How Allstate’s auto insurance algorithm squeezes big spenders • Hacker News Board

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

#91

Post by [deleted] » Tue, Feb 25, 2020, 8:01 PM UTC

RHSeeger wrote: post #35

exhilaration wrote: post #15

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.

I have USAA and can't say enough good things about them. Whenever I call them, they're there to walk through whatever I need with me. The first thing they ask is if everyone is ok; it's trivial, but means something. In general, their rates are really good; it used to be that, when other companies called, you could tell them you have USAA and they're acknowledge they can't match the rates and hang up. Admittedly, not…

[deleted]

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

#92

Post by three_seagrass » Tue, Feb 25, 2020, 8:02 PM UTC

RHSeeger wrote: post #35

exhilaration wrote: post #15

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.

I have USAA and can't say enough good things about them. Whenever I call them, they're there to walk through whatever I need with me. The first thing they ask is if everyone is ok; it's trivial, but means something. In general, their rates are really good; it used to be that, when other companies called, you could tell them you have USAA and they're acknowledge they can't match the rates and hang up. Admittedly, not…

Recently filed a collision claim with USAA. They undershot the original estimate but had no issues paying the full amount for repairs when getting the quote.

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

#93

Post by lotsofpulp » Tue, Feb 25, 2020, 8:05 PM UTC

Loughla wrote: post #14

dboshardy wrote: post #6

Earlier quoted context omitted.

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.

That is just changing the definition of transparency. Transparency means the information is readily available. The math isn't there to obfuscate the information, it is the information.

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

#94

Post by lotsofpulp » Tue, Feb 25, 2020, 8:06 PM UTC

runako wrote: post #21

Loughla wrote: post #14

Earlier quoted context omitted.

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

This is an astute summary of the practical effect of transparency in consumer-facing markets. The information is there, therefore it is transparent. It's sort of on you if you are unwilling take it as a second job and/or hire a suite of professionals to help you understand.

That's not the practical effect of transparency. It's the practical effect of living in a complicated world that must be modeled with math that most people don't know. It is on the populace to learn the math (many resources are available online), or fund people who can evaluate it on their behalf.

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

#95

Post by JKCalhoun » Tue, Feb 25, 2020, 8:11 PM UTC

exhilaration wrote: post #15

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.

They call it the "loyalty tax".

Sad world we live in, right?

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

#96

Post by _bxg1 » Tue, Feb 25, 2020, 8:11 PM UTC

Key blurb because the title is unclear:

> In this case, Allstate’s model seemed to determine how much a customer was willing to pay —or overpay—without defecting, based on how much he or she was already forking out for car insurance.

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

#97

Post by _bxg1 » Tue, Feb 25, 2020, 8:12 PM UTC

exhilaration wrote: post #15

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.

Sounds like a classic case of frog-boiling.

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

#98

Post by sokoloff » Tue, Feb 25, 2020, 8:21 PM UTC

pengaru wrote: post #51

onychomys wrote: post #38

Earlier quoted context omitted.

Well, you're also much less likely to file an airplane claim than an automobile one. You're right that $15k is silly, but I'm not so sure it's the sort of silly you're implying here.

That rationale works for motorcycles, general aviation planes have both a dismal safety record and can destroy an entire home or crash into a sky-scraper, etc.

While technically true, most GA piston airplanes have liability limits of $1MM (sometimes $2MM, rarely more) and often per-passenger [or worse, per-person] sub-limits of $100K, so there's a cap on the liability payment the insurance company is signing up for.

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

#99

Post by jessaustin » Tue, Feb 25, 2020, 8:29 PM UTC

Of all the firms identified in TFA as charging poor customers higher fees, Princeton Review strikes me as the most evil. That single test that determines which colleges you can attend and scholarships you can get? If you're poor, you'll pay more to study for that test. Online. Yikes.

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

#100

Post by JMTQp8lwXL » Tue, Feb 25, 2020, 8:42 PM UTC

JKCalhoun wrote: post #95

exhilaration wrote: post #15

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.

They call it the "loyalty tax". Sad world we live in, right?

I'd imagine each of these companies has a bean counter for growing their subscriber base. When all insurers raise their prices a little on every policy renewal, people will rotate insurers and who's ever in charge of growth looks good due to new sign-ups, it justifies marketing spend, etc.