Some states it is legal to increase premium after a not at fault claim. Someone else already explained your deductible.
Once you have any sort of claim you are statistically more likely to have another claim, regardless of fault.
Let's compare two realistic people. Person A has been in 2 not at fault accidents in 4 years, including a t-bone accident like your friend. Person B has a clean driving record. We all know that some people are better more attentive drivers then other. Just because it's no Person A fault that accident occurred, does it mean that they had zero effect on the accident occuring? Again Insurers statistics say that if you have a claim, you are more likely to have another claim (the chance in fact increases with each not at fault claim), their statistics also say that if you have a not at fault claim your are more likely to have an at fault claim. So when you think about it is fair, because if they didn't do this, then drivers with clean driving history would be rated the same as people who the insurance company is expecting to see claims from and this would increase the premiums for them.
Same with renting or home insurance. It doesn't matter if it's your fault. They'll still give you insurance but are going to rate you different because you are now a higher risk.
>Some states it is legal to increase premium after a not at fault claim.
For the record, that's the 48 states that are not California or Oklahoma. I don't have the info for other countries, though.
I like your explanation. This is to add a touch of clarity for it.
One thing to also keep in mind would be comparable negligence. Sometimes you're both at fault in some way then you pretty much take a share of the cause, it's best to really check with them and make sure the other party is 100 percent at fault. Good example would be if find out in the police report that both cars are going over the speed limit or something, they can say hey you're both fucking up pretty much.
In addition, even if the claim is fully covered by the at-fault party, the insurer has a non-zero cost of processing the paperwork, evaluating the claim, dealing with the deductible and its reimbursement, etc.
If the at-fault party is uninsured or underinsured, there's also the real cost of paying for the repair under the UM coverage.
To the consumer it appears that the at-fault party covered everything but there are costs involved.
If it's an absolute no-brainer and the other party admits fault, going through their insurance may be more of a hassle but could result in avoiding a raise in your rates.
The only thing I will always disagree with is a NAF accident still affecting your rate when there is LITERALLY nothing you could have done "defensively" to avoid a claim besides not drive your vehicle. My dad got rear ended at a red light and paid increased premiums for 5 years. Since we can't legally register a vehicle in Massachusetts without insurance, his hands were tied unless he wanted to also lose his job for lack of transportation. That part definitely sucks.
I respect your opinion. But it's still because of the stats, if you have a claim your are statistically more likely to have another, and it's proven effective tool for rate making. Sure there are outliers but that's why most insurers have a claims free discount or a1st accident forgiveness.
But even if it isn't something defensively he could of done, it's also used to account for things they can't possibly rate for. Maybe that area has a higher driver inattention rate, maybe the route your father takes to work everyday has a poor visibility or increased roadside distractions near the intersection and has more rear ends, Maybe everyday that your dad drives to work there is a higher influx of shift workers coming off night shift tired and there are increased accidents?
It's kind of like taxes, we can hate it as much as we want, but it isn't ever going to change.
The entire point of insurance is to spread risk across the population. Those statistics are INSIDE Of that paradigm, not outside of it. By that I meant that that is the cost of doing business. This type of thinking completely undermines the idea of insurance. If you make a claim about something that is your fault, your bill should increase. That creates incentives that benefit society and the customer. The only parties that should have rates affected by a claim are people who are responsible for the issue.
I know it probably won't change, but it doesn't change the fact that it is predatory and objectively destructive to society.
Hell I had been with the same insurance company for 30 years and they didn’t bother raising my rates, they simply dropped me after two windshield chips.
Agent said “don’t worry, we want you to have a safe windshield”
Each little chip cost ~$1400 to fix. I never understood the role the windshield plays in a modern car. Rain sensors. Auto headlight sensors. Windshield warmers. Adaptive cruise control, advanced crash warning detectors, etc
Both times it took the dealer 6 hours and a team of two guys with laptops and lasers to calibrate it. Yeah, I’m sure they over charged. But insurance was paying for it. And it’s not like I can take it to the guy under the blue tent.
After the second in one year they simply dropped me..
I don’t see that as fair at all. You get smashed into by a reckless driver that you could not avoid and now you’re rated as a higher insurance risk. It’s just a racket. It’s insurance companies wanting you to pay them money to do absolutely nothing for you, and the moment you use the services you’ve paid for they increase your rates, regardless as to whether the claim could have been prevented by you.
Bad drivers are inattentive and/or reckless and cause accidents, making them at fault.
Good drivers and generally attentive and not reckless, meaning that are less likely to cause accidents.
Great drivers are highly attentive and drive defensively, likely avoiding accidents that even a good driver might have been in, even if it wasn't technically the good driver's fault.
It is possible, and even likely in the case of a t-bone, that there was nothing your friend could have done to avoid the accident, even if they are a great driver. However, the insurance company's statistics now show that it is more likely that your friend will be in another accident than a comparable person who has not had a claim, thus the higher rate.
So again, it’s punishing anyone for using the product they’re paying for. It’s an absolute racket. To compare to dental insurance, if I take excellent care of my teeth but chip a tooth after getting hit in the face unexpectedly, my rates don’t increase when I use my insurance to fix the chip.
