpy white-haired men from Nebraska who are the same in every way except one had a great credit score, and the other has a poor credit score, the one with the better credit score is more likely to file less claims, and therefore deserves the lower rate.

Now, lets pretend this was not true, insurance company A continues to rate by credit, and insurance company B was smart enough to realize there's no connection between credit score and losses, and they don't rate by credit.

Insurance company A will lose many perfectly good profitable customers to insurance company B, and if company B was correct, they will profit from company A's stupidity.

Alternatively, if company A was right, then company B will suffer from attracting lots of unprofitable bad risks at too low of a premium.

So, if you think a company is rating by credit ****just*** to get more money, you are ignorant. If the statistics don't bear it out, then overcharging customers will only cost you some good loyal profitable policies who leave you for the competition, while undercharging customers (because you stupidly think credit score doesn't matter) will cause you to gain a lot of unprofitable customers who file lots of claims that cause you to lose your ass.

An insurance company, in an industry as brutally cut-throat competitive as this, has no incentive to overcharge or undercharge anyone. Instead, everyone tries to figure out something that no one else has yet discovered, about how profitable or unprofitable a small segment of customers may be that no one else has figured out yet.

Credit score is old news. If you are an auto or home insurance company who doesn't rate by credit, you are stupid and will soon be driven out of business.

alnorth
03-20-2011, 11:23 PM
I'm glad you get such enjoyment out of this horseshit. And you wonder why people hate insurance companies...

If you aren't also angry about banks who charge more interest to people who have a bad credit score, then you are a silly hypocrite.

PEOPLE WITH BAD CREDIT FILE MORE INSURANCE CLAIMS.

PERIOD!!!!

Bugeater
03-20-2011, 11:31 PM
All righty then, answer this for me. When I call up for a rate quote, they are able to give it to me immediately. How are they able to check my credit rating that quickly?

Bugeater
03-20-2011, 11:32 PM
If you aren't also angry about banks who charge more interest to people who have a bad credit score, then you are a silly hypocrite.

PEOPLE WITH BAD CREDIT FILE MORE INSURANCE CLAIMS.

PERIOD!!!!
I completely understand why a bank would charge more interest since there's a direct correlation with credit scores and borrowing money.

alnorth
03-20-2011, 11:36 PM
All righty then, answer this for me. When I call up for a rate quote, they are able to give it to me immediately. How are they able to check my credit rating that quickly?

They aren't. When we set up a rate set for quick quoting we'll tell the system to rate quotes at an average credit score because we know that customers who are shopping around want a rate right this second and cant wait for a credit report, and aren't necessarily willing to give a social security number until they are willing to sign up. (Think about it, seriously. Why would an auto insurance company need your social security number if they aren't pulling credit?)

Some companies will score you immediately after you sign up, and others will wait a few months and score you at renewal, but make no mistake about it, you will be scored. If you are better than average you'll get an unexpected letter delivering the happy news than your rate has been decreased. If your score is worse than average, your rate will be increased at some point.

JOhn
03-20-2011, 11:43 PM
Well I guess I'm the exception.....

I have shit for credit score, yet have no accidents/claims in 20+ years of driving.:hmmm:

Bugeater
03-20-2011, 11:43 PM
I don't recall ever giving my SSN to my insurance company, but I've been with the same one for about 10 years so maybe I did and I don't remember. I don't think it has much of an effect on me anyway because my credit isn't a trainwreck by any means. It's just the notion that seems absurd to me. As far as I see it, getting into accidents=filing claims. I don't understand how I could possibly use an insurance claim to profit in any way. I must be missing something.

Bugeater
03-20-2011, 11:45 PM
Well I guess I'm the exception.....

I have shit for credit score, yet have no accidents/claims in 20+ years of driving.:hmmm:
Well according to Al, you should be filing a claim any day now. Lots of 'em.

Earthling
03-20-2011, 11:51 PM
They aren't. When we set up a rate set for quick quoting we'll tell the system to rate quotes at an average credit score because we know that customers who are shopping around want a rate right this second and cant wait for a credit report, and aren't necessarily willing to give a social security number until they are willing to sign up. (Think about it, seriously. Why would an auto insurance company need your social security number if they aren't pulling credit?)

Some companies will score you immediately after you sign up, and others will wait a few months and score you at renewal, but make no mistake about it, you will be scored. If you are better than average you'll get an unexpected letter delivering the happy news than your rate has been decreased. If your score is worse than average, your rate will be increased at some point.


