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How Allstate’s auto insurance algorithm squeezes big spenders

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Re: How Allstate’s auto insurance algorithm squeezes big spenders

#11

Post by czinck »

leereeves wrote: post #8

> One 36-year-old man from Prince George’s County, Md., who Allstate said in public records should have been paying $3,750 every six months, was instead being charged twice that, more than $7,500. This man was being charged over $15,000/year for auto insurance?

Probably has a DUI or 2. Also possible that they have a car worth a lot, but I think normally that goes through a specialty insurance company, or is just "self-insured" for collision coverage so the value of the car doesn't affect the premium.

Re: How Allstate’s auto insurance algorithm squeezes big spenders

#12

Post by briandear »

leereeves wrote: post #8

> One 36-year-old man from Prince George’s County, Md., who Allstate said in public records should have been paying $3,750 every six months, was instead being charged twice that, more than $7,500. This man was being charged over $15,000/year for auto insurance?

My airplane insurance costs less than that. $15k for auto insurance is insane.

Re: How Allstate’s auto insurance algorithm squeezes big spenders

#13

Post by saber6 »

czinck wrote: post #11
leereeves wrote: post #8

> One 36-year-old man from Prince George’s County, Md., who Allstate said in public records should have been paying $3,750 every six months, was instead being charged twice that, more than $7,500. This man was being charged over $15,000/year for auto insurance?

Probably has a DUI or 2. Also possible that they have a car worth a lot, but I think normally that goes through a specialty insurance company, or is just "self-insured" for collision coverage so the value of the car doesn't affect the premium.

Lol I knew a guy with 2 DUIs and on a SR-22. His insurance was 550/mo with a 1 year old Honda. $1k/mo+ for insurance better be a yacht or a Bugatti or some shit lol.

Re: How Allstate’s auto insurance algorithm squeezes big spenders

#14

Post by Loughla »

dboshardy wrote: post #6
bernardv wrote: post #2

The insurance industry is notoriously afraid of transparency, and the state-based rate filing system makes it too easy to divide and conquer. This is an industry ripe for disruption via total transparency.

Insurers have to publish how they calculate rates and premiums. Every method and justification has to be approved by state regulators before they even enact them. It's one of the most transparent industries already.

I would argue that actuarial tables, equations, and formulas are not necessarily transparent for 95% of the population.

Re: How Allstate’s auto insurance algorithm squeezes big spenders

#15

Post by exhilaration »

The best thing you can do is shop for auto insurance every year or two. The longer you stay with a particular company the more likely they are to very slowly and carefully hit you with small rate increases until you're paying far more than their competitors will charge you. Insurance companies understand and exploit consumer behavior better than even the best marketers.

Re: How Allstate’s auto insurance algorithm squeezes big spenders

#16

Post by samsonasu »

bernardv wrote: post #2

The insurance industry is notoriously afraid of transparency, and the state-based rate filing system makes it too easy to divide and conquer. This is an industry ripe for disruption via total transparency.

I dont think average folks care about transparency, they mostly care about the bottom line. I would bet that if you offered a black-box $50/month with no explanation and a transparent, easily understood $60/month people would choose the cheaper option 9 times out of 9.

Re: How Allstate’s auto insurance algorithm squeezes big spenders

#17

Post by giarc »

czinck wrote: post #11
leereeves wrote: post #8

> One 36-year-old man from Prince George’s County, Md., who Allstate said in public records should have been paying $3,750 every six months, was instead being charged twice that, more than $7,500. This man was being charged over $15,000/year for auto insurance?

Probably has a DUI or 2. Also possible that they have a car worth a lot, but I think normally that goes through a specialty insurance company, or is just "self-insured" for collision coverage so the value of the car doesn't affect the premium.

Would All State still insure a person like that? I thought most well known companies would drop people with DUIs and leave them for lesser known "high risk insurance" companies.

Re: How Allstate’s auto insurance algorithm squeezes big spenders

#18

Post by Ididntdothis »

samsonasu wrote: post #16
bernardv wrote: post #2

The insurance industry is notoriously afraid of transparency, and the state-based rate filing system makes it too easy to divide and conquer. This is an industry ripe for disruption via total transparency.

I dont think average folks care about transparency, they mostly care about the bottom line. I would bet that if you offered a black-box $50/month with no explanation and a transparent, easily understood $60/month people would choose the cheaper option 9 times out of 9.

The problem is that without transparency you can easily be manipulated into thinking that you are getting a good deal. Maybe in your example everybody else is getting a $30 deal but you will never know.

Re: How Allstate’s auto insurance algorithm squeezes big spenders

#19

Post by astura »

leereeves wrote: post #8

> One 36-year-old man from Prince George’s County, Md., who Allstate said in public records should have been paying $3,750 every six months, was instead being charged twice that, more than $7,500. This man was being charged over $15,000/year for auto insurance?

Sounds outrageous but he might be insuring several exotic cars. Obviously, TFA has established that he should be paying less.

Re: How Allstate’s auto insurance algorithm squeezes big spenders

#20

Post by wiremaus »

nradov wrote: post #10
dsfyu404ed wrote: post #9

Earlier quoted context omitted.

They're selling a service that people are required to buy. It should be no surprise that the equilibrium reached is "be as consumer hostile as possible without violating the letter of the law enough to get told to stop"

Technically most states allow drivers to post a surety bond as an alternative to purchasing a liability insurance policy. But in practice most people don't have enough cash available.

A bond also loses you the personal/medical liability protection of auto insurance. Very few people who do have enough money would drive with only a bond, as the risks are pretty extreme.
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