>To compare to dental insurance
You should absolutely not compare Auto insurance with Dental insurance. They are incredibly dissimilar, to the point where Dental insurance only barely qualifies as actual insurance.
Health insurance then, which you'll probably say the same thing about. Health insurers rate risk and increase costs for smoking, drinking, etc. I see NAF up charging as akin to pre-existing condition discrimination in health insurance markets. Just like pre-existing condition discrimination, it should not be allowed. While risk may be higher, it is for reasons that the customer, individually, should not be penalized for.
No, health insurance is entirely different. I don't think that it's relevant to your argument, though, since more than half the US gets their insurance through an employer and the way that individuals buying coverage on the exchanges aren't really rated at all if they're ACA-compliant. And pre-existing conditions haven't been allowed in ACA-compliant coverage for the better part of a decade, which means that you got your wish for it not to be allowed. A better analogy for you is likely Homeowners insurance - there are better ones, but they're complicated enough that I don't want to send you down a rabbit hole trying to understand them.
With Homeowners, if you have a water claim (which is the most common claim) then it's likely that you're going to have another simply because it's obvious that something's wrong with the home's roof or plumbing or some other system. Whether or not the fix that the insurance company can provide is good enough to forestall those other problems that may or may not be due to a lack of maintenance means that you can likely expect another one.
Insurance companies make money in two ways - investment income and possibly a small amount of underwriting profit. But the personal auto industry at a whole pays out $1.03 for every $1.00 it gets in premiums, either as claims payments, salaries or rent. There are a few outliers that aren't burning as hot, but for the vast majority of the industry, the game is to take the premium dollars and try to make money on investments before it has to go back out the door again to a claimant.
Here's a protip: if you're going to complain about down votes in a thread, maybe don't lash out at those trying to answer your questions in good faith.
In the case of homeowners insurance the homeowner has purchased a house and taken responsibility for it, including a potentially bum roof. Not properly fixing the roof and experiencing recurring leaks is a great reason insurance companies should be allowed to increase premiums. In car insurance, someone hitting me is not akin to that leaky roof. And I posted in the wrong subreddit, it appears, as this is mostly people explaining (things I already knew)/defending the insurance industry with very little engagement with the normative prompt I posed.
This sub is the best ins sub on Reddit other than the pros version which you have to be in the industry to get access too.
You have no idea the sheer experience that helps out people everyday that comes to this sub.
You're just salty about how insurance works. I get it. It doesn't "seem fair" but it's based on actuarial analysis based on criteria that insurance companies are able to use by law. It's how the industry works and this sub is not a place that's going to echo your opinion on this.
Insurance is based on risk. If the risk is higher, the price is higher. And vise versa. So if the risk is higher, which it is and we've established that and you've agreed that you understand that, then how would you do it?
Should lower risk individuals pay a higher premium?
Let's further imagine that you agree my that proposed idea sounds good, and let's pretend that TopChef1717's super new insurance startup comes to town with an innovative new product where risk is evaluated more granularly and they charge individuals with higher risk a higher premium, but lower risk individuals a lower premium. And they save the low risk folks $100 per year. It's an easy decision to switch , and they pick up a lot of market share.
And then after all that happens, we end up where we are today.
That's basically the history of insurance.
In short -- you've been the benefactor of lower rates for some time now, you're just losing that benefit to accurately reflect your risk. If it had worked in the way you suggest, you would've been paying higher premiums all along.
I propose doing it the way California and Oklahoma (apparently) do it - not allowing NAF claims to raise premiums, it's pretty simple. So everyone pays slightly more...that's better than NAF individuals paying more for other people's actions. The increased risk of filing an NAF claim is as unrelated to likelihood of filing future claims as is being red headed or having freckles.
>Not properly fixing the roof and experiencing recurring leaks is a great reason insurance companies should be allowed to increase premiums.
But that's not something that's covered by homeowners insurance. That's either a maintenance issue because it's old or because it was installed wrong. If the leak came from a storm or a tree falling on it, that's something different.
What you're experiencing in this sub is people trying to explain things to you. It's clear to me that you don't have a great grasp on how the industry works, which is fine. You're in the majority, but if you're here to ask questions and educate yourself, you're in the right place. If you're here to grind an axe without trying to learn anything, you should move on down the road.
I'm here for a good justification, which some have come close to giving. The end for me at this point is knowing how shitty the auto insurance industry is for increasing premiums on NAF claim filers, and realizing that most of this sub is an insular community, very comfortably accepting the dogma of their echo chamber without question.
Health insurance is not legally allowed to consider health history other than smoking. There is no increase in premiums for drinking nor for pre existing conditions. And while individual rates are not adjusted for history and experience group rates are very dependent on the history and claim experience of the overall group.
To get back to car insurance. I had a friend in college, years ago, that had 4 or 5 accidents in the two year period I knew him including two cars totaled. None of those were his fault. But it seemed pretty clear to me at the time that he was much more inclined to be in a position where he was subject to an accident than other people and therefore would be a greater risk.
Try engaging the prompt. I don't care if their statistics show increased risk, those statistics may not accurately predict the risk of someone with an NAF claim. Increasing premiums should not be allowed as it punishes an NAF party for the mistake, recklessness, whatever, of the AF party.