I have a small painting business and am required to have insurance for my company but cannot even get a quote without giving out my SS#. So I end up being forced to submit my SS# to people that will store it on their computers and I have no idea how dependable they are or how secure their computer systems are. That SUCKS. I have asked the insurance companies I have called to give me a quote for my cost based upon the very worst credit score scenario and they flat out will not do that until you submit your SS# to them. Years back this found its way to the Supreme Court docket in NY and the court found that they could indeed ask for your SS# before giving a quote, basically saying that you did not have to use any particular company and could go else where if you didn't want to give the info they requested. A real catch 22 since they ALL request it for business insurance.

alnorth
03-21-2011, 12:02 AM
Well I guess I'm the exception.....

I have shit for credit score, yet have no accidents/claims in 20+ years of driving.:hmmm:

Everything is multiplicative, some companies treat credit more harshly than others, and some companies will treat accidents more harshly than others.

For example:

Company A gives only a 20% surcharge for bad credit and an amazing 50% discount for an awesome accident history (yes, that does exist) for the kind of driver who fits your characteristics.

Company B gives a huge brutal 75% surcharge for bad credit (yes, that does exist), and a small 30% discount for great accident history.

Both companies truely, honestly, think they have it all figured it out and both companies think the other company is stupid. Either way, you don't care because in your particular case, company A is going to give you the better rate despite your credit, so you'll sign up with them. Maybe 3 years from now, company B will realize that they overestimated the benefit of credit and underestimated the benefit of driver history so they will revise their rates (since company A has presumably been eating their lunch). After they do that, maybe you'll start to seriously consider company B the next time you shop around.

Seriously, every company tries their best to charge everyone a fair rate based on the information they have, but no two companies are going to have exactly the same rate for you because some companies may think you are a great customer for them while other companies, based on their data, may think you are a lousy risk.

I don't care if your next door neighbor tells you state farm has the lowest rate, don't believe it unless state farm really is the cheapest. Maybe they gave him the best rate, but maybe they will punish you for some reason you don't even know. (Is your home made out of wood instead of brick, like your next-door neighbor's brick house? Is your house and car more expensive? Maybe its because he was 68 years old and has been with them without filing a single claim for the last 19 years and you are just some 39 year old unknown young new customer?) Other people's experience may be valuable in terms of how they were treated when it came to a claim, but as far as price goes, ignore anyone who says X company is the cheapest, because maybe they wont be the cheapest for YOU.

But, no matter what, there is never a reason to charge a rate that is contrary to what the loss data says because you will either drive away profitable customers into the open arms of the competition, or you will attract lousy customers with too-low rates.

alnorth
03-21-2011, 12:23 AM
I have a small painting business and am required to have insurance for my company but cannot even get a quote without giving out my SS#. So I end up being forced to submit my SS# to people that will store it on their computers and I have no idea how dependable they are or how secure their computer systems are. That SUCKS. I have asked the insurance companies I have called to give me a quote for my cost based upon the very worst credit score scenario and they flat out will not do that until you submit your SS# to them. Years back this found its way to the Supreme Court docket in NY and the court found that they could indeed ask for your SS# before giving a quote, basically saying that you did not have to use any particular company and could go else where if you didn't want to give the info they requested. A real catch 22 since they ALL request it for business insurance.

eek. I will admit my limitations.

Specifically, I'm really not 100% sure how the pricing for commercial and business insurance works. My experience is more in personal lines pricing for home and auto insurance.

One thing I will say that could help you is that rates for commercial insurance seems to be far more variable and random between companies than personal lines. Every major company has tens or hundreds of thousands of customers for individual auto and home policies in each large state, so even though they are slightly different in what discounts they offer, every customer more or less is in the ballpark of how expensive they are to insure in a certain state.

However, with commercial and business insurance its tougher because, for example just how many fast food joints will an insurance company insure? Honestly, not very many, so it takes a lot more judgement, and a lot more underwriting and guesswork than some random driver who we have 500 of just in that county.

So, don't be afraid to go to your insurance guy and ask him to shop you around, because most insurance companies are VERY unsure about how much they ought to be charging to insure your business! Maybe you'll be lucky and land on a rate from a big reputable insurance company who charges you way too little in premium!

Earthling
03-21-2011, 12:38 AM
One thing I will say that could help you is that rates for commercial insurance seems to be far more variable and random between companies than personal lines.
!

