Insurance Fraud(auto) - The Crime YOU Pay For

[SS Trooper]

*** I'm going to speak about auto insurance specifically***

Rant incoming...

Has anyone seen these comercials?

Basically a guy spits crap at you about how insurance fraud is rampant and it costs all the "honest" drivers increased premiums. While I acknowlegde insurance fraud IS a problem, I find these commercials insulting since insurance itself is a bunch of BS.

This is completely up for discussion, and I'm speaking from personal experience, but how can something that is required by government have such ridiculous rules and practices associated with it?

For example, insurance agencies can raise your premium just because your child is of legal driving age. Despite not having a permit to drive. Agencies will raise your premium because you are "due for an accident". They discriminate against race, gender, and age. They profile the type of car you drive, and where you drive it, and even what color it is.

What I'm getting at is that they will do anything and everything to raise your premium as high as possible and you're only options are to shop around for another company to do the same thing, or drive illegally.

Then should you have an accident ( In NY at least) all parties are responsible in some way no matter the circumstances. Which just means everyones insurance is going to go up. That is if your company doesn't drop you for being a "risk"

Am I the only person who finds Insurance to be completely broken?

All of my examples are things that have happened to myself or people I know. Personally my driving record is spotless with no accidents or tickets. I'm not the best driver, but I don't hit shit.

TL/DR : Insurance sucks big donkey balls.

 

[cybrsage]

Can you post insurance companies who raise your rates when you are "due for an accident"? I have never heard of this before.

 

[sactoking]

For example, insurance agencies can raise your premium just because your child is of legal driving age. Despite not having a permit to drive.

That because kids don't let things like not having a license/permit deter them.

Agencies will raise your premium because you are "due for an accident".

100% false.

They discriminate against race, gender, and age.

Depends on where you live.

They profile the type of car you drive,

Typically only if you have collision/OTC coverage.

and where you drive it,

Because that is statistically relevant.

and even what color it is.

False.

 

[Svnla]

At least in the OP case, he does not have to worry about folks driving around without auto insurance as much as we do down here. I had been it by uninsured driver at least one, the other time was hit and run while I parked.

It is estimated that about 20-25% of drivers around here do not have any types of auto insurance.

It is so bad, the government is doing something about it = http://crimeblog.dallasnews.com/2008/12/drivers-without-insurance-will.html/

 

[SS Trooper]

That because kids don't let things like not having a license/permit deter them.

Right, 100% of kids will drive their parents car as soon as they hit 16

100% false.

Then my friends agent must have lied to him instead of explaining the real reason his premium went up.

Depends on where you live.

And that makes it ok?

Typically only if you have collision/OTC coverage.

Only if you have coverage that will actually help you in the event of an accident then.

Because that is statistically relevant.

Why are my driving statistics not rewarded by EVERY company then?

False.

Probably :sneaky:

 

[waggy]

For example, insurance agencies can raise your premium just because your child is of legal driving age. Despite not having a permit to drive. Agencies will raise your premium because you are "due for an accident". They discriminate against race, gender, and age. They profile the type of car you drive, and where you drive it, and even what color it is.

IF you have a child of legal driving age i can understand (went through it it recently). There are plenty of kids that think ok i can drive and do it. even if they do not have a permit. IF the kid is not insured then many get nailed.

Agencies will raise your premium because you are "due for an accident"

This is insane..how can they tell if you are due for a accident? My insurance has decreased EVERY year. It has not gone up for any reason. this is one of the dumbest things i have heard. lol "due for a accident" shit.

They profile the type of car you drive, and where you drive it, and even what color it is

well duh. a person driving a 2012 focus is going to be cheaper to fix/replace then someone driving a 2012 Mercedes. Also the odds on getting in a accident in chicago is greater then getting one in the country. more people more risk.

the color? i have never been asked what color my car is.

 

[cybrsage]

The type of car you drive is important to know how much it will cost to repair it. Thus the more expensive cars are more expensive to insure. This is also why the insurance on an ocean liner is more expensive than that of a sailboat.

Also, some cars are designed to be driven harder and faster than other cars and are mainly purchased by people who drive them harder and faster than other people with less sporty cars. This is the same reason why life insurance for a smoker costs more than that of a non-smoker...more risk involved for the insurance company.

Where you drive it matters as well, because if you drive in a city your odds of having an auto accident are much higher than in the country - there simply are a lot more things to be in an accident with in the city.

Your statistics are not rewarded by every company for the same reason why two stores sell the exact same product for two different prices - because they want you to switch to another company which does reward you for your driving stats.

 

[sactoking]

Right, 100% of kids will drive their parents car as soon as they hit 16

No, but the way policies are worded the insurer has to charge. State regulations and judicial precedent typically require a policy to cover a "household". It has become a matter of public policy that once a child reaches driving age the policy covers them regardless of driving privilege. This coverage comes with a cost.

Then my friends agent must have lied to him instead of explaining the real reason his premium went up.