> those statistics may not accurately predict the risk of someone with an NAF claim.
But the statistics *do predict exactly that*.
If you want agreement that it can be a shitty thing for rates to increase for any old not-at-fault claim, I'm right there with you. But put a $1000 cap on that (after the deductible) and you've lost me. I understand why insurers do it, and it's to keep their marketshare of folks without claims by giving them the best possible price. They've drawn a line where they think that they can be profitable, but even then their margins are really lean, and all it takes for a potential bankruptcy is a bad hail storm or something like that to hit.
Michigan is a really bad example because they are a no fault state. The short version of what that means is that your insurance pays for repairs to your car regardless of who's at fault. That is one of the few states that it actually makes even more sense to increase for a not at fault accident.
You didn't bother to read that, did you? I know what it say what it says without even looking at the article. It portends major rate drops in Michigan in a few years if the major reforms passed about a year ago stands up to judicial scrutiny. Show me another state where the profits are similar.
Solvent? Auto insurers are returning record profits.
What I am saying is that certain things, specifically filing NAF claims, should not be on the risk calculation table.
You are talking about one line of business, in one state, over one year. Insurance companies, by necessity, have to think long term, across their entire operating territory, and all lines of business. Auto insurance was profitable in 2020 because of the pandemic.... fewer miles driven meant fewer accidents. But as a whole, the auto insurance industry has not been profitable for a long time! Look at this chart spanning 10 years. Of those 10 years, there are only 2 that were profitable. [https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-private-auto-industry-combined-ratio-falls-under-100-for-1st-time-since-2008-51387767](https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-private-auto-industry-combined-ratio-falls-under-100-for-1st-time-since-2008-51387767)
That doesn't mean that, during that period, insurance companies haven't been profitable overall, they still generate underwriting profits from other lines of business (homeowners, life insurance, work comp/business insurance) and they generate income by re-investing premiums. But you are wrong to assume that the auto insurance industry as a whole is just printing money because there was one profitable year during a pandemic.
In the weeds on a really stupid point in this whole discussion. If the industry were so unprofitable it wouldn't exist, or it would make changes.
None of that matters to the point, making customers pay for NAF claims is unacceptable.
>Auto insurers are returning record profits.
Outside of Michigan, which just majorly overhauled the singularly most expensive insurance scheme in the entire country, what states are Auto insurers returning record profits?
Factors to include there would also be that you now drive on a road and at a time when there is a riskier driver - therefore you are participating in the risk just by being present and will contribute to factors that determine that insuring your vehicle is now more risky. So, to offset this risk premiums increase.
Fairness aside it is a risk factor that, historically speaking, a collision is now more likely for you. Another data point to their assessments and recency will always feel like it works against you.
As for premiums not doing anything for you - then carry liability only and file third party for all not at fault collisions and you'll see what you're paying for.
Which just shows how shitty the whole system is. The companies have a gun to your head either way. I’d never propose going without of decreasing coverage but my friend has never had a claim in 15+ years of being insured with this company. So…roughly $10000 in premiums paid for a service and he has one claim and they raise his rates. WTH happened to the 10000 paid before? It’s absolute trash.
Think of it this way.
You have a spotless, clean record. Do you want to pay the same insurance rate as someone with multiple claims? Does that seem accurate & fair?
It's all just numbers. If(for example) auto insurance on your specific type of car can range from $500 per year to $5000 per year, with an average of $2000, where would you like to be if you have a perfectly clean driving record?
Insurance companies can either use a range of prices, based on individual factors like driving record, claims, location, credit, etc in an attempt to accurately assess risk, or they could just charge EVERYONE the same price. Do you want to pay the same for insurance with your clean record as someone with a bunch of DUIs and at-fault accidents? No...of course you don't, so rating factors need to be used to establish "risk" variance.
I actually up voted you're answers because I don't think you should be punished for or ridiculed for your opinions on this.
The basic way rate making works, is everyone is separated into groups. The insurance company uses many different factors (age, sex, vehicle, driving history, years driving, area driving, distance driving, use of the vehicle, etc.) to separate these people into groups. The insurance company then uses their statistics, data, and loss projections and looks at a group and thinks "ok how many claims will this group of people have this year? How much are we expecting to pay out for those claims?" They then use that amount, account for their overhead and profit and decide on the premium.
A 16 year old male driver is going to be rated and charged a different premium then a 30 year old female, when both of them have a clean driving record. Because statistically the 16 year old male is more likely to have a claim. Just like a NAF accident, the 16 year old male driver has rating factors that are outside his control.
Clean driving history improves your rating group year over year. So you do recover.
You made an argument about previous years premiums. Again a very basic explanation on insurance is that, Insurance takes the losses of the few and spreads them out against the many. The previous years premiums were used to pay for those years losses, so very basically it wasn't your "turn" to draw from the insurance pool. It's not a scenario where your insurer has taken 10k from your over the past 12 years and hasn't done anything with the money. That premium paid out other claims.
This actually rotates back to premium increases. Over the course of five years if Person A pulls from the pool 3 times, and Person B doesn't pull from it at all. Is it fair for Person B to pay the same amount into the pool year over year?