Definitely true. Interestingly I live in a County that requires a 'Painters License' to paint commercially. (One of the very few I've ever heard of) Anyway, in order to get that license one must also submit their SS# Amazing that in this day and age of identity theft I am having to give out my SS# left and right. The kicker is that I am uber-sensitive to my privacy and my numbers etc. :banghead:

DTLB58
03-21-2011, 12:41 AM
It's way better than going by a credit score. That's the dumbest thing I've ever heard of. :doh!:

pr_capone
03-21-2011, 12:44 AM
It's way better than going by a credit score. That's the dumbest thing I've ever heard of. :doh!:

say that 3 times in a row and alnorth will pop up ala beetlejuice to set you straight.

alnorth
03-21-2011, 12:54 AM
say that 3 times in a row and alnorth will pop up ala beetlejuice to set you straight.

eh, no need because whether he likes it or not, he's rated by insurance score for home insurance, auto insurance, or both. Its like wondering if I'll come around to post on this board that its a good or bad thing that the sun set after 8pm on March 20, 2011.

Doesn't matter what I post or don't post, Whether I gripe about that or not doesnt matter, because the sun did, in fact, set over the continental USA on 3/20/11.

brian964
03-21-2011, 03:31 AM
In my experience it is cheaper getting quotes online. Some of the bigger companies offer discounts when ordering online, because it is less work for them. But to be safe you could compare quotes online, pick the best offer and try a local agency to see if they can match it or do better.

I recommend this site for online comparing: quotes-center.com

HMc
03-21-2011, 04:40 AM
If you want low premiums by virture of this modern "charge-the-riskiest-for-the-risk" insurance approach, then I don't know how you can complain when they use all the info they can. If there's a strong negative correltion b/w credit score and prpensity to claim then why wouldn't they factor that in? Whether or not there is causation there is largely irrelevant, I would think.

SuperChief
03-21-2011, 08:13 AM
All standards for charging premium are sent off for validation by your state's Department of Insurance. They are the ones who have to either accept or reject the company's practices in deeming what is a necessary premium to charge in order to pay out claims. If you have a problem with the premium, maybe you should talk with the DOI?

DMAC
03-21-2011, 08:28 AM
When I was an agent, you did not have to give your ssn. If you did and you had good credit, your "tier" was better and you got a lower rate. Conversly, if you gave your ssn and had bad credit, your rate would go through the roof.

alnorth is right, people with good credit have less claims. I truly witnessed it first hand for many years.

AndChiefs
03-21-2011, 10:08 AM
Progressive has tried this before under a different name. I'm sure it'll be just as successful this time.

DMAC
03-21-2011, 11:07 AM
Progressive has tried this before under a different name. I'm sure it'll be just as successful this time.

It was not heavily marketed last time. If they market it more this time, it might.

AndChiefs
03-21-2011, 11:19 AM
It was not heavily marketed last time. If they market it more this time, it might.

True, last time it was only half-heartily marketed. However, I still don't see much desire in the marketplace for this kind of pricing. Everyone has certain points of time where they may not follow the rules of the road exactly. Therefore, I don't see a whole lot of people going for this option.

vailpass
03-21-2011, 11:44 AM
Auto insurers run credit scores?
I've been with State Farm for 25 years, have never shared my social security number with them.
My nephew tells me all 4 companies he is interviewing for an internship all run credit checks on new hires.

bobbymitch
03-21-2011, 04:13 PM
I guess I find it insulting that all things being the same, except for:
Person A - excellent credit score and drives 80,000 miles a year
Person B - marginal credit score and drives 8,000 miles a year, that
Person A will get a lower insurance rate. Forget that he drives 10 times as much (higher exposure) as Person B.

I also find it insulting that with just about every kind of business checking credit scores, a person can not get a free copy of his/her score free without first either being turned down for credit or charged a higher rate for whatever.

Just Passin' By
03-21-2011, 04:15 PM
I guess I find it insulting that all things being the same, except for:
Person A - excellent credit score and drives 80,000 miles a year
Person B - marginal credit score and drives 8,000 miles a year, that
Person A will get a lower insurance rate. Forget that he drives 10 times as much (higher exposure) as Person B.

I also find it insulting that with just about every kind of business checking credit scores, a person can not get a free copy of his/her score free without first either being turned down for credit or charged a higher rate for whatever.

Just do what the illegals do, and drive without insurance. Problem solved. :thumb:

KCUnited
03-21-2011, 04:19 PM
I also find it insulting that with just about every kind of business checking credit scores, a person can not get a free copy of his/her score free without first either being turned down for credit or charged a higher rate for whatever.

