Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Allstate used GasBuddy and other apps to track driving behavior: lawsuit

arstechnica.com

Post reply on HN
Print view View original

151–160 of 195 posts

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#151

Post by aziaziazi »

skeeter2020 wrote: post #110
aziaziazi wrote: post #90

Earlier quoted context omitted.

If you drive slower you’ll break smoother. I hate insurances and their hidden shenanigany-like algorithms but at the end it is a fair game I when you look at the big picture. I never owned a car but I feel deeply concerned as I use the road by foot, bike and rentals and am often scared by the drivers usage of the road. You know : texting, updating gps, driving full speed in turns without visibility, taking over as Sc…

>> The speed limit is a LIMIT not a requirement. And don’t start me with "you’re dangerous driving so slow" lol. It certainly is. Speed differential is a huge cause of serious accidents. That can be driving too fast or too slow. Many roads have minimum speeds, and as a commuting cyclist I can tell you the biggest threat is not being able to move with the general flow of traffic. I'm also not sure how you came up with…

I don’t known roads with minimum speed limit here in France but the highway (80km.h). I agree it’s a good idea to respect the min and max limit when they exist. I also 100% agree that its way safer to move at the speed of the flow. I’m also a commuter and don’t engage in flows I can’t follow. However I see too much people on low traffic condition driving at full speed where they couldn’t stop in case of… a deer/cyclist/dizzy child. Things happen and blaming random hazards won’t make the road safer. Slowing down, will.

> slower and smooth breaking being correlated

The energy of a moving object is proportional to the square of the speed, but your braving force is constant. If you want to decelerate from Xkm.h to 0km.h before the deer at 100m ahead, you’ll have a smoother stop if you drive slower. And that don’t even take reaction time into account.

> especially if you do limited driving.

Limited on a daily basis but it’s been 20 years I learned to drive and do it regularly for occasions like week ends, road trips, helping parents, going to buy heavy appliances etc… also riding a bicycle share many thinks with driving a car, a truc or a motorcycle.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#152

Post by nyrikki »

caminante wrote: post #72
nemomarx wrote: post #57

Earlier quoted context omitted.

I guess you could argue that driving near deer at all is still more risk of accidents and damage to the car than a driver who never goes out of their suburb?

Absolutely. Time of day (night driving especially) and speeding are major parameters for hazard avoidance. Minor nit: I expect someone driving in a suburb to pay more in premiums because...deer can't sue you.

90% of drivers consider themselves above average, and where I grew up we had pronghorns, which could pass you and cut in front of you even at 55.

While reducing speed when you see deer is important, you won't see the one you hit.

In my case it jumped over a road barrier from below, it would have been impossible to see.

But human perception is limited, the best drivers I know (not including myself in this) respect their limits.

Urban areas have higher rates because there tend to be more conflicts, it is just mathematics.

Pedestrians, dogs, etc.. all work as replacements for deer above.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#153

Post by caminante »

dghlsakjg wrote: post #139
caminante wrote: post #94

Earlier quoted context omitted.

Generally agree about InsuranceCos, but I don't think your claim is true about profitability of core insurance operations. Their combined ratios (insurance payouts + expenses / premiums collected) are closely tracked by investors and if they're creeping up to 100% without a systemic reason that affects all InsuranceCos, they get a lot of scrutiny. Here's just one lens [0] for home insurance going back to 2004 (~20 ye…

> Here's just one lens [0] for home insurance going back to 2004 (~20 years). It appears that the combined ratios were under 100% for ~8 years. For the other 12 years they were over. 60% of the years were losses. The average is 101.535 for all years in your source. So over 20 years their costs were $101.53 for every $100 in premiums collected. I didn't say that they ALWAYS post losses, I said that it is very common,…

I'm addressing your premise.

>Selling insurance and paying claims is a sort of loss leader for the insurance industry.

Now you say

> I didn't say that they ALWAYS post losses

And

> that insurance premiums are a net money loser for the industry.

This is circular. As for the article, it shows the context that the last couple years have been exceptional and core operations aren't sustainable.

Your reasoning doesn't explain why these companies are cutting coverage, skyrocketing premiums, and leaving markets. They wouldn't be retrenching if the status quo was absorbing losses.

> In 2023, insurers lost money on homeowners coverage in 18 states, more than a third of the country, according to a New York Times analysis of newly available financial data. That’s up from 12 states five years ago, and eight states in 2013. The result is that insurance companies are raising premiums by as much as 50% or more, cutting back on coverage or leaving entire states altogether. Nationally, over the last decade, insurers paid out more in claims than they received in premiums, according to the ratings firm Moody’s, and those losses are increasing. [0]

[0] https://www.wlrn.org/business/2024-05-27/as-insurers-around-...

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#155

Post by bluGill »

josephcsible wrote: post #82
bradleybuda wrote: post #58

Earlier quoted context omitted.

The insurance companies are betting their margins on this. If they are wrong, they will fail in the marketplace.

Since having insurance is mandatory, if they all charge too much, they won't fail.

They do not have a monopoly. There is plenty of room for a handful of companies charging too much to fail. there is also plenty of room for companies charging too little to fail.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#156

Post by dghlsakjg »

s1artibartfast wrote: post #150
dghlsakjg wrote: post #145

Earlier quoted context omitted.