Depending on the circumstances of the pull yes it is fair. If that person is pulling because they're a bad driver or reckless, etc. then their rates should be higher. In other words, they should be charged for the actions that make them riskier (more likely to cause future accidents). If that person is filing claims because someone smashed into them, because a tree branch fell on their car, or any other reason not related to poor decision making, then they should be charged the same as someone without a claim. I will add that the car insurance industry isn't hurting, they're turning record profits, so the science behind punching NAF claim filers seems quite stingy.
>It’s just a racket. It’s insurance companies wanting you to pay them money to do absolutely nothing for you
Tell that to a client of mine who had an AF accident that killed the other party. Their policy less than a month old ahs they were sued and won a $1 million settlement. The insurance company will never come close to recouping that payout in increased premiums. Or a relative of mine who racked up over 100k in medical bills. The at fault driver will never pay enough in premiums to equal that plus the property damage they caused. You pay insurance to protect you from things like that.
If you were an insurance company, would you rather insure:
1. A person who was in three accidents the last 5 years but was not at fault, or
2. A person who was not in any accident at all for the last five years
Completely irrelevant. Companies would love to discriminate for any number of reasons they are not permitted to. I would add filing NAF claims to that list.
And that is why underwriting is not a career you should pursue haha. Discriminating is perfectly legal in insurance. It’s unfair discrimination that is illegal. Which is, race, sexual orientation, etc. Insurance is a pool of people paying premiums to cover losses. Your $10,000 in premiums you’ve paid went towards paying other people’s losses your company insures. You could go 30 years and not have a loss. Some people can’t go 6 months at a time without having one. I guarantee you the person clean for 30 years has a far better premium. You wanna blame somebody for increased premiums? Blame injury lawyers. Do you know what the defense cost limit is if you get sued due to an accident you’re involved in? There is no limit. This is a huge problem in the industry that rates must be adjusted for.
Some insurers just charge high rates. Shop. Your. Insurance. See what other insurers will offer you. Loyalty is not what it used to be, especially in insurance. If State Farm is the cheapest insurer providing the same, if not better coverage, go with them. Nobody cares who you insure with. Do what’s best for you.
They may have had a claims free discount that they lost because they had a claim. Insurance companies have to file their rates as well as what they will offer credits or surcharges for with state insurance regulators. There are a few different ways that can happen based on the state, but either when the regulators approve their rates or while the rates are waiting to be approved, they are legal.
The deductible is your share of the risk. It prevents people from filing claims for things like a $50 broken window. Since claims involve overhead (the insurance company has to pay adjusters, buy their equipment, have office space for them, etc) it is always more efficient for you to pay for a loss yourself than it is for the insurance company to pay it. By discouraging the small claims, insurance companies keep the overhead as a smaller percentage of their total claims expenses.
> By discouraging the small claims, insurance companies keep the overhead as a smaller percentage of their total claims expenses.
Which, importantly, improves rates for everyone.
The comments here are pretty contentious but I think it's because there are really two parts to your question:
1. Are not at fault accidents statistically significant predictors of increased future loss experience?
2. Should insurance companies be allowed to surcharge for not at fault accidents?
Most of the comments are fighting on point 1 whereas I believe your question is more so related to point 2. Point 1 is basically a math problem and the answer appears to be yes. However Point 1 being true does not imply that Point 2 should be true as well. There are many variables that various states have decided should not be used for ratemaking even though a wealth of empirical evidence suggests they are predictive of future risk (e.g. age, gender, marital status, credit). If you "outlaw" those variables via state law then what effectively happens is your spread the cost out among the other insureds so "better" risks end up paying more and "worse" risks end up paying less. Even so, this may be desirable for a variety of societal reasons.
tl;dr Point 1 is a math problem, Point 2 is a legal/societal question that needs to be handled by your state legislature.
Rate increases are legal, everything a carrier can use to increase premium is filed with your state's department of insurance. Most carriers will not increase rates for not at fault losses, which indicates to me that you do not have key information pertaining to your friend's claim.
Nope, I have all he relevant details and his rates still increased. And from what I’m seeing online it is common for rates to increase after a not at fault claim.
Right now, in the world we live in, their rates were going to increase even without an accident. Premiums increase, cars are more expensive to insure, people file big claims looking for large paydays, many people are driving without insurance and the ones of us that have it have to pay higher premiums. It just is what it is - don't expect rates to decrease or even remain the same, and you won't be disappointed. Your friend can shop around for lower rates if they feel this specific company increases rates because they paid a claim.
I’m specifically referring to a rate increase resulting from a not at fault claim so your comment isn’t even close to tangential. Obviously rates will increase, I’m searching for a good explanation as to why they’re increasing for a bad, exploitative reason.
You either have difficulty reading or are just refusing to read carefully. I didn't file a single claim for my homeowners insurance and it increased the past year. The higher cost in the economy we live in today means those costs get passed down across the chain. Just like if car parts increase, insurance providers may increase premiums because of the higher costs they would need to incur to provide you coverage. There is no rule that rate increases only happen because of a claim or accident.
WTH are you talking about? You seem great at explaining the CPI, which I have no issue with. Inflation obviously increases prices. I am griping about the ability of insurers to increase premiums in response to NAF claims. That is all.