Your score is available for free annually.

Bugeater
03-21-2011, 04:20 PM
When I was an agent, you did not have to give your ssn. If you did and you had good credit, your "tier" was better and you got a lower rate. Conversly, if you gave your ssn and had bad credit, your rate would go through the roof.

alnorth is right, people with good credit have less claims. I truly witnessed it first hand for many years.
But it doesn't mean that people with low credit scores will absolutely, positively make claims. It's the stereotyping that irritates me. I understand why they have to stereotype with young people who have little or no driving history, but there's no way I can justify it in my mind when it comes to older drivers. I really don't give a flying fuck what the numbers say.

chiefzilla1501
03-21-2011, 04:33 PM
But it doesn't mean that people with low credit scores will absolutely, positively make claims. It's the stereotyping that irritates me. I understand why they have to stereotype with young people who have little or no driving history, but there's no way I can justify it in my mind when it comes to older drivers. I really don't give a flying **** what the numbers say.

It isn't stereotyping.

This has been debated for years. Alnorth is right on this. It's not like the evidence shows it to be true. It overwhelmingly shows it to be true. Don't ask why that is. This is based on years upon years of data, study after study. Al's right that it's hard to pinpoint why this is (even though we all have our theories), but it doesn't change it from being true.

Stewie
03-21-2011, 04:37 PM
My understanding is that different insurance companies weigh different driver "attributes" based on what they value as important. I'm with Nationwide and get a 55% discount right off the top for an excellent credit score (plus other discounts).

My previous carrier was Progressive and while I got a discount for my credit score it was no where near Nationwide's. I had never made a claim while with Progressive for those eight years, yet they couldn't match the rate I got with Nationwide. Too bad. Free money Progressive if you stuck with me. I've not made a claim with Nationwide albeit at a much lower rate, so it's still free money.

Bugeater
03-21-2011, 04:43 PM
It isn't stereotyping.

This has been debated for years. Alnorth is right on this. It's not like the evidence shows it to be true. It overwhelmingly shows it to be true. Don't ask why that is. This is based on years upon years of data, study after study. Al's right that it's hard to pinpoint why this is (even though we all have our theories), but it doesn't change it from being true.
Ok, that means that those who have poor credit scores should have a history of submitting claims, right?

And don't tell me it's not stereotyping because that's exactly what it is.

vailpass
03-21-2011, 04:45 PM
Ok, that means that those who have poor credit scores should have a history of submitting claims, right?

And don't tell me it's not stereotyping because that's exactly what it is.

Not stereotyping.
Actuarial Science.
Cold hard facts are cold hard facts.
If left handed midgets that pick their nose in public are twice as likey to die young then left handed nose picking midgets pay higher life insurance premiums. Nothing discriminatory about it.

Bugeater
03-21-2011, 04:49 PM
Not stereotyping.
Actuarial Science.
Cold hard facts are cold hard facts.
If left handed midgets that pick their nose in public are twice as likey to die young then left handed nose picking midgets pay higher life insurance premiums. Nothing discriminatory about it.
Call it whatever you want. My point is, if people with poor credit truly do submit more claims, then they will have A HISTORY of submitting claims, therefore that history of submitting claims ON ITS OWN should justify the higher rate, and the credit score is irrelevant.

vailpass
03-21-2011, 04:54 PM
Call it whatever you want. My point is, if people with poor credit truly do submit more claims, then they will have A HISTORY of submitting claims, therefore that history of submitting claims ON ITS OWN should justify the higher rate, and the credit score is irrelevant.

Actuarial science isn't based on the individual but on the collective as a whole. The history of a single sample is not considered on it's own but is taken into account to view that of the whole. Actuaries don't work from what you have done, they work from what you are likely to do based on a certain set of data.

HMc
03-21-2011, 04:59 PM
Good lord - just when you think CP is losing its burst, a longtime member steps up and tries to dispute the relevance of actuarial science in insurance pricing. Gold.

Bugeater
03-21-2011, 05:06 PM
Actuarial science isn't based on the individual but on the collective as a whole. The history of a single sample is not considered on it's own but is taken into account to view that of the whole. Actuaries don't work from what you have done, they work from what you are likely to do based on a certain set of data.
I get that, but it's a screwed up method that penalizes the whole for the actions of some. Like I've already said, it's understandable for those who have little or no driving history, but when you get into your 30s and 40s and you have two or more decades of driving history to base your behavior on, that should be what you are judged by until you prove otherwise.

