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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

#61

Post by wpietri »

Johnny555 wrote: post #34

I stopped using Allstate years ago -- I mentioned to my agent (this was back when it was still common to actually go see an agent in person to get insurance) that I had a chip in my windshield from a rock and I had to pay to fix it. He said "No, don't pay for it, just make a claim and we'll pay for it no deductable for glass fix since we want you to have a clear windshield". So I made the claim. Then made 2 more clai…

I think high deductibles are an excellent choice for those of us who do well financially. I do that myself. But I should note that 40% of Americans can't handle sudden a $400 expense, so it doesn't work well for everybody: https://www.cbsnews.com/news/nearly-40-of-americans-cant-cov...

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

#62

Post by runawaybottle »

DesiLurker wrote: post #55

how long before others catch on. Imagine your healthcare provider sending you even more outrageous bills depending upon 'the list'.

It’s more likely individual doctors will bill you something large and hope your insurance pays for it.

Maybe you needed some super expensive expensive exam (when you didn’t).

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

#63

Post by wpietri »

unexpected wrote: post #59
inetknght wrote: post #31

Earlier quoted context omitted.

I've been with State Farm for over a decade in Texas. While I agree that I should have spent a hell of a lot more time shopping around, I'll also admit that I have _no idea_ how a lot of insurance works and frankly I don't care to spend that mental budget to learn to game it. My insurance rates are affordable to me and have only ever gone _down_ over the past decade. It even went down after having a collision and cla…

if you've been with State Farm for over a decade, I would reckon you're getting hosed. State Farm agents only get quote from State Farm - they're not an independent brokerage. When I was shopping around (mid-30's, family, standard 2 cars) in the DFW area, they were the most expensive. Go check out an independent insurance agent. It's not "gaming" it literally takes 20-30 minutes, and could save you $1500 over the who…

That seems like a low time estimate to me, because the products being compared are opaque. What insurers promise they'll do and what they actually do when you need them are not always closely tied. So quickly shopping based on price alone encourages companies to shift from visible to invisible costs.

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

#64

Post by uberduber »

bonestamp2 wrote: post #37
Johnny555 wrote: post #34

I stopped using Allstate years ago -- I mentioned to my agent (this was back when it was still common to actually go see an agent in person to get insurance) that I had a chip in my windshield from a rock and I had to pay to fix it. He said "No, don't pay for it, just make a claim and we'll pay for it no deductable for glass fix since we want you to have a clear windshield". So I made the claim. Then made 2 more clai…

We've also switched to higher deductibles since we have only ever made claims when it was a major accident. When I had a chip in my windshield, my agent didn't even know that they covered that "for free". I had to tell her, so I guess it's not widely know. It makes sense though -- it is in their best interest to pay for chip repair without any reason for the customer to avoid it (deductible) since it can avoid a cost…

A sizable portion of the car washes in Los Angeles have an aggressive chip repair salesman who will circle all the chips and aggressively try to sell you on free windshield repair. Guy was always confused and upset about why I wouldn't want to buy something that was free.

Finally one day my windshield had enough chips to be replaced. Guy sees me pulling out my insurance card and goes "Mercury? They don't cover anything!" so now when the guy starts walking over I say "I'm with Mercury" and he immediately moves on.

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

#65

Post by teruakohatu »

swamp40 wrote: post #41

Allstate’s model seemed to determine how much a customer was willing to pay —or overpay—without defecting Welcome to the 21st century. Comcast, Verizon, Toyota, Nabisco - the list goes on and on.

What games do Toyota play?

Here in New Zealand, Toyota dealers no longer negotiate price with consumers, which have gotten a good reception from the public who hate negotiating with car salesmen.

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

#66

Post by Consultant32452 »

uberduber wrote: post #64
bonestamp2 wrote: post #37

Earlier quoted context omitted.

We've also switched to higher deductibles since we have only ever made claims when it was a major accident. When I had a chip in my windshield, my agent didn't even know that they covered that "for free". I had to tell her, so I guess it's not widely know. It makes sense though -- it is in their best interest to pay for chip repair without any reason for the customer to avoid it (deductible) since it can avoid a cost…

A sizable portion of the car washes in Los Angeles have an aggressive chip repair salesman who will circle all the chips and aggressively try to sell you on free windshield repair. Guy was always confused and upset about why I wouldn't want to buy something that was free. Finally one day my windshield had enough chips to be replaced. Guy sees me pulling out my insurance card and goes "Mercury? They don't cover anythi…

I was in my front yard performing an oil change when one of these window chip sales people started bothering me. I literally had to threaten violence to get her to leave my property.

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

#67

Post by Nasrudith »

dsfyu404ed wrote: post #9
pwinnski wrote: post #7

Earlier quoted context omitted.

The complexity seems to be the point. Many states allow complete opacity, and in those states, the companies operate completely opaquely. In states in which information is required to be made public, it's buried in overwhelming detail and hidden behind "change X from 0.04 to 0.007 from sub-reference 37N" language. That's deliberate.

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"

I suspect it is a result of internally misaligned incentives resulting in them valuing new customer money more than existing ones. It is one thing to alienate a loyal smaller base to gain a larger one, it sucks to be on the wrong end of but makes sense. In spite of the obvious that they have equal impact. I suspect it is because of who gets bonuses from it vs blame from losses. If sales and retention are separate departments then sales wins politically because they can generate new customers instead of just stemming losses.

Anyway the reason I think those dynamics instead is because I have seen it in cable, garbage collection, ISPs, and banks. They could be attempting old school dark patterns to exploit inertia and cognitive load in customers but that is a pennywise pound foolish move - the new customers have sales overhead expenses in addition to "maintenance" recurring costs.

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

#68

Post by [deleted] »

wpietri wrote: post #63
unexpected wrote: post #59

Earlier quoted context omitted.

if you've been with State Farm for over a decade, I would reckon you're getting hosed. State Farm agents only get quote from State Farm - they're not an independent brokerage. When I was shopping around (mid-30's, family, standard 2 cars) in the DFW area, they were the most expensive. Go check out an independent insurance agent. It's not "gaming" it literally takes 20-30 minutes, and could save you $1500 over the who…

That seems like a low time estimate to me, because the products being compared are opaque. What insurers promise they'll do and what they actually do when you need them are not always closely tied. So quickly shopping based on price alone encourages companies to shift from visible to invisible costs.

[deleted]

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

#69

Post by vkou »

cortesoft wrote: post #40
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"

There are lots of things we are 'required to buy' - food, shelter, etc. There is still competition, though, and we don't see price gouging in food, for example, just because people have to buy it. If insurance is so overpriced, then why don't other companies enter the market? I don't think insurance companies have crazy profit margins, so I don't think it is really price gouging going on. It might be shady competitiv…

> There are lots of things we are 'required to buy' - food, shelter, etc. There is still competition, though, and we don't see price gouging in food, for example, just because people have to buy it.

No, but we absolutely see price gouging in shelter.

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

#70

Post by [deleted] »

wpietri wrote: post #63
unexpected wrote: post #59

Earlier quoted context omitted.

if you've been with State Farm for over a decade, I would reckon you're getting hosed. State Farm agents only get quote from State Farm - they're not an independent brokerage. When I was shopping around (mid-30's, family, standard 2 cars) in the DFW area, they were the most expensive. Go check out an independent insurance agent. It's not "gaming" it literally takes 20-30 minutes, and could save you $1500 over the who…

That seems like a low time estimate to me, because the products being compared are opaque. What insurers promise they'll do and what they actually do when you need them are not always closely tied. So quickly shopping based on price alone encourages companies to shift from visible to invisible costs.

[deleted]
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