Insurance......Again

[Tom C]

I'm a licensed insurance agent for one of the major carriers. Just to hit a couple topics from reading over this thread:

1. Credit DOES play a factor in determining your rate but there are a lot of other factors as well. It is calculated into whats called an "Insurance Score." So credit, how long you've had insurance, continuous coverage without a lapse, driving record, limits of liability etc.

2. Insurance companies can't see what you're paying with another carrier but they can see your limits of liability and who you had an how long you had them etc.

3. Part of the rating is determined by the zip code you live in.

4. In general there has been a general rate increase across the board for all insurance companies due to claim frequency and severity. If a company pays more out for claims than premium they're taking in they have to have an increase for everyone even tho you didn't get into an accident. (I know it really sucks, mine went up 20%, try explaining this to irate customers cussing at you)

5. Also one of the biggest reasons for insurance premium increases are due to all the new technology in these cars now a days. Back then fender bender might be a few hundred dollars. Now a days with all the tech, cameras, sensors etc its gonna cost much much more to repair/replace vehicle.

I don't want to get too much in depth but there's a lot of shit that goes with it. But I'm with you guy...insurance is too fucking expensive.

Having retired in 2014 after a 34 year career as an auto claims adjuster, most of it either in the field as an adjuster or inside as a total loss/salvage specialist, I'm in complete agreement with the above.

And as far as credit history is concerned, there is in fact a correlation between personal financial responsibility and responsible driving habits.

Auto insurance, contrary to public perception, is a relative bargain, particularly for the liability portion of the policy. Assume for a moment that a person has 300K in liability coverage. If that person pays $1000 per year for that portion for 25 years, he/she will have spent $25,000. One at fault accident where another party is injured may require a total payment of that $300K which would otherwise have to come out of pocket in the event of a suit.

I'm a firm believer in having as much insurance as possible. I've seen the horrors of having too little.

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[yomamma219]

I'm a firm believer in having as much insurance as possible. I've seen the horrors of having too little.

I was taught the same thing growing up I went just shy of maxing out everything I could with Geico.

I can honestly say I didn't realize how much rates varied by location. I thought my rates were bad since I was shopping insurance right after totally my last car and I'm in the young'n bracket. But jeez it sounds like people are paying twice as much as I am in other areas.

 

[Gee]

So I'm wondering if millionaires who never need a loan for anything have bad credit scores, and therefore get screwed on anything based on a credit score. The whole "credit score" BS seems to be misused at times.

In your scenario those people buy everything cash, no need for credit, but most wealthy people still carry credit cards. The difference is when they buy something for 10's of thousands of dollars, they just pay it off. They'll still have a high score because:

- pays on time
- credit utilization (credit limit vs. amount owed is always 0-15%)
- credit history (average age of accounts)
- zero inquiries
- no bad debt
- credit mix (revolving and installment) This one might lower their score a tiny bit due to not having auto or property mortgages (installment debt), but it's such a small part of the equation that it wouldn't make much impact.

 

[L8APEX]

I pay $250/month for insurance. Flawless record, it is just where I live. I will be buying a JDM Supra soon and I was quoted $450/month for insurance. So remember...it can be worse...

 

[Zimm]

Please stop being pedantic. The fact of the matter is that poorer people WILL spend more on insurance than wealthier people regardless of how you want to present it. Poorer people wont do the loans, poorer people won't do the credit cards. Poorer people wont build the credit rating.

Even those that make sound personal financial decisions, if they don't build credit (say they do their life business mostly or completely in case, which is a recognized sound move), they pay more in insurance. And pity for anyone that gets into any sort of trouble that sees them late with any payments.

You're part of the problem, and you're in too deep to recognize or accept this as fact.

And the FACT of the matter is, that a credit rating means absolutely bupkiss as far as whether or not a driver is safe.

It's bullshit, EOS.

I also work in insurance - you can argue all you want but the statistics say differently. Stop thinking of it as person A with 750 credit score vs person B with 500 - it's very hard to tell which is the better driver. But when you have 500,000 A's with great credit and 500,000 person B's with poor credit, the A group will be in significantly less accidents.

It's not the sole factor, most carriers will look at 20+ different things when determining your rate.

 

[Shouldhavegotthegt]

Please stop being pedantic. The fact of the matter is that poorer people WILL spend more on insurance than wealthier people regardless of how you want to present it. Poorer people wont do the loans, poorer people won't do the credit cards. Poorer people wont build the credit rating.