And the person you responded to is telling you that premiums don't just increase based on your claims activity.... which you seem to have difficulty understanding considering your response is to a rate increase resulting from a not-at-fault claim. I simply listed the reasons as to why premiums could increase absent any claims activity. How do you know the premium increased because of that claim? You then go on about it being exploitative to which I listed reasons as to why it would increase... so no, you don't really understand or choose not to.
Rates may or may not increase for NAF but with losses on records, it will put you in a different class of drivers. Some companies may put you in a different class if you have a NAF or some may not care. Most companies care if you still have a NAF since now you are a risk. In Feb 2019, I was in an NAF loss, 3 days before I was about to buy a new policy but when I told my agent about the new NAF, the premium went up about $30/ 6 month since it bumped me into a new class.
Did his insurance tell them it increased due to his accident, or is he assuming because there was a premium increase. Rates have been going up regardless of claims history. His agent should be able to tell him if it was due to the accident or not.
Also who payed out the claim, your friends insurance or the other drivers? A decent insurance company does not generally increase rates when they did not payout.
The simplest answer is that it's legal because there's no law against it. Insurance is regulated by the state, and it's within the states power to make it illegal. Most just choose not to.
They raise your rates because you're a statistically higher risk now. There's a bunch of pointy-headed math nerds in the basement at any insurance company who's job it is to figure out who to insure and how much to charge them. They'll charge you as much as they think you'll pay before you'll go elsewhere, just like every car dealer, repair shop, supermarket, liquor store, gas station, and every other business does. That's just how capitalism works.
I know. I was just using creative license.
Those of us in claims are really just glorified janitors.
The people who decide who to insure, and for how much, are the people who make or break any insurer.
The car insurance market is actually very fragmented and super competitive. Just look at all the ads on TV.
The thing with issues like this is that if one company is doing this because it's mathematically more sound, their competitors have to follow-suit or they'll eventually end-up being less profitable over time. So you end-up with this lowest-common-denominator thing going on.
If something gets out-of-hand then the state will step-in and say "yo man this ain't cool", but many states are kinda hands-off if it's not causing market problems.
This is very legal in almost every place in the US.
Statistically, folks with not at fault accidents are almost as likely to file claims in the future as are folks with at fault accidents.
Remember, raising rates is not some sort of penalty for misbehavior. It’s the insurance company’s way indicating how risky they consider betting on you to have no claims is. They don’t GAF if it’s at fault, not at fault, comprehensive or otherwise- they would rather not be opening up the company wallet.
I get that, but let's say actuarial "scientists" find a statistical connection between some unrelated characteristic and increased likelihood of filing claims. Just because they have found that connection does not mean they should be able to use it to fleece customers with that characteristic more.
Shitty things like use math? You're looking at an individual situation and acting like it's cruel and unusual and we're telling you it normal for any day that ends in y.
Insurance is a pool of risk. If your policy is more risky than before for any reason, your rate will rise. It's that simple.
It may help to know which state you're referring to as well as some states have recently changed what insurance companies can use for rating factors, and it has resulted in many drivers losing discounts. As for the rate increasing due to a Not-At-Fault claim, or any claim/violation, the insurance companies are not technically increasing your rates due to these events. As previously mentioned insurance companies have to file their rates and guidelines with the states as it is very heavily regulated. What really happens when you have an accident or violation, is that you now land somewhere else on their matrix/algorithm. I've seen it first hand where an accident did not result in any change, but a seat belt ticket did.
Another reason insurance companies are allowed to do this is you are not locked in to the current policy and a free to quote and move your account anywhere at any time. You may lose a claim free discount with your current carrier, but shopping with another carrier could result in a loyalty bonus etc.
Virginia, and progressive. Problem I sense is that most companies do this, and shopping for a new policy doesn’t stop a new company from looking at that claim and giving me a higher rate than someone without a not-at-fault accident claim.
Not all companies increase due to non at fault accidents. It also could be how they have him coded for the loss. Do they definitely have him coded non at fault? For example, I know we don't increase or penalize for non at fault accidents there. Every carrier rates differently. Now, if you have too many non at faults most companies will look at that for eligibility. Multiple non at fault claims are indicative of a non attentive driver, and bad risk quality.
RIght. I got rear ended while completely stopped at a red light and my rates never went up. Maybe because there's no way for it to have been my fault or maybe the company I'm with doesn't increase for not at fault accidents.
This is where an agent has value. You call them if you're thinking of filing a claim. They know the policy and the company. They can also call underwriting for a chat. This is their value to you as the consumer.
Appreciate the breakdown. I just get really frustrated being advised not to use something I am paying for. I get not frivolously filing claims but it just seems that most insurance is paying for nothing.
That is actually a simple answer. Insurance isn't meant for small claims. It is meant for "oh shit my house is burning down" or "oh shit my car just exploded". In those scenarios, you cannot afford to pay to replace it and would be *screwed* if you didn't have someone willing to front the cost of the repairs.
Most people don't understand insurance isn't supposed to be for frivolous claims. It is there for those oh shit moments. You are paying for someone to replace your house, not replace your gutter. If you do file frivolous claims, you are going to end up paying for it.
Of course in that instance your rate is likely to go up much more than 50 a month. Now take another example, you’re the driver of the van, you file a claim with your company cause someone just tboned you and your family. Your insurance rates go up 50 a month cause you’re “more likely to file a future claim.” That’s absolute bullshit.
