Back in my insurance days, you didn’t get risk insurance unless you had multiple accidents or multiple violations. Once you have a history of having risk insurance, like a bad credit rating, it can be a long road back again. How many years of clean driving would clean the record? Five, ten?
At any rate I don’t think 10-15% higher premium is all that bad and you have to remember that if you live in a big city, rates will be higher due to higher risk of an accident and theft. Plus the less advantaged, money wise, would be more likely to have a poorer credit rating, and also live in a poorer neighborhood, an apartment, and more likely street parking. So for all the additional risk factors compared to a high income person in a rural area with no violations or accidents, a 15% higher rate wouldn’t seem that bad.
This is an article that is trying to make people angry at insurance companies.
… when she had a clean driving record but transferred from a high risk (non-standard) policy to a standard policy…
If the insured had a high risk policy it was for a reason… she had an accident history. Clean?? But for how long? Time matters. Longevity with your insurance company matters as well. It is a track record they can rely on. Many insurance companies have high risk policies or high risk subsidiaries they send their clients with, say a DUI conviction, to for insurance for a time. Coming back after a time can sometimes get you a better rate than jumping carriers.
Toss in another correlation. Credit score has a high correlation to driving history. Seems a bit strange but its true.
Is it “fair” to use age as a risk factor? Or the type of car driven? With the abundance of ticket dismissal classes in most states, risky drivers can have clean driving records and the insurance companies have to go by something to assess risk so they can give good drivers good deals on insurance.
Make it illegal to consider known risk factors and the good drivers get the same rates as the bad drivers. Is that fair?
It may come to the point where you have to agree to driving with a GPS black box on your car so the insurance company can see just how you drive and how much you drive in order to get the discounted rates.
They already do offer additional discounts if you want the big brother black box in your car.
We got to see how well insurance works when people aren’t charged according to their risk factors (or risk for costing the company money).
The ACA insured costly (risky) people at unreasonably low premiums. Rates went up for nearly everybody and insurers were/are going broke. It was a failed social experiment.
There’s no such thing as a free lunch (Well, at one time there wasn’t, but that’s another debate).
Folks who cost insurers more (risky drivers/risky lifestyles/pre-existing conditions) should pay higher premiums.
Home owners insurance considers things like construction type, building age, fire department ratings and proximity, fireplaces/wood burners, number of claims, etcetera. Folks with more risks pay higher premiums. Folks with lower risks pay less.
People who don’t run up the expenses (careful drivers/health conscious lifestyles, no pre-existing conditions) should pay lower premiums.
CSA
The article points it companies that did not charge more for previous high risk company coverage. IMO, the article provides a heads up who to get quotes from if you have a good driving record and are leaving high risk insurance.
@common_sense_answer, you use pre-existing conditions as a reason to charge someone more for coverage. In many cases, the pre-existing condition is an accident of birth. Should people born to the “wrong” parents suffer rates four time higher (or more) than people born to the “right” parents? It doesn’t work that way for people with employer provided insurance, and everyone should be treated equally in this case. To me, that means basic health insurance costs should be the same for everyone that purchases a specific product without regard to age or pre-existing conditions.
Well this is about car insurance not health insurance but, if you are leaving a high risk insurance policy, by definition you do not have a good driving record. At least at some point in their past.
The idea that everyone should pay the same health insurance premiums regardless of risk is a very nice Utopian idea but as was said, nothing is free. So is it fair for someone without high risk factors to then subsidize through higher premiums, those with the high risk factors? The thing is someone needs to pay for the subsidy, which is what it is. I like the idea of high risk pools for those folks though to take them out of the general pool. Should all cars cost the same? Or all restaurant meals, or all houses?
Traditionally, except for accident injuries, younger people require less medical care that aging people. Everybody gets older, no exceptions. You don’t feel that the older people should pay higher premiums for insurance than younger people?
We have an aging population. We are expecting younger tax payers to subsidize old people’s social security and medical care at an ever increasing rate. It’s not going to work unless the people running up the bills pay more. What’s your solution to that?
It seems with any form of socialism that when you spend other people’s money that at some point they do run out of it. I don’t want to saddle my children with my bills. It just seems to work better when everybody pays for their own stuff.
It costs lots of money to buy, operate, and insure cars. Drivers who demonstrate they pose a risk and/or who live in a higher risk area should pay more. It should not be expected to use somebody else’s money.
CSA
There you go with another logical common sense answer. LOL!
One of the points of the article was that a hypothetical person had an excellent driving record, but for some reason was insured by a high risk auto insurer. You guys assumed that the insured person must have been a high risk at some point. What if her husband was a high risk and they both became insured by the high risk insurer? When she got insurance on her own after a divorce, she could get insurance anywhere. Why should she be penalized for her ex-husbands driving habits if they don’t apply to her anymore? It was not a real example, and I can make up any scenario I like.
As for the charging an aging population more, isn’t that age discrimination? My wife never goes to the doctor. Yes, she is a tween, but in her case it refers to between middle age and um, not quite so middle age. Why can’t she pay what all people that never use a doctor pay? What about young people without pre-existing conditions that use a doctor frequently? Should they pay less than Mrs JT? The purpose of insurance is to spread the risk evenly so that misfortune will not destroy a person’s life.
In some cases, yes. It could only be partly the “wrong” parents’ fault and partly the insured offspring’s fault, but the results are still often higher risks.
Parents who don’t teach their children to respect laws, who condone reckless or risky habits (drinking, gangs, etcetera) or don’t teach healthful lifestyles and good decision making can be producing risky off-spring. It’s not the children’s fault entirely, but the results are the same.
