> [We] comply with state laws and regulations
Said every company that ever failed to comply with state laws and regulations
How Allstate’s auto insurance algorithm squeezes big spenders
111–120 of 167 posts
Re: How Allstate’s auto insurance algorithm squeezes big spenders
#112Earlier 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.
And don't have freak accidents, children with disabilities or other unforeseeable health-related issues.
Re: How Allstate’s auto insurance algorithm squeezes big spenders
#113Earlier 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 is still competition, though, and we don't see price gouging in food, for example, just because people have to buy it.
There's not a law that requires me to buy food, nor a law that requires me to buy specific types of food. I can grow my own food, or buy from other people locally if I wanted to.
> If insurance is so overpriced, then why don't other companies enter the market?
It takes extremely deep pockets to be able to sell insurance in the first place, and it's a relatively regulated industry.
Anyone can grow some tomatoes and sell them to me at a farmers market with minimal overhead. Few can sell me comprehensive insurance that will pay out when I need it.
Re: How Allstate’s auto insurance algorithm squeezes big spenders
#114The 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.
Why is it that almost every company that provides a service with the potential to be in perpetuity, like insurance, always fee creep their customers to the point that you switch because you know you're being fucked compared to what the market "intro rate" for new customers is? You switch only to be back what you were paying before the switch after three months or another time lapse.
When there are few providers in any market, they are colluding to fuck consumers, that are forced into a musical chairs game for little savings.
Re: How Allstate’s auto insurance algorithm squeezes big spenders
#115Earlier 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...
But for people on lower incomes, why would they be better served with low-deductible (and expensive) policies? If they can't afford a sudden $400 expense, why is spending additional money each month for a more comprehensive policy a good idea? Remember, auto insurance doesn't cover mechanical failures. A perfectly valid option is to have a higher deductible, and use offset that with putting the funds that would have…
This sounds painfully like somebody who is not and never has been poor.
Re: How Allstate’s auto insurance algorithm squeezes big spenders
#116The 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 want a product like policygenius.com, but instead of life insurance they have my entire insurance portfolio (auto, home, renters, umbrella, personal property) and constantly price shop for me automatically as a broker between me and every major insurer. I would also like such a product to be structured so that they can never be bought by Intuit or another incumbent, preferably in some sort of employee owned coop mu…
A few months ago I switched insurance. I did some shopping with getjerry.com was very slick, didn’t end up going through them though because of large savings when going directly through the insurance company. Will try them again one year in the future. Saved $1.5K/yr
Re: How Allstate’s auto insurance algorithm squeezes big spenders
#117Earlier 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.
even if you have the cash, it’s very not smart
to do so. you need about a million or so in liability (almost all cases settle under $5mm). insurance is far cheaper.
Re: How Allstate’s auto insurance algorithm squeezes big spenders
#118The 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?
Probably why AAA likes to make a point of how long you've been a member. People don't want to lose that 'status'
Re: How Allstate’s auto insurance algorithm squeezes big spenders
#119Earlier quoted context omitted.
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.
Car insurance is not that opaque. They are fairly standard policies, with only a few optional items. An independent insurance broker can quickly navigate through these for you. You're right, though, that what insures promise to do and what they'll do are two different things - its hard to price that in upfront. I don't think the insurer in question, State Farm, is exceptional in that regard either. They dropped a fam…
Commodities are goods whose properties are standardized and, frequently, graded by an authority. As you give examples of yourself, the real test is what happens long after the initial purchase. Figuring out that side of the bargain takes more than a few minutes getting a price quote.
Car insurance is definitely not like a given electronic item, which is made to the same standards by a single manufacturer. It it's like some nerd purchase, it's more like flash drives. In theory commodities, manufacturers have a complicated set of incentives and the actual quality of the product may be hard to determine without extensive use.
I'm not against people shopping around. If people want to invest the time, by all means do it. But I object to the notion it's as simple as getting a quote. Getting more options can in fact sometimes mean a bad thing if you switch from a proven-reliable product to something that is cheaper up front but worse later.
Re: How Allstate’s auto insurance algorithm squeezes big spenders
#120The 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 wish this was a reality here in BC, Canada, unfortunately our required basic car insurance provider is a crown corporation. So instead of competition we get to pay the highest rates in Canada, incur annual increases despite ZERO claims and finally, watch growing debt because of an inherently flawed insurance model. Good thing we have oceans and mountains..