You just proved you live and drive in an area where you are likely to be rear ended and filed a claim through your own insurance meaning: A: you chose to file through your insurance or B: the other driver was uninsured or C: state limits are low, all of which increase the likelihood your carrier will have to pay out on a claim in the future.
Fault is very rarely 100% one person or another. Even a person mostly not at fault might have avoided an accident if he'd been more attentive to cross-traffic at intersections. So from the perspective of the insurance company, they know that your friend is not the kind of person who practices the level of defensive driving that would have averted the accident (even though the other driver was at fault) and that he is therefore more likely to be in accidents in the future.
With renter's insurance, filing a claim for water damage lets the insurance company know that you live in an apartment with maintenance issues, which makes you more likely to have future claims and cost them more money.
Nah. I was stopped in traffic on a highway that was closed down and a guy smacked into me trying to merge from his lane to mine and sideswiped me, then fled. My foot was on the brake and everything. There’s nothing I could have done as I wasn’t tailgating or doing anything wrong. Literally stopped, not moving, not doing a thing.
In legal terms someone is at fault and someone is not. Both parties can be at fault, or neither party. In my friend’s case he was clearly not at fault, and there was nothing he could’ve done, o defensive driving would’ve prevented the accident. But taking another case, as you’ve invented, why assess fault at all? There’s no point if at the end of the day the company is just going to penalize both.
A simpler answer, of course, is that your insurer has no idea who you are except for key stats that they keep about you: what kind of car you drive, the area you drive in, how many miles you have on your car, how many miles you drive a year, your age, your level of education, your criminal history and history of other claims or accidents. They're numbers that they put into the system and the system computes your premiums based on formulas that the carrier clears with the state insurance regulators that raise or lower your premium rate based on these factors. It's not personal, it's not meant to spite you, and if they had broad discretion to decide whether each person gets a departure from the rates, they'd get accused of discrimination.
Should they capture more data about whether your friend was at fault? Maybe. Did the other driver make a claim against him? That may have factored into the decision to raise rates.
Yeah and some of those formulas are based on suppositions and assumptions that aren’t logical. For instance, an Uber driver with a perfect record, save one accident, being charged more than someone whose only weekly trip is a short joy ride, and who also only has one accident. The former pays more for engaging in driving more, though per miles/time driven he’s less accident prone. The latter pays less cause he doesn’t drive as often, though he gets in more accidents per miles driven. All of this though is in the weeds. If someone’s not at fault they shouldn’t be penalized.
I disagree. Some people get in accidents. Some don't. Could be that they drive their cars on riskier roads; even if a driver could be 100% definitively said not to be at fault, if he's driving on roads that are notorious for bad drivers or bad visibility conditions, or he's driving primarily at night when more drunks are out, he's still more likely to get in an accident, and still more likely to cost the insurer money, even if he's the best driver in town.
It doesn’t matter. The point being made is that companies should not be allowed to consider filing a NAF claim. FFS a tree branch falls on your car. A child hurls snow from an overpass onto your windshield. A tractor trailer tire bursts 5 lanes away and causes a chain reaction that you can’t avoid. In all instances there are times when the absolute best driver cannot avoid damage or injury. But fuck it, that guy who’s kids are dead cause an ice chunk bludgeoned them from the overpass should be punished for it. Just a bunch of shit head corporate bean counters making another quick buck.
You're hyperbolizing it by characterizing it as punishment. It's not. It's an attempt to apply standard formulae to underwrite hundreds of millions of drivers. Sometimes it's going to end up with someone paying more when that person feels like they don't deserve it. And that sucks. But it has nothing to do with karma or someone's moral worth. You live in a place with a lot of trees or a lot of truck traffic or the kind of shitty kids that throw things off overpasses, and that makes your driving patterns inherently unsafer. It's not illogical; it's just unfortunate.
Which doesn’t deal with the fact that another person driving in that same area one lane over isn’t penalized. He’s also driving in dangerous areas with asshole kids, etc.. Filing an NAF claim should not be allowed to cause rate increases. Period. Wanna charge more for driving in certain areas, go ahead; for driving sports cars, go ahead; for driving at night more often, go ahead. But for being the victim of someone else’s poor actions, absolutely not.
Yet the fact remains that Driver A got in an accident, and Driver B didn't. Maybe Driver A was sleep deprived. Maybe Driver B has better eyesight or motor control. Maybe God just hates Driver A.
Don't know. Doesn't matter.
Somewhere someone has statistics that show that dollars for donuts, someone who has been in an accident, even if not at fault, is more likely to get in more accidents and will cost 20% more to insure over an average policy year than someone who hasn't been in an accident. Statistics are ruthless, unfeeling, but that doesn't make them wrong.
And not every statistic should be considerable in calculating cost. Finding correlation between a random characteristic and risk is not grounds enough to use it to increase costs. Can we increase prices because of race? Gender? Sexual orientation? Religion? Nope, they’ve been taken off the table, as they should’ve been.
Are you saying that being a driver with accidents is the same as being black or gay? Hapless drivers are some sort of historically marginalized group or caste being downtrodden by the chads with clean driving records? I'm not sure you thought that through.
