Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I had to renew my car insurance, and while filling out the forms, and realizing what goes for me and against me in terms of rates and coverage, I can't help but wonder why are the Auto insurance agencies allowed to pick and choose who they want to cover, and how much, when most states, in order to own and drive a vehicle, you have to have some form of coverage.
So, why are they allowed to decide how much to offer depending on your sex, race, age, if you own a home or not, where you reside, etc. Why not just a flat rate, and if you have outstanding moving violations, you get penalized with higher fees. But why punish an elderly driver with a clean record, or singles, or those who rent compared to those who are younger, married or own?
The way I understand it is they rely on statistical data they've accumulated on each of the groups you mentioned to determine rates. The groups with the highest number of claims paid will receive the higher rates. It all has to do with the numbers, nothing more. I guess single people have a higher number of claims. Maybe married people are a little more stable and less likely to take risks on the road? Who knows but they have a lower claim rate.
Before my wife and I married her monthly payment was over $200 for full coverage. Afterward I was able to include her on my policy and it went way down to less than $80. I agree with you that it sucks!
Insurance is nothing more than gambling. The insurance company is betting you will not have an accident, you are betting you will have an accident. They use a formula based on your demographics to determine what the odds are you will have an accident. As the odds increase becsue of your age, where you live or whatever your premiums also increase.
I'm older, have a driving record that is clean for the last 30 years, don't commute to work, have off street parking and live in a semi rural area. The chances of me having an accident are far less than a younger person, living in dense urban are with a very long commute. The fact that they drive daily so much more than me increases the chances they will have an insurance claim before you even get into the other things.
Why would you expect me to pay as much as someone else that is more likely to be involved in an accident?
Factors that increase risk of accident like poor credit, divorce, not owning a home etc are all statistically well documented. Doesn't mean that every person with poor credit has 20 points on their license, that isn't how statistics works. What it means is that certain amounts of deviation from standard becomes much more likely to have accidents and those things get factored into your rate.
The big items in most states are:
Credit score, this is huge and one of the first things they look at to determine your rate in most states
Home ownership, the discount for home owners is low but the rate tiers themselves can exclude you, meaning higher rate, if you aren't a home owners.
Same thing for married or divorced. Most companies will charge you more if you are not married. There isn't a separate item there charging you, the rates simply are higher. You won't qualify for the better rate tiers.
Location. Obviously a big factor.
Driving record. This is one of those things, it is either clean or not for the best rates. Most companies will look back 3-7 year for their best tiers.
Age is also a factor. Starting pushing 75 with some companies and 80 with others and you'll start to see your rates rise like young drivers. The reason should be obvious.
Claims are also a big thing, if you have a lot of windshield claims as an example they'll remove you from the top tiers. Same with accidents and tickets. Even not at fault accidents because even if you aren't at fault you could have habits that cause you to be more likely to hit someone (following to close, playing on your phone etc).
There are other factors but those are the big ones. Some people aren't aware of how many factors go into rating your policy. Every company is different and choose to weigh things differently. Many times there isn't a surcharge on your policy that says "dumbass has bad credit" your rate is just higher because your score doesn't allow you to get into the companies higher, less costly tiers. Same for the other items that impact your rate.
I had an 800 credit score and paid 450 every 6 months. Hadn't missed a payment in 20 years. For some reason, I'm not sure what happened, I was 34 days late on a $200 credit card bill. My credit score went to 705 and my car insurance went to $550 every 6 months.
Insurance companies aren't in the business of paying claims. They are in the business of collecting premiums. If there is an excuse to charge more, they will.
Factors that increase risk of accident like poor credit, divorce, not owning a home etc are all statistically well documented. Doesn't mean that every person with poor credit has 20 points on their license, that isn't how statistics works. What it means is that certain amounts of deviation from standard becomes much more likely to have accidents and those things get factored into your rate.
The big items in most states are:
Credit score, this is huge and one of the first things they look at to determine your rate in most states
Home ownership, the discount for home owners is low but the rate tiers themselves can exclude you, meaning higher rate, if you aren't a home owners.
Same thing for married or divorced. Most companies will charge you more if you are not married. There isn't a separate item there charging you, the rates simply are higher. You won't qualify for the better rate tiers.
Location. Obviously a big factor.
Driving record. This is one of those things, it is either clean or not for the best rates. Most companies will look back 3-7 year for their best tiers.
Age is also a factor. Starting pushing 75 with some companies and 80 with others and you'll start to see your rates rise like young drivers. The reason should be obvious.
Claims are also a big thing, if you have a lot of windshield claims as an example they'll remove you from the top tiers. Same with accidents and tickets. Even not at fault accidents because even if you aren't at fault you could have habits that cause you to be more likely to hit someone (following to close, playing on your phone etc).
There are other factors but those are the big ones. Some people aren't aware of how many factors go into rating your policy. Every company is different and choose to weigh things differently. Many times there isn't a surcharge on your policy that says "dumbass has bad credit" your rate is just higher because your score doesn't allow you to get into the companies higher, less costly tiers. Same for the other items that impact your rate.
Shouldn't consumers have full access to the data inputs auto insurers use to determine rates? I'm sure there is more to "rent vs own" in determining actual risk than the rates indicate. Why should a homeowner who did nothing to earn his ownership - e.g. one who inherited or bought his home with proceeds from winning a lottery - get the same discount as the homeowner who worked for it?
I had to renew my car insurance, and while filling out the forms, and realizing what goes for me and against me in terms of rates and coverage, I can't help but wonder why are the Auto insurance agencies allowed to pick and choose who they want to cover, and how much, when most states, in order to own and drive a vehicle, you have to have some form of coverage.
So, why are they allowed to decide how much to offer depending on your sex, race, age, if you own a home or not, where you reside, etc. Why not just a flat rate, and if you have outstanding moving violations, you get penalized with higher fees. But why punish an elderly driver with a clean record, or singles, or those who rent compared to those who are younger, married or own?
They are rip offs and in cahoots with the states ins comish. Thieves allowed to rob. Who cares what my fico is if I can drive like a stunt driver ?? Thieves
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