Even those that make sound personal financial decisions, if they don't build credit (say they do their life business mostly or completely in case, which is a recognized sound move), they pay more in insurance. And pity for anyone that gets into any sort of trouble that sees them late with any payments.

You're part of the problem, and you're in too deep to recognize or accept this as fact.

And the FACT of the matter is, that a credit rating means absolutely bupkiss as far as whether or not a driver is safe.

It's bullshit, EOS.

What's your point. This is just how the system works. I didn't make the system I'm simply guided by the rules in place. If you know how to play the game you'll get ahead much further. We can argue all we want but it's not going to change a thing. I'm not saying I disagree with you but this just how it is.

 

[FranzVonHoffer]

I pay $250/month for insurance. Flawless record, it is just where I live. I will be buying a JDM Supra soon and I was quoted $450/month for insurance. So remember...it can be worse...

That's about the rate I was getting for an e60 M5. I don't feel so bad now.

 

[NoVaGT]

What's your point. This is just how the system works. I didn't make the system I'm simply guided by the rules in place. If you know how to play the game you'll get ahead much further. We can argue all we want but it's not going to change a thing. I'm not saying I disagree with you but this just how it is.

You're quite correct, I must admit.

Doesn't stop me from finding it distasteful.

 

[NoVaGT]

And as far as credit history is concerned, there is in fact a correlation between personal financial responsibility and responsible driving habits.

Correlation is not the same thing as causation. But I understand your point.

 

[AJ ROJO]

Lets face the real fact. Insurance is a business and they exist because they see the potential to do one thing MAKE MONEY PERIOD. All the statistics and factors that go into making a policy for someone is created to line the pockets of shareholders.

Bottom line is the insurance companies will always ensure they find ways of making more money because that is what a business does.

 

[Ctease]

Lets face the real fact. Insurance is a business and they exist because they see the potential to do one thing MAKE MONEY PERIOD. All the statistics and factors that go into making a policy for someone is created to line the pockets of shareholders.

Bottom line is the insurance companies will always ensure they find ways of making more money because that is what a business does.

Insurance is one of the most tightly regulated industries.

Insurance is the private sector's form of socialism. Everyone pays in but only those who need take out. Sure you take a cut to pay employees and investors because without employees and investors it wouldn't exist. And regular Joe would be forced to walk after someone crashes into him.

Sure we could all pay the same premium. No factors to decide, just every pays the same. But there would be no incentive to have good driving history. Just crash and get a new ride. They have to screw people who screw up to protect the fund and to protect the overall premiums.

 

[Ebm]

Insurance... It's illegal not to have it, they fist you and make you pay more when you use it, and those who never use it end up paying a lot of money for nothing. I get the what if scenarios, probabilities, and risks... But humans are results-driven creatures. When you pay for something and get nothing in return, it sucks.

 

[Ctease]

Yup would be nice if voluntary. Number of crashes would not decrease. It would just shift the cost to responsible individuals. They would pay three times more. "They" being middle class. Poor, rich, young and crazy wouldn't pay.

I would be in favor of having insurance savings accounts. You could have IRA style fund. but instead of only withdrawing after 65. You can only withdraw after accident or natural disaster. You would then pay gap insurance. So if the minimum insurance required by State is 50,000 for damage and 100,000 for injury. You would put money into your savings account. It would collect interest or ROI depending on the investment. So if you have 10k saved, you would only be required to obtain 140k of insurance. Over a decade you could save enough in your account, 150k, to stop paying in (you could pay 150k the first day and never pay gap insurance or you could spend 50yrs and never make 150k; it all depends on the individual). At that point you wouldn't need to pay in or pay a premium. After you're too old to drive. You would turn your driver's license into DMV. Then transfer the saved money into a regular account.

 

[blitzburgh]

Moved from Herndon to San Diego 10 years ago. Have never been back lol

 

[Quackfoo]

The reason your insurance coverage is shared is so when claims are put the other company can easily check your coverage. The DMV uses that same database to verify you have coverage when you register your car, and the loan company uses it to make sure your car is properly covered as specified in your loan agreement.

I use Geico myself, about $500 a year cheaper for the same cover I could get anywhere else and the service has been surprisingly good.

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