Bugeater
03-21-2011, 05:08 PM
Good lord - just when you think CP is losing its burst, a longtime member steps up and tries to dispute the relevance of actuarial science in insurance pricing. Gold.
Ah, so you're one of them too?

vailpass
03-21-2011, 05:09 PM
I get that, but it's a screwed up method that penalizes the whole for the actions of some. Like I've already said, it's understandable for those who have little or no driving history, but when you get into your 30s and 40s and you have two or more decades of driving history to base your behavior on, that should be what you are judged by until you prove otherwise.

It can be quite maddening when none of us can swim because a few mouth-breathers pissed in the pool.

Bugeater
03-21-2011, 05:16 PM
It can be quite maddening when none of us can swim because a few mouth-breathers pissed in the pool.
Indeed, it just seems that auto insurance is nothing but me paying for other people's fuck ups in some way or another. Not a whole hell of a lot I can do about it but bitch, and that I do. My wife has been in the industry for 20 years, she gets to hear it all the time from me.

Just Passin' By
03-21-2011, 05:23 PM
I get that, but it's a screwed up method that penalizes the whole for the actions of some.

The idea of insurance used to be to spread out legitimate costs among a group, thereby sparing an individual from financial ruin.

That's no longer the full story.

vailpass
03-21-2011, 05:24 PM
Indeed, it just seems that auto insurance is nothing but me paying for other people's **** ups in some way or another. Not a whole hell of a lot I can do about it but bitch, and that I do. My wife has been in the industry for 20 years, she gets to hear it all the time from me.

I hear ya'.

HMc
03-21-2011, 05:43 PM
Ah, so you're one of them too?

"They" being those that acknowledge that the earth is more than 5000 years old, that 9/11 wasn't an inside job and that insurance isn't priced to unfairly target you specifically?

Yeah, I am.

Sounds like you're butthurt about your shitty credit rating? I suppose that's someone else's fault aswell, is it? The big bad banks lend you more than you could afford did they?

HMc
03-21-2011, 05:44 PM
I hear ya'.

The whole point of insurance is paying for other peoples screwups, then when you screwup, they pay for yours.

Bugeater
03-21-2011, 05:46 PM
"They" being those that acknowledge that the earth is more than 5000 years old, that 9/11 wasn't an inside job and that insurance isn't priced to unfairly target you specifically?

Yeah, I am.

Sounds like you're butthurt about your shitty credit rating? I suppose that's someone else's fault aswell, is it? The big bad banks lend you more than you could afford did they?
Ladies and gentlemen, I present to you the "Down under" version of R8ers.

vailpass
03-21-2011, 05:47 PM
The whole point of insurance is paying for other peoples screwups, then when you screwup, they pay for yours.

I'm vaguely familiar with the concept, thanks.

HMc
03-21-2011, 05:48 PM
Not on the evidence. No problem, though.

HMc
03-21-2011, 05:51 PM
Ladies and gentlemen, I present to you the "Down under" version of R8ers.

You're the one disputing the validity of actuarial science, dipshit.

Bugeater
03-21-2011, 05:57 PM
You're the one disputing the validity of actuarial science, dipshit.
Look, there's always going to be people who have shitty credit and don't file bullshit claims. There's always going to be the guy who gets piles of traffic tickets every year, but doesn't ever get into accidents. Don't act like it's a 100% foolproof method.

Rain Man
03-21-2011, 05:59 PM
The whole point of insurance is paying for other peoples screwups, then when you screwup, they pay for yours.

Insurance never paid a penny when I bought an engagement ring for the wrong woman 25 years ago. Something is wrong with the system.

HonestChieffan
03-21-2011, 06:48 PM
Insurance companies, no matter what they do, will always have haters. Haters have no clue how insurance companies work, how they pay claims, or how an insurer computes the rates for different people and coverages. It cannot be explained to the haters. They will just do the hate thing.

Big pharma, insurance companies are just doomed to dealing with their burden.

chiefzilla1501
03-21-2011, 07:22 PM
Look, there's always going to be people who have shitty credit and don't file bullshit claims. There's always going to be the guy who gets piles of traffic tickets every year, but doesn't ever get into accidents. Don't act like it's a 100% foolproof method.