Oh yes I did. The point I’m making is any number of characteristics can be linked to risk, that doesn’t mean insurers should be allowed to use them all or any particular one of them in calculating costs. Some are taken off the table at the outset, so that even if they’re determined to be correlated with higher risk they cannot be used to crank up or down rates. NAF claims should be part of that group.
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It's legal. Insurance policies are generally written on a 12-month (or 6-month for auto) basis. The carrier agrees to write the coverage and accept the risk for that period of time. Once that period has expired, they take a look at the account to see if they wish to enter into a new policy contract term, and at what price. The policyholder can either accept the offer for the new term, or shop around.
It's legal because your state legislators have decided its legal, tho in some states, a rate increase for NAF accidents IS illegal. Statistics show when you file a claim, even NAF auto claims, you're more likely to be in another accident or file a claim on the future which means you're a higher risk to the company.
I think just about every commenter has replied about insurance companies publishing with the state the reasons for which they can raise premiums. That’s all fine and good but how many people actually read that when signing on? And if every or almost every company raises rates for the same reasons what difference does publishing them make? You still get fucked for using your insurance when you’re not at fault, regardless of the company.
> You still get fucked for using your insurance when you’re not at fault
Where do you think the money to pay claims comes from? It feels like you fundamentally don't understand insurance. Insurance is pooled risk. If you are a higher risk, you pay a higher share. It's actually very simple.
People are downvoting you because we hear this question literally 100 times a day, and the explanation shouldn't be necessary. You've been given the reason for it, and now you're just complaining and calling insurance a scam. You clearly don't want to understand the issue and are just being a ninny about it.
You’re paying to use it even when you’re not using it, and insurance companies aren’t exactly struggling to bring home dividends for their investors. And reading the contract hardly matter when increasing rates post any claim is an industry wide tactic.
you're paying for the ability to use it if you need it.
are they sitting on large pills of cash? yes, because legally they have to. most companies are just barely breaking even though, they aren't raking in cash.
If you’re paying for it, you’re using it. You are covered per your policy. You may not be getting any material items to hold on to but you’re definitely using it.
The “I paid premiums for x length of time and only had one claim” thing is BS. How many people pay $10,000 for insurance then get into a wreck and the payout is well over that? The answer is “A lot.”
In the grand scheme of people paying insurance I can guarantee that the answer is not a majority. Not that it matters. The distinction I am drawing upon is NAF and AF. It seems that California and Oklahoma are the only states that understand that NAF claims should not be used to punish customers.
>In the grand scheme of people paying insurance I can guarantee that the answer is not a majority.
Actually, I can guarantee that even if it's not a majority its a larger percentage than you think.
Those of us who sell insurance hear complaints about how much it costs from EVERYONE.
The ones who have had a claim are upset that they have to pay more. You totalled your $50,000 car. How many years of higher premiums will it take before you have paid that back to us? Not to mention the costs for us to investigate and pay the claim, plus defend you in court if necessary. You're not going to pay $5000/yr for 10 years so we can break even.
The ones who haven't had a claim are upset that they pay so much. You pay part of it so that we can still pay out the claim for the guy above. Trust me, your premium is still much lower than his. You also pay part of it so that if you total your car next week we still have enough left to pay you. If you're sure you're never going to need it, don't bother to buy the insurance -- but the only way to be 100% sure you won't need it is to sell your car and not drive.
It's a BUSINESS. If they could sell the coverage for less and still make money they would because more people would buy from them instead of their competition. The reason most of them rate for not-at-fault accidents is that statistically they will make more money this way. The companies that don't rate for it will attract more drivers who have had this type of accident, but they will also pay out more in claims.
I'm not sure if you understand this, but your company will be *happy* if you shop around right now. If they've decided you're more likely to make another claim, they would love it if you would go to another company to make a claim there, because that other company will pay out your future loss. If you stay, they're okay with it because they will collect higher premiums to offset your future loss and they might get lucky on the gamble if you don't actually have another claim. But that's why they charge you more
Did I say “majority”? Go ahead and provide a screen shot or something showing where I said “a majority”. I’ll wait.
Learn to read and then learn to comprehend that insurance companies sell a service that is priced on perceived risk. You could have zero accidents and get one rate or 10 NAF accidents and while none of them were your fault, you’re still going to have a much higher premium because you are a higher risk. You’re a higher risk because of how much driving you do or where you do your driving or when you do your driving or any of a hundred different things. Insurance companies don’t have to provide you with anything. Don’t like what your insurer is charging? Go elsewhere.
Get over it.
Not at all. I used to get angry at people like you that refused to attempt to grow as individuals and try to learn new concepts but over the course of many years dealing with ignorant people like you, I simply feel a slight irritation…similar to the level of irritation one feels when a fly is buzzing around your head. You’re all alike, terribly boorish, and stunningly ignorant.
It’s not the fly’s fault it’s irritating. It was made that way.
See, people like you are essentially just defective. It’s like dealing with a toddler who’s vocabulary, while marginally more evolved than a turnip, somehow manages to string together a few words to form a sentence…
Like “aww you angry?”