Probably. Agents typically don't know why coverage costs change; they're not underwriters. Even though agents are licensed you have to remember that they are salespeople first. Many of them don't know jack about insurance other than the very basics.

And that makes it ok?

It depends on where you live. In some states they say that it's not OK and they ban various "discriminatory" rating practices. Other states say that discrimination is OK so long as it is not unreasonable, where reasonableness is measured by statistical significance. Remember, insurance is a discriminatory product in and of itself, so discrimination is not inherently wrong.

Only if you have coverage that will actually help you in the event of an accident then.

If you aren't at fault for an accident you shouldn't be using collision/OTC, you should be using the other driver's liability (unless you're unfortunate enough to live in a no-fault state). So yes, you only get charged by vehicle type for collision/OTC and you only use collision/OTC if you're at fault.

Why are my driving statistics not rewarded by EVERY company then?

It is, you just don't see it. It's inherent in premium banding.

Probably :sneaky:

Definitely. Most (all?) states publish auto rate manuals where you can see the factors that go into your premium.

 

[SS Trooper]

IF you have a child of legal driving age i can understand (went through it it recently). There are plenty of kids that think ok i can drive and do it. even if they do not have a permit. IF the kid is not insured then many get nailed.

Agencies will raise your premium because you are "due for an accident"

This is insane..how can they tell if you are due for a accident? My insurance has decreased EVERY year. It has not gone up for any reason. this is one of the dumbest things i have heard. lol "due for a accident" shit..

This was something that happened to a friend of mine. I loled at it myself. It is more likely that this was a case of a bad agent just trying to get a complaining customer off the phone. I believe he was told the line "due for an accident", but the context is unclear.

They profile the type of car you drive, and where you drive it, and even what color it is

well duh. a person driving a 2012 focus is going to be cheaper to fix/replace then someone driving a 2012 Mercedes. Also the odds on getting in a accident in chicago is greater then getting one in the country. more people more risk.

the color? i have never been asked what color my car is.

Of course that makes sense, but go ahead and get a quote for a Subaru WRX versus a Mitsubishi Lancer or Hundia Sonata. Despite all 3 cars being the same ballpark you will learn the quotes are vastly different. This is due to something I was told by my Agent is an insurance symbol, a number that helps identify the number of big wrecks a particular model of car has encountered.

You sound like you are ok with paying for other peoples decisions or driving records. I am not. Until I prove to be like them, I don't wish to be charged like them. I made it through the risk pool of 16-25, wheres my refund for over paying all those years because their statistics said I would most likely get in an accident?

 

[EagleKeeper]

Your "friend" hears something he does like.

He twists is to not seem that he is bad
You listen and interpret it accordingly.

 

[cubby1223]

Aw shucks.

The 16 year old trying to get his first new car is pissed off he doesn't have the job to afford insurance.

 

[Linux23]

LOL man, i'm with you on that one. I'm 33 now, and ever since I got my license when I was 17, i've been raped on multiple occasions without any lube. I got through the 16-25 just like you. Bought a house just 6 months ago, where's my friggin discount? I mean, what 33 year buys a house in this economy by themselves? Does that not show responsibility in general?

Why is my 09 Maxima ($38K), more expensive to insure than my previous 06 Infiniti M35x with AWD ($52K)?

 

[ericlp]

Insurance ...

Property..Auto..Home..Life..Health..Etc...etc... Is a SCAM. The only way to get around it is to STOP paying for it.

If -EVERYONE- canceled their policies than maybe it would send a wake up call to rich bankers that scare everyone to get it. I own two homes, car, boat, etc...etc... Can you guess how many insurance policies I have? Only one... On my car and I opted out of to pay into "No Fault" and "Uninsured" insurance to get my rates down to about 18 bucks a month. That's all I pay. The only reason I pay it is in case I get stopped by the law to show them I have proof of insurance.

What? Your married? Never tell insurance companies you are married and have kids. That's just stupid. If your married they want your wife to get on your policy as well.

Anyway... I agree that all insurance is a scam but the biggest one is Health Insurance and I'll never pay into that *again* unless it's required by law.

 

[cubby1223]

Insurance ...

Property..Auto..Home..Life..Health..Etc...etc... Is a SCAM. The only way to get around it is to STOP paying for it.

If -EVERYONE- canceled their policies than maybe it would send a wake up call to rich bankers that scare everyone to get it. I own two homes, car, boat, etc...etc... Can you guess how many insurance policies I have? Only one... On my car and I opted out of to pay into "No Fault" and "Uninsured" insurance to get my rates down to about 18 bucks a month. That's all I pay. The only reason I pay it is in case I get stopped by the law to show them I have proof of insurance.

What? Your married? Never tell insurance companies you are married and have kids. That's just stupid. If your married they want your wife to get on your policy as well.

Anyway... I agree that all insurance is a scam but the biggest one is Health Insurance and I'll never pay into that *again* unless it's required by law.

Wow, you are so smart!