There's always going to be a 6th round pick who turns into a Hall of Fame QB like Brady too. That doesn't mean that a team is smart to rest the entire franchise on a 6th round QB. You're talking about the exception, not the rule. What you fail to mention is that if an insurer wrongly assesses the risk and ends up with a high loss ratio because they paid out more losses than they would have if they were smart about their pricing, then the prices for all customers goes up dramatically. They'd have to, in order to recover the cost. In many cases, you put the entire premium pool in danger, especially if your uncompetitive prices are making you lose a lot of your business.

What's worse? Forcing a few exceptions to pay a premium for being unfairly stereotyped? Or forcing the entire group of customers to pay a much higher premium because your insurer has a flawed pricing model to figure out your risk profile?

Bugeater
03-21-2011, 07:26 PM
Insurance companies, no matter what they do, will always have haters. Haters have no clue how insurance companies work, how they pay claims, or how an insurer computes the rates for different people and coverages. It cannot be explained to the haters. They will just do the hate thing.

Big pharma, insurance companies are just doomed to dealing with their burden.
Look fuckface, in case you missed it, my wife has worked in the industry for 20 fucking years, so I have a pretty good goddamn idea how it works. Now go back to DC with all the other dipshit loons like yourself.

pr_capone
03-21-2011, 07:26 PM
Indeed, it just seems that auto insurance is nothing but me paying for other people's **** ups in some way or another. Not a whole hell of a lot I can do about it but bitch, and that I do. My wife has been in the industry for 20 years, she gets to hear it all the time from me.

Agreed 100%.

Fine, my credit sucks (it really doesn't but for the purposes of this post it will) but I have driven claim free for 15 years. Why should I pay the same rate as a person who has filed a claim every 3 years during that same span?

Because we have similar credit ratings? How is that fair to me, a responsible driver, who had some monetary difficulty beyond my control in my early 20's?

Bugeater
03-21-2011, 07:28 PM
There's always going to be a 6th round pick who turns into a Hall of Fame QB like Brady too. That doesn't mean that a team is smart to rest the entire franchise on a 6th round QB. You're talking about the exception, not the rule. What you fail to mention is that if an insurer wrongly assesses the risk and ends up with a high loss ratio because they paid out more losses than they would have if they were smart about their pricing, then the prices for all customers goes up dramatically. They'd have to, in order to recover the cost. In many cases, you put the entire premium pool in danger, especially if your uncompetitive prices are making you lose a lot of your business.

What's worse? Forcing a few exceptions to pay a premium for being unfairly stereotyped? Or forcing the entire group of customers to pay a much higher premium because your insurer has a flawed pricing model to figure out your risk profile?
Hmmm...odd that you'd use the word "stereotype". I just think that after someone has been driving for two damn decades, you should be able to accurately assess their risk from their driving history. I don't know why that is so hard to understand.

pr_capone
03-21-2011, 07:28 PM
There's always going to be a 6th round pick who turns into a Hall of Fame QB like Brady too. That doesn't mean that a team is smart to rest the entire franchise on a 6th round QB. You're talking about the exception, not the rule. What you fail to mention is that if an insurer wrongly assesses the risk and ends up with a high loss ratio because they paid out more losses than they would have if they were smart about their pricing, then the prices for all customers goes up dramatically. They'd have to, in order to recover the cost. In many cases, you put the entire premium pool in danger, especially if your uncompetitive prices are making you lose a lot of your business.

What's worse? Forcing a few exceptions to pay a premium for being unfairly stereotyped? Or forcing the entire group of customers to pay a much higher premium because your insurer has a flawed pricing model to figure out your risk profile?

I often forget, in the age of computers, how difficult it is to pull up a driving record. The sheer amount of willpower and effort it takes to pull one of those to base a decision on is insurmountable.

chiefzilla1501
03-21-2011, 07:30 PM
Agreed 100%.

Fine, my credit sucks (it really doesn't but for the purposes of this post it will) but I have driven claim free for 15 years. Why should I pay the same rate as a person who has filed a claim every 3 years during that same span?

Because we have similar credit ratings? How is that fair to me, a responsible driver, who had some monetary difficulty beyond my control in my early 20's?

Ok, that's a point that I wasn't reading into. Yeah, I agree pricing models from that standpoint are obselete. Though, I would argue that a lot of that is balanced out by rewards insurers are giving out for accident-free drivers these days. And I'm not an actuary, so I wouldn't know, so someone please enlighten me. But if your credit improves over time, your rates should too, right? And if you go accident free over time, your premium should improve too, regardless of your credit?

Because my guess is that if you're older and took a hit on premium, it's because you were assessed as a long-term credit risk, no?