I don’t want to subsidize insurance for somebody who says, “hold my beer” before demonstrating a driving maneuver or somebody living on beer and donuts and not exercising.
Even if you get some bad genes, a life insurance company will refuse coverage in some cases.
There are some folks who shouldn’t be allowed to drive and some that are need to pay more if given a chance. Personal responsibility is necessary and a poor track record follows one choosing to not be responsible, as it should be.
CSA
In regards to that link connecting insurance rates with your credit score . . .
I’ve known good drivers who had a poor credit score
I’ve known lousy drivers who had an excellent credit score
My sister-in-law drives like a demon. She’s got an MD, and my nephew’s 9 years old. Her credit score is very high.
Statistically, she SHOULD be a great driver . . .she’s had a lot of accidents, speeding tickets, etc. her whole life
Seems to me, if a greedy insurance company CAN find an excuse to jack up rates on a driver with a stellar driving record, it WILL do so
Clearly, not all insurance companies behave the same
I had an uncle who became such a bad driver that insurance companies refused to insure him but he posted a very significant cash bond and was allowed to drive. He had an open account at a local body shop where his attorney was able to refer most of his victims. His driving was very limited and rarely drove above 30 mph. Luckily there were never any injuries.
Any system will be inefficient. The question is how we deal with inefficiency. It seems that you want to lower,the price of your insurance without regard to whether someone else is treated unfairly. Mrs JT and I are fortunate that I have health insurance through my employer and it does not discrimainate based on age for premiums. It seems as though you want different treatment for anyone getting insurance through the ACA. That seems unfair to anyone with a pre-existing condition, like being older and not qualifying for Medicare yet.
Not true. I’m in the group who should be charged more based on age.[quote=“jtsanders, post:15, topic:104619”]
It seems as though you want different treatment for anyone getting insurance through the ACA. That seems unfair to anyone with a pre-existing condition, like being older and not qualifying for Medicare yet.
[/quote]
Fair? I pay more for my Medicare than 70% of all Medicare recipients for the same benefits.
Try and complain or negotiate that with the government. The government doesn’t belong in the health care insurance business. (Actually many people in the ACA don’t have insurance. It’s welfare.) One can’t wait until a car accident until he/she purchases insurance, but one can with ACA! No wonder it’s inefficient!
Insurance costs (car, life, home, health) should be negotiated between those wishing to buy it and those who are going to have provide coverage. Will some pay more and some pay less? Sure! Why wouldn’t that be the case?
CSA
The Social Security Administration says that 5% of qualifying seniors pay more than the base $134/month Medicare Part B. The first tier is for individuals that make more than $85,000 and couples that make more than $170,000. The extra Part B premium is $53.50/month and there is an additional charge of $13.30 above base prescription drug coverage. If you are among the fortunate 5%, you can afford the extra $642/year, and congratulations on your success in becoming independently wealthy. I would have to start spending a lot more to get up to that $170,000 modified adjusted gross income level.
Anyway, the base $2664/year I will pay annually for my premium Medicare Advantage program is less than 20% of the full cost of my employer paid plan. It’s quite a bargain and I can easily handle that when I retire soon.
I have.a.friend who could only get auto insurance through the high risk pool. She had.so many speeding tickets that she only kept her license through a.court error. I lost.count of the number of accidents she has had where it was her fault. She was.a.teacher and a non drinker. She is single and needed transportation to her job. Now, I believe she should.pay a.stiff premium for auto insurance. She is about my age and I have had no chargeable accidents and no moving traffic violations. My auto insurance premiums are.low as I chose to.be.a.good driver.
My friend is.no.longer.driving as she now has Parkinson’s disease and.requires constant.medical care. I have good health except for.my feet (I have to wear.orthodics in my shoes and my mouth is full of.crowns and.bridges (my doctor diagnosed my condition as.hoof and.mouth disease). My friend didn’t choose to have Parkinson’s disease and I feel blessed at 75 to have good health. I don’t mind paying higher health insurance premiums to aid those who aren’t as fortunate.
Hold the congratulations! That’s not me. 
I pay more because I don’t have the premiums deducted from my Social Security benefit because I don’t have a Social Security Benefit. Go figure…
The folks that get a break are being “held harmless” by the increases I’ve experienced for the last couple of years. Enjoy! I’m subsidizing you and the other folks! 
I retired with an “employer paid plan” as part of my pension for working and contributing all those years. When I went on Medicare (Which was required by these folks) my coverage took a hit compared with my wife and daughter on the same coverage.
Now I pay for the insurance plan, Medicare, and the additional hit for not being “held harmless” and my coverage is not as good." I pay more than I did before Medicare! A bargain? Not so much in my case. 
Back to car insurance. My rural part of our state enjoys lower insurance rates than the urban parts. (Makes sense… More thefts, more accidents, more poor credit, etcetera, in the urban areas) So our legislators are always trying to raise our insurance in order to lower the urban guys premiums to “even the playing field.”
The problem is that our area has much lower wages, and much higher unemployment, and fewer claims than the urban car owners/operators.
CSA
I dunno, sometimes it just boils down to somethings in life are just not fair or equal. Sometimes you pay a little more than you should and sometimes you get the benefit. Ever been to dinner with friends and just split the bill equally regardless of who had what? That’s the easy way and sometimes you gain and sometimes you lose. If you have a good credit rating but marry someone with a lousy one, guess what, you are unfairly punished even though she’ll have no part of the finances. Businesses try to figure out what they have to do to make a little money because otherwise they won’t be around and we’ll all suffer. So I understand a part of my car insurance will go to pay for someone else’s mishap, but on the other hand it could be me.