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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

#101

Post by reaperducer »

inetknght wrote: post #31
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'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…

I had State Farm in Texas. I knew I was paying more than other people, but didn't bother to switch.

Then one day while I was on the way to IAH to fly to Europe, an illegal alien in a stolen van (so no license, insurance, etc...) crossed the median and hit me head-on.

State Farm took care of everything. Ev. Ry. Thing. Even made sure I didn't miss the flight.

When I came back to America a couple of weeks later, my completely repaired car was sitting in their parking lot waiting for me. That's why I stick with State Farm, and am OK paying more than I would for "discount" insurance.

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

#102

Post by kccqzy »

lotsofpulp wrote: post #93
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.

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.

All of the laws passed by Congress as well as case laws arising from court proceedings are public. By your definition, our legal system is also very transparent. But that doesn't mean you don't need a lawyer just to navigate this voluminous corpus of information.

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

#103

Post by [deleted] »

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.

[deleted]

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

#104

Post by lostapathy »

lotsofpulp wrote: post #90
noisem4ker wrote: post #74

Earlier quoted context omitted.

In Italy, auto insurance contracts are limited by law to one year in length, so that people are encouraged to re-evaluate their position and get new quotes more often, promoting competition.

I've never seen one longer than 6 months in the US. And I don't even think it's a contract for 6 months, you can cancel anytime and get a refund for the months you don't have it.

One year auto insurance in the US is actually super common. I never had it offerered/suggested to me until I became a homeowner - at which point my broker got me a small discount for doing a full year policy for both home and auto.

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

#105

Post by kccqzy »

vanniv wrote: post #52

This is a terribly misleading headline. The actual story is: they developed a radically different risk model that assigned new rates to everyone, but, in an effort to retain customers, decided to spread increases over multiple years to decrease sticker-shock cancellations. Folks with cheap policies (which are the biggest flight risk, because are good insurance risks and every company wants them) got the increases mor…

> trying to make simple business into some sort of evil scam.

If it's not an evil scam, why have so many states (including Republican business-friendly states) rejected this practice?

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

#106

Post by njx »

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.

This and also do not signup for e-delivery of new policies. I had this on with farmers for home insurance and never realized they had increased the premiums every year. It was my problem that I did not bother to login and check for the documentation section and then open the docs to see the price changes.

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

#107

Post by volkl48 »

kevindong wrote: post #4

How insurers determine your rate is generally available online [0]. That being said, some of the documents are almost unreadable. I recently tried to figure out how I could optimize the amount of renter's insurance coverage I got from State Farm for the premium paid (I'm currently paying the minimum premium that they'll charge for any renter's insurance policy; $125/year) and their posted document was so dense and fi…

> I'm currently paying the minimum premium that they'll charge for any renter's insurance policy; $125/year

Unless that number varies by state, someone may not be being honest with you.

I have a renter's policy with them for $115/yr.

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

#108

Post by jedberg »

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.

Or build a personal relationship with your agent. I occasionally check my rates with competitors, and they can never beat my existing rate. My agent will call us any time there is a new program or discount that might save us money.

My agent understands the value of a long term customer who brings in other long term customers. When we started with him it was because my mother in law was already a customer. We just had car insurance at the time.

But as we moved on in life, we added a second car, then a house, then an umbrella policy, and so on.

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

#109

Post by Johnny555 »

exabrial wrote: post #71
wpietri wrote: post #61

Earlier quoted context omitted.

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...

Oddly enough, high deductibles also work well for those people who maintain their health and prioritize it financially.

But the penalties for deferring maintenance/repairs on your car are less severe than deferring maintenance for your body. No matter what happens to your car, you can throw enough money at it to fix it, or at the very least, replace it with something comparable. If you get into an accident you can tape the bumper back on until you get it repaired (or never repair it)

But if you decide "I can't really afford this $1500 colonoscopy this year, and honey if we defer that $3000 MRI for your abdominal pain to next year too, then we can do them both in one year and hit our deductible"... if you wait too long, something that would have been easy to treat may no longer be easy... or even possible to treat.

People shouldn't need to prioritize health care due to financial reasons.

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

#110

Post by pnutjam »

three_seagrass wrote: post #92
RHSeeger wrote: post #35

Earlier quoted context omitted.

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.

They refused to replace car seats for me when a USAA member hit me.
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