Bugeater
03-21-2011, 07:32 PM
Agreed 100%.

Fine, my credit sucks (it really doesn't but for the purposes of this post it will) but I have driven claim free for 15 years. Why should I pay the same rate as a person who has filed a claim every 3 years during that same span?

Because we have similar credit ratings? How is that fair to me, a responsible driver, who had some monetary difficulty beyond my control in my early 20's?
BECAUSE THE NUMBERS SAY SO!

What bothers me about this is that in the event of a financial crisis, apparently my insurance company will be right there to pour a little salt in the wound even though I've paid in thousands in the last 26 years, and only have one measly claim against me for $350 in 1996.

pr_capone
03-21-2011, 07:36 PM
Ok, that's a point that I wasn't reading into. Yeah, I agree pricing models from that standpoint are obselete. Though, I would argue that a lot of that is balanced out by rewards insurers are giving out for accident-free drivers these days. And I'm not an actuary, so I wouldn't know, so someone please enlighten me. But if your credit improves over time, your rates should too, right? And if you go accident free over time, your premium should improve too, regardless of your credit?

Doubtful that they would... at least they never did for me. Why would the insurance co EVER call someone to let them know that they can pay less now. They would always wait until I called to do their song and dance to keep me around. I remember renewing my insurance and got my "good driver discount" for 3 months, then my rates went back up. Their explanation was that I was still considered a high risk driver and that their rates had gone up for high risk drivers... despite me having their "good driver discount".

It is a scam for the most part. It is all about how much they can take off you up front and how little they can give you if you actually need them.

Bugeater
03-21-2011, 07:37 PM
While we're on the subject, maybe one of you insurance guys can tell me why it is that when I buy a car valued at $10,000 my collision rate is x amount of dollars, and several years later when the car is only valued at half that, my collision rate hasn't gone down?

Or when I replace a 1992 Dodge Caravan with a 1998 Dodge Caravan my liability rate goes up because it's "newer". Can I not do the same amount of damage with the older van?

pr_capone
03-21-2011, 07:40 PM
While we're on the subject, maybe one of you insurance guys can tell me why it is that when I buy a car valued at $10,000 my collision rate is x amount of dollars, and several years later when the car is only valued at half that, my collision rate hasn't gone down?

Or when I replace a 1992 Dodge Caravan with a 1998 Dodge Caravan my liability rate goes up because it's "newer". Can I not do the same amount of damage with the older van?

It is a scam for the most part. It is all about how much they can take off you up front and how little they can give you if you actually need them.

simple as that really

alnorth
03-21-2011, 07:43 PM
My understanding is that different insurance companies weigh different driver "attributes" based on what they value as important. I'm with Nationwide and get a 55% discount right off the top for an excellent credit score (plus other discounts).

My previous carrier was Progressive and while I got a discount for my credit score it was no where near Nationwide's. I had never made a claim while with Progressive for those eight years, yet they couldn't match the rate I got with Nationwide. Too bad. Free money Progressive if you stuck with me. I've not made a claim with Nationwide albeit at a much lower rate, so it's still free money.

I can confirm that Nationwide is one of the most aggressive companies out there in giving discounts for good credit. (I think Travellers is pretty big on credit, too) Conversely, they are also one of the most aggressive in surcharging for bad credit.

In most states, State Farm is probably one of the least aggressive companies I'm aware of in discounting and surcharging for credit.

So, if your credit is good, make sure you include Nationwide when you go shopping. If your credit is lousy, then don't leave out State Farm when you get quotes.

alnorth
03-21-2011, 07:53 PM
I should also add this isn't a binary good/bad big discount/big surcharge thing either. A few companies still have only a few tiers, but most companies these days slice and dice their customers into 10 or 20 different credit classifications ranging from massive surcharge to massive discount.

If your score is close to average and just a little bad or a little good, your discount won't be very far from average. You need to have a truely horrific incredibly bad score, as in bottom 5 or 10% of the population bad, before you start to get slammed. On the other hand if you are one of those few people with the awesome high-700 or 800 type of score, you'll get a jackpot rate from someone. If you don't have much of a credit history (too young, dont believe in credit and pay everything off with cash, whatever) then you'll usually be given the average discount. In some states, the law requires that people with no credit get the average discount.

For most people, say 50-60% of us, your credit score wont do much to your rate, they are usually looking for terrific credit and horrific credit.

If you live in CA, don't worry about it. (Think at least one other state, too) Credit scoring has been arbitrarily banned in that state for insurance.