The float in the insurance industry is simply the term of art for the pool of money from premiums paid that is available for investment. On that particular statement, I would look at page 8. The assets are, more or less, the float which comes pretty directly from the liabilities of unearned premiums and estimated future claim payments in the liabilities. It is hardly a coincidence that their unearned premiums + claim…

Okay, so if I'm reading this correctly, annual premium income is around $30 billion, annual insurance payouts is also around $30 billion ( cost of administration). Investment assets under management around 66 billion. This is all right, I still don't see how the insurance business unit add value unless there are profitable years on average. I'll have to check out the letters, maybe they will explain this. Edit: Havin…

Insurance companies' investments come almost entirely from premiums that customers pay. These premiums show up as liabilities on the balance sheet because they represent future claims the company expects to pay out. Think of it this way: customers are paying now for a service (insurance coverage) they might need later.

Let's use an example: If an insurance company has $66 billion in premiums collected, they know they'll likely need to pay out about $66 billion in claims over the coming years. Instead of letting this money sit idle in a bank account, they invest it.

This is where the two sides of an insurance company come into play:

- The underwriting side (selling insurance policies) collects premiums

- The investment side uses these premiums as capital to make investments

It's similar to a loan system, but with a twist. When customers pay premiums, they're essentially "lending" money to the insurance company. This "loan" only gets "repaid" when the customer files a claim. Meanwhile, the insurance company invests the premium money. While they eventually have to pay out claims (repay the "loan"), they get to keep all the investment profits they made.

This explains why insurance companies often continue selling insurance even if they lose a small amount on the underwriting side - it's like getting a very cheap loan. Historical data shows insurance companies lose about 1.5% per year on underwriting. That's their effective borrowing cost, which is much cheaper than other forms of borrowing.

Why don't they just raise prices to make both underwriting and investments profitable? Because insurance is highly price-competitive. Customers will quickly switch companies for a better rate. If Company A tries to make a 2.5% profit on underwriting, while Company B is willing to lose 2.5%, Company B's prices will be 5% lower - and they'll attract more customers, giving them more premium money to invest.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#157

Post by caminante »

s1artibartfast wrote: post #125
caminante wrote: post #94

Earlier quoted context omitted.

Generally agree about InsuranceCos, but I don't think your claim is true about profitability of core insurance operations. Their combined ratios (insurance payouts + expenses / premiums collected) are closely tracked by investors and if they're creeping up to 100% without a systemic reason that affects all InsuranceCos, they get a lot of scrutiny. Here's just one lens [0] for home insurance going back to 2004 (~20 ye…

did you mean [(insurance payouts + expenses) / premiums collected] ?

Sure. I don't think people get tripped up on the OoO in context.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#158

Post by AnthonyMouse »

ryandrake wrote: post #114
BobaFloutist wrote: post #53

Earlier quoted context omitted.

It's true that perfectly accurate crystal balls would render insurance irrelevant. It doesn't strike me as that interesting of a revelation, but it is true.

I guess it's a response to people saying "They need to charge bad drivers more that they do, in proportion to how badly they drive." If insurance could accurately do that, it wouldn't be insurance--it would just be an individualized pre-paid accident savings account.

More to the point, it erodes the value of the system as insurance.

Suppose the insurance thinks that Alice has a 90% probability of an accident and Carol has a 15% probability, so they want to charge Alice six times the premiums of Carol. Then in practice Carol is the one who has the accident and not Alice, because it's not perfect.

But the pool Alice is in is much smaller than the other one, so if they were merged, the combined group would only be paying 10% more than Carol does, which would be serving the purpose of insurance -- spreading risk. Whereas if you separate them, Alice is screwed -- even though she isn't even going to have an accident -- because now she has to pay >$7000/year in insurance rather than ~$1300 when you combine these imperfect predictions with smaller risk pools.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#159

Post by bluGill »

Scoundreller wrote: post #79
orangecat wrote: post #25

Earlier quoted context omitted.

No, because the utility of money isn't linear. It often makes sense to pay a bit more than $1000 to mitigate a 1% chance of losing $100k.

If insurance pricing is perfect, they’ll charge you $100k+ if you’re going to have a $100k claim.

If I'm going to have a $100k claim I'm not going to drive. There is nothing in life worth doing despite it causing a $100k claim. It can wait (or I'll pay for a taxi). However I need to do things and there is a small chance I will do something wrong and thus incure that $100k claim.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#160

Post by teeray »

gruez wrote: post #124
teeray wrote: post #93

Earlier quoted context omitted.

We all do. However, the false premise here is that this data is able to reliably classify drivers into "safe" and "unsafe". If you brake hard, you might save a pedestrian's life. If you don't brake at all, you will kill them. This data lacks context for driver actions to reliably perform that classification. Also, it is also not subject to any kind of appeal where you can bring such other context and facts to bear on…

By that logic should we stop having red light and speed cameras? After all, it's not hard to come up with plausible sounding reasons why you might be forced to speed or run a red light.

It is not “by that logic,” since the comment specifically referenced “this data”, meaning inertial and positional telemetry collected by insurers from apps like Gas Buddy, as the article references. Introducing external speed cameras is a strawman.
Post reply on HN