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This is your friendly reminder that the insurance industry does not generally make money on underwriting. In other words they are losing money on insuring you. Typically the costs of the insurance side of the business are greater than their revenue from premiums. This typically means that insurance actually is a good deal on net. They make their money on investing the float. They can only do that if they attract prem…
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I like it when unsafe drivers pay the costs of the way they endanger all of us.
Once insurance companies can charge perfect premiums, there will be no point in buying insurance at all.
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> It is well-behaved drivers that subside the insurance cost of reckless drivers. People say this but it's not true. Bad drivers have higher premiums, and no one is subsidizing them. It does make sense for good drivers to share, but only if they have opted in.
They do pay higher premiums but that might not be enough to pay for a claim. The economics are often such that you price low risk drivers to subsidize higher risk drivers if realistically pricing the high risk drivers is not economical, i.e. would lead to losing business. It's a balance.
The whole point of insurance is it's a shared risk pool. Arguments like "Bad drivers make YOUR rates go up" just serve to pit customer vs. customer while insurance companies profit.
Earlier quoted context omitted.
I like it when unsafe drivers pay the costs of the way they endanger all of us.
Oh yeah, I loved paying more than the purchase price of the car per year as a young driver. I have since crashed 0 cars, I am yet to kill anyone. In fact, the car mechanically totaled itself before I got to finish my years worth of insurance. On which I never got a refund on. The pay-as-you-drive model might paint a picture of a more equal playing field, where everyone pays what they are due, but I think it is mostly…
Earlier quoted context omitted.
I like it when unsafe drivers pay the costs of the way they endanger all of us.
Once insurance companies can charge perfect premiums, there will be no point in buying insurance at all.
This is your friendly reminder that the insurance industry does not generally make money on underwriting. In other words they are losing money on insuring you. Typically the costs of the insurance side of the business are greater than their revenue from premiums. This typically means that insurance actually is a good deal on net. They make their money on investing the float. They can only do that if they attract prem…
https://www.macrotrends.net/stocks/charts/ALL/allstate/net-i...
Earlier quoted context omitted.
Once insurance companies can charge perfect premiums, there will be no point in buying insurance at all.
On average you will pay more, but not all at once, which may be prohibitively expensive. There will still be value in insurance.
It makes sense to share your data with an insurance provider if you are a well-behaved driver. It is well-behaved drivers that subside the insurance cost of reckless drivers.
First, that the way the insurance company uses the data is accurate. For example, if you work nights, noticing that you drive at night might cause them to raise your rates, because more of the people who drive at night are drunk. You're not drunk, you're just commuting, but now you're getting punished for giving them data.
Second, that you know what "well-behaved" is, because people who know they're being tracked will try to conform to what they think will give them a better score. So now you're focusing your attention on strictly adhering to some mental model of what you think the tracking device wants to see in order to lower your rates instead of leaving that attention to focus on actual hazards. Then you end up having to brake rapidly because you notice an actual hazard too late, which makes the tracking device penalize you more than all of your machinations were helping, or even causes you to get into a collision.
This is Allstate, the house, trying to maintain their edge over their customers, the players. If they get additional info that tells them you are an unsafe driver, then their odds of you not getting into an accident diminish and their goes their premiums, the bets. Yah yah insurance reduces risks instead of adding it like gambling, but the analogies are still there.
I like it when unsafe drivers pay the costs of the way they endanger all of us.
The truth is insurance agencies always want to find a reason to increase your premiums, because the law says you can't just increase the premiums for no reason. Most premiums are lower than what it "needs" to be, so if they find an excuse, they will jack up the premiums.
This is Allstate, the house, trying to maintain their edge over their customers, the players. If they get additional info that tells them you are an unsafe driver, then their odds of you not getting into an accident diminish and their goes their premiums, the bets. Yah yah insurance reduces risks instead of adding it like gambling, but the analogies are still there.
Swerving to avoid road debris or hard braking to avoid a deer as examples of what have cost commercial drivers jobs.
Look at the CDL world for a view into this.
I have 30 years of clean driving records BTW, so not trying to justify risky driving BTW