 

[cubby1223]

Coming from someone who's mother has worked for an insurance company for 30 years...

Those who complain most about insurance, are always those who draw the most claims from insurance companies.

 

[sactoking]

You sound like you are ok with paying for other peoples decisions or driving records. I am not. Until I prove to be like them, I don't wish to be charged like them. I made it through the risk pool of 16-25, wheres my refund for over paying all those years because their statistics said I would most likely get in an accident?

I don't think you understand how risk-pooling works...

Why is my 09 Maxima ($38K), more expensive to insure than my previous 06 Infiniti M35x with AWD ($52K)?

Unfortunately, it's not enough to say "this car costs more than that car". What is your limit of liability for the mandatory liability coverage on each car? Do you have optional coverage like collision, OTC, UM/UIM, Med/PIP? Are you comparing an '09 now to an '06 now or an '09 now to an '06 three years ago?

 

[actuarial]

Why is my 09 Maxima ($38K), more expensive to insure than my previous 06 Infiniti M35x with AWD ($52K)?

Pretty much every question you ask in this form will have the same answer - because the data collected by the insurance company indicates that a person of your gender, of your age and with your driving history will have a higher expected loss in one car vs another.

How should an insurance company figure out the premium to charge?

 

[actuarial]

Unfortunately, it's not enough to say "this car costs more than that car". What is your limit of liability for the mandatory liability coverage on each car? Do you have optional coverage like collision, OTC, UM/UIM, Med/PIP? Are you comparing an '09 now to an '06 now or an '09 now to an '06 three years ago?

I believe a bigger part of the insurance is liability as opposed to replacement cost (depends on the area, here in Ontario we have very high mandatory liability so YMMV).

As to why a higher end car may mean less chance of liability payout I'm not sure, but I've noticed that trend as have other people I work with.

 

[jstern01]

The type of car you drive is important to know how much it will cost to repair it. Thus the more expensive cars are more expensive to insure. This is also why the insurance on an ocean liner is more expensive than that of a sailboat.

No 100% accurate. One of the factors is how the car is build. For example: my 2006 Toyota Corolla CE (cost new $15K), cost more to insure than my wifes 2007 Hyundai Veracruz Limited (cost new $40K). Because of Toyota Corollas are not as well build, they tend to cost more to fix.

 

[waggy]

What? Your married? Never tell insurance companies you are married and have kids. That's just stupid. If your married they want your wife to get on your policy as well.

the whole post was insane. but this is the little slice i want to talk about.

When i was married and combined insurance it was a good thing. In fact my insurance dropped to the point that paying for mine and my wife's was cheaper then it was BEFORE i got married. oh and it was the same car.

oh and home insurance? on a $150k item i want inurance. i know of 3 houses that have burned down. also i live in a area with tornado's again i want insurance on it.

 

[CycloWizard]

how can something that is required by government have such ridiculous rules and practices associated with it?

Government mandate is precisely why all of these rules exist and why such practices exist. If you were not legally obligated to purchase a service from a company with such inane business practices, why would you?

 

[Wreckem]

Government mandate is precisely why all of these rules exist and why such practices exist. If you were not legally obligated to purchase a service from a company with such inane business practices, why would you?

Insurance isnt mandated in most states. Proof of financial responsibility is.

Proof of financial responsibility is either insurance, or you have a bond worth of the amount of minimum coverage.

 

[Wreckem]

the whole post was insane. but this is the little slice i want to talk about.

When i was married and combined insurance it was a good thing. In fact my insurance dropped to the point that paying for mine and my wife's was cheaper then it was BEFORE i got married. oh and it was the same car.

oh and home insurance? on a $150k item i want inurance. i know of 3 houses that have burned down. also i live in a area with tornado's again i want insurance on it.

Its stupid not to have homeowners insurance the one of the guys above was bragging about. Especially since homeowners is really cheap.

A decent sized hail storm can total a roof.

 

[CycloWizard]

Insurance isnt mandated in most states. Proof of financial responsibility is.

Proof of financial responsibility is either insurance, or you have a bond worth of the amount of minimum coverage.

Which is the same as a mandate for anyone not socking away at least $25k in a bond. Since this is above the net worth of a large number of households (median was $44k last I saw), it amounts to a mandate.

 

[SS Trooper]

I don't think you understand how risk-pooling works...

To the benefit of the insurance company of course. Why stop at age/gender? I'm sure theres some nationality out there that has more accidents than others. Can't think of an example though........()🙂

Until recently I used to drive a '91 Dodge Stealth (O yeah!!!) that thing cost me more in insurance for just liability coverage than the total price of the car when I bought it. I wanna say I was paying $1100 a year for liability. You can defend the means to calculate a premium all you want, but it will aways come back to judging you for other peoples mistakes, accidents, stupidity, and misfortune. Come to think of it, why are insurance companies making money, this sounds like it would work better as a not for profit organization. I'm not sure if I'm serious about that.... quick someone tell me why thats a bad idea.