You can adjust for that afterwards. Adjusting beforehand is guilty until proven innocent - Liddle Donnie doesn’t like that.
I was thinking about liability. I don’t buy anything else; it’s not required.
Once again guilty until proven innocent, stereotyping.
The alternative is rebates for those with good performance.
We’re not talking about the difference between Fargo and NYC, but the difference between 10018 and 10019, people who drive the same streets.
I disagree.
Cars were expensive back then compared to the money I had to spend. $750 is a small portion of the total cost. And once you have a car you drive it then spend money along the way.
A matter of risk in business, not criminal charges, presumption of innocence does not apply.
But the article does not discriminate between full coverage and liability only. Doesn’t mention it at all.
Again, not a criminal matter. My be stereotyping, but is statistically proven stereotyping and not illegal.
They don’t need the complication and additional cost of rebates, insurance companies account for that in their rates.
You have the freedom to opt out if you don’t like how they do business. Stop insuring your car. If that is a requirement in your state, stop driving your car and take public transport, walk or ride your bike. Or if NM is like Florida, ride your motorcycle since they are not required to be insured.
Insurance rates are based on odds. If one place has a much larger number of car thefts than another, then odds are better that a car parked in that area will be stolen than if it were parked in a less theft-prone area. If you live there, you’re gonna pay extra even if you haven’t had your car stolen yet.
Regarding the discussion of discrimination, I’ve always wondered why it acceptable to set rates based on sex. If a provable correlation could be shown between race, religion, etc. and car accident claims, would it be OK to set rates based on that, or would it be discriminatory?
I tend to agree location is fair game, though I find it strange there’d be such variation between two adjacent zip codes.
Well, I didn’t just leave it at that, and besides, the rate gap isn’t just for teenagers. In most cases, discrimination is illegal even when there are reasons supported by statistics, but for insurance, that doesn’t seem to apply.
It was an example to try to explain it to you. Liability insurance works the same way. If you live in an area where, statistically, there are a lot of bad drivers causing wrecks, then you’re going to pay more. If you buy an old beat up piece of crap that’s favored by people with 15 DWIs because after the legal costs that’s all they can afford, then you’re going to pay more.
People with low credit ratings often have those low ratings because they made bad choices. Bad choices do not generally happen in a vacuum. If you make bad financial choices, you might make bad vehicular choices. Or you might have those bad choices thrust upon you – i.e. you elect not to repair that bad ball joint because you don’t have any money because all your money is going to pay off credit card debt, and then the ball joint breaks and you lose control and slam into a Lexus. Either way, making bad financial choices does legitimately increase the risk that you will be involved in a wreck.
Because you can’t statistically prove that a person is more likely to get in a wreck solely because he’s black. You can, however, prove that he’s more likely to get in a wreck because people where he lives are more likely to get in wrecks, and because he’s a male.
I agree that there are instances (not just in insurance) where racial profiling is disguised as something legitimate, but there are also instances where something legitimate is maligned as racial profiling. Making blanket statements either way is absurd.
Setting mortgage rates has absolutely nothing to do with setting insurance rates. Setting mortgage rates based on where someone lives rather than based on their ability to pay is asinine. Setting insurance rates for something that will be out in public based on where it will be and what is likely to happen to it when it is there is entirely legitimate.
But the article did not discriminate between the 2 as I posted. If you don’t like it, driving is optional.
As I stated, added cost of business. Who do you think will pay the cost of a “retrospective adjustment?”
Is it fair for you to pay more to compensate for lower rates for poor drivers? If they pay less, you will pay more. Life is not fair and no amount of meddling will ever make it so.
Has EVERYthing to do with liability insurance, that is the entire point of insurance - risk management. You pay them a small amount and THEY accept the risk for your human controlled 3500 lb death machine.
I thought liability insurance paid damages to the victims of the insuree’s bad driving
If this correlation exists it doesn’t prove causation. There are drivers of cheap cars in poor neighborhoods who drive safely.
You can make the correlation, same as for zip code.
It’s an example of discriminating by location that was widely practiced and still is, despite being illegal.
You can correlate whether people pay with location.
Your criteria match auto insurance and mortgages.
Voting and eating in restaurants are optional, too, but we have laws to prevent discrimination in them.
Minor. ACSC did it and offered rates less than half everyone else.
Insurers charge enough to have money left at the end of the year. If they don’t, no rebate. ACSC rebated me every year. (REI and La Montañita do too, though they’re not auto insurers: it’s not an expensive thing to do.)
You get it backwards: poor drivers (which is to say, people who damage others’ person and/or property while driving) pay more because they get no rebate.
Nor is it fair for good drivers in a poorer location to pay more than I do.
car thefts? That was the topic to which I responded.
Wow, that’s quite in-depth; thanks for sharing. I’ll read it in full when I have more time, but from the abstract, it’s interesting that setting rates based on sex is illegal for health insurance (even when certain medical conditions are correlated with sex) but not for auto insurance.
I understand where you’re coming from, but you’re taking pot shots at the situation without suggesting a viable alternative.
Your idea that we should wait to charge people enhanced rates until they screw up is not realistic. The end result of that would be that everyone would pay more because the insurance company needs to make more in premiums than it pays out in losses, and if it can’t charge people in loss-prone areas more until they themselves personally cause or experience a loss, then it has to charge everyone more to cover the inevitable losses.
Put another way, if we reduce your argument to the absurd, you’re telling us that none of us should buy insurance until our first wreck, because there’s absolutely no evidence that we will ever use it.
Not to butt in again but this discussion was started by someone who drives less than 300 miles a year and proud of it. I drive now at least 15,000 a year, down from 30,000 miles, and I have no issue at all with the current system.