HonestChieffan
03-21-2011, 07:58 PM
Look ****face, in case you missed it, my wife has worked in the industry for 20 ****ing years, so I have a pretty good goddamn idea how it works. Now go back to DC with all the other dipshit loons like yourself.

Goodness me. I have no interest in you, your personal issues with insurance companies or any other loonie issues you care to throw up.

My comment was not aimed at you personally so take a breather. My point remains that trying to explain the hows and whys of the complex insurance business to those who carry a grudge against the industry is an impossible task. Those who have the hate on will always have it regardless of the best efforts of ethical good people who may try to explain it.

You have every right to your opinions about Insurance companies. They will never change your point of view.

HonestChieffan
03-21-2011, 08:01 PM
While we're on the subject, maybe one of you insurance guys can tell me why it is that when I buy a car valued at $10,000 my collision rate is x amount of dollars, and several years later when the car is only valued at half that, my collision rate hasn't gone down?

Or when I replace a 1992 Dodge Caravan with a 1998 Dodge Caravan my liability rate goes up because it's "newer". Can I not do the same amount of damage with the older van?

I'm not in the insurance business but Id have to think the cost is related to the repair cost. Old beaters cost a lot to replace body panels and labor and paint etc are all inflating while the original car is going down in value.

whoaskew
03-23-2011, 02:33 AM
I have a small painting business and am required to have insurance for my company but cannot even get a quote without giving out my SS#. So I end up being forced to submit my SS# to people that will store it on their computers and I have no idea how dependable they are or how secure their computer systems are. That SUCKS. I have asked the insurance companies I have called to give me a quote for my cost based upon the very worst credit score scenario and they flat out will not do that until you submit your SS# to them. Years back this found its way to the Supreme Court docket in NY and the court found that they could indeed ask for your SS# before giving a quote, basically saying that you did not have to use any particular company and could go else where if you didn't want to give the info they requested. A real catch 22 since they ALL request it for business insurance.


Why don't you use a tax id number instead of your SSN?



Agreed 100%.

Fine, my credit sucks (it really doesn't but for the purposes of this post it will) but I have driven claim free for 15 years. Why should I pay the same rate as a person who has filed a claim every 3 years during that same span?

Because we have similar credit ratings? How is that fair to me, a responsible driver, who had some monetary difficulty beyond my control in my early 20's?


Your base rate will be the same as the other driver, but he will likely be "upcharged" for those accidents. He will pay more than you, if all else is equal.



Hmmm...odd that you'd use the word "stereotype". I just think that after someone has been driving for two damn decades, you should be able to accurately assess their risk from their driving history. I don't know why that is so hard to understand.

Two decades of driving "history" does not tell your driving "risk," it merely tells your driving "history."


Given a long enough timeline, we all have a 100% risk of dying.

Some die sooner than others, but we all die eventually.


The guy who died at 19 is just as dead as the guy who died at 21, even though the second guy had "two damn decades" of living and the first guy didn't.

Lzen
03-23-2011, 06:34 AM
I get that, but it's a screwed up method that penalizes the whole for the actions of some. Like I've already said, it's understandable for those who have little or no driving history, but when you get into your 30s and 40s and you have two or more decades of driving history to base your behavior on, that should be what you are judged by until you prove otherwise.

This. I'm with Bug on this. This practice has pissed me off. But you can't do anything about it since they all do it. Insurance companies are the devil.

Lzen
03-23-2011, 06:45 AM
Two decades of driving "history" does not tell your driving "risk," it merely tells your driving "history."


Given a long enough timeline, we all have a 100% risk of dying.

Some die sooner than others, but we all die eventually.


The guy who died at 19 is just as dead as the guy who died at 21, even though the second guy had "two damn decades" of living and the first guy didn't.

2 decades of good driving history with little to no accidents or tickets will tell them that their risk is low compared to someone with 2 decades of driving history with a lot of accidents/tickets. Why is this so hard for people to understand?

chiefzilla1501
03-23-2011, 05:32 PM
I'm not in the insurance business but Id have to think the cost is related to the repair cost. Old beaters cost a lot to replace body panels and labor and paint etc are all inflating while the original car is going down in value.

I'm only taking stabs in the dark too, but I'd also guess that older cars are more likely to get into accidents too. First, people are less careful. More importantly, I would imagine that the tires and brakes are usually not close to 100% most of the time, along with a whole slew of malfunctions that come with age.

That's just a guess.