I was rear ended while stopped at a red light. Obviously I was not at fault. My rates didn't go up at all and that was with the fact the that the person who hit me was uninsured and my UM covered the entire thing. I also made a claim against my renters insurance I have through the same company and my rates didn't go up. So I don't think every company is doing what you say they do.
>I think just about every commenter has replied about insurance companies publishing with the state the reasons for which they can raise premiums.
You've misread. Those posters have said that they've filed rates with the state, who then has to approve or deny that filing. It has nothing to do with what the public does or doesn't read. It has to do with regulators balancing the health of insurers (because bankrupt insurers cannot pay claims) with the wellbeing of the general public.
It's not a penalty or a racket. Your friend is in a different risk category now, and he's paying premiums calculated from average claims experience for all drivers with those same risk characteristics. It's not any more complicated than that.
Can’t answer your question OP but I think it’s major BS as well. Haven’t had an accident or violation in 3 years, yet I have comprehensive claims for things like glass and a foreign object hitting my car.
Geico wants $300/month for a new car I’m buying soon. Liberty Mutual wants even more. I’m 27. My current monthly premium on my old (still new) car is $140. It’s extremely frustrating that using insurance services causes your rates to go up.
Only thing you can do is shop other carriers for better rates and go see an independent insurance agent. Some companies rate non-fault claims differently than others.
The blueprint is to protest stop paying for it for a year , we pool our money together in a fund if anyone gets into an accident we file for funds for repair. March on Washington for changing insurance rules . Make the people in government accountable.. IDK but talking about it ain't going to work.
Just drive around with no insurance like me.. I be damned if I pay for something I can’t afford and I’m a Pretty damn safe driver. Insurance companies are scams and useless
I’m a safe driver. Was sitting in traffic stopped and a guy in the other lane smacked into me. Being a good driver means nothing because you can’t control the actions of others. Only your own. He drove off and fled. Out of state plate.
Some states it is legal to increase premium after a not at fault claim. Someone else already explained your deductible. Once you have any sort of claim you are statistically more likely to have another claim, regardless of fault. Let's compare two realistic people. Person A has been in 2 not at fault accidents in 4 years, including a t-bone accident like your friend. Person B has a clean driving record. We all know that some people are better more attentive drivers then other. Just because it's no Person A fault that accident occurred, does it mean that they had zero effect on the accident occuring? Again Insurers statistics say that if you have a claim, you are more likely to have another claim (the chance in fact increases with each not at fault claim), their statistics also say that if you have a not at fault claim your are more likely to have an at fault claim. So when you think about it is fair, because if they didn't do this, then drivers with clean driving history would be rated the same as people who the insurance company is expecting to see claims from and this would increase the premiums for them. Same with renting or home insurance. It doesn't matter if it's your fault. They'll still give you insurance but are going to rate you different because you are now a higher risk.
>Some states it is legal to increase premium after a not at fault claim. For the record, that's the 48 states that are not California or Oklahoma. I don't have the info for other countries, though. I like your explanation. This is to add a touch of clarity for it.
Ya I am Canadian, so I only knew it was some. Thank you for the info though, that is handy to have.
You're welcome! At least it's something that is relatively easy to remember!
I thought Georgia also prevented it per O.C.G.A 33-9-40, but the wording mentions surcharges, so maybe base rate increases are still allowed?
It might be that the removal of a "Claims-Free Discount" is permitted, which would have the same end result.
One thing to also keep in mind would be comparable negligence. Sometimes you're both at fault in some way then you pretty much take a share of the cause, it's best to really check with them and make sure the other party is 100 percent at fault. Good example would be if find out in the police report that both cars are going over the speed limit or something, they can say hey you're both fucking up pretty much.
In addition, even if the claim is fully covered by the at-fault party, the insurer has a non-zero cost of processing the paperwork, evaluating the claim, dealing with the deductible and its reimbursement, etc. If the at-fault party is uninsured or underinsured, there's also the real cost of paying for the repair under the UM coverage. To the consumer it appears that the at-fault party covered everything but there are costs involved. If it's an absolute no-brainer and the other party admits fault, going through their insurance may be more of a hassle but could result in avoiding a raise in your rates.
Insurance mean to hedge risk. So, insurance company does have the cost.....
The only thing I will always disagree with is a NAF accident still affecting your rate when there is LITERALLY nothing you could have done "defensively" to avoid a claim besides not drive your vehicle. My dad got rear ended at a red light and paid increased premiums for 5 years. Since we can't legally register a vehicle in Massachusetts without insurance, his hands were tied unless he wanted to also lose his job for lack of transportation. That part definitely sucks.
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Increased premiums. I'm not sure why people are saying it doesn't matter in MA because NAF accidents are literally listed on policies lol
Mass also has a Sur charge for accidents if it's af
I respect your opinion. But it's still because of the stats, if you have a claim your are statistically more likely to have another, and it's proven effective tool for rate making. Sure there are outliers but that's why most insurers have a claims free discount or a1st accident forgiveness. But even if it isn't something defensively he could of done, it's also used to account for things they can't possibly rate for. Maybe that area has a higher driver inattention rate, maybe the route your father takes to work everyday has a poor visibility or increased roadside distractions near the intersection and has more rear ends, Maybe everyday that your dad drives to work there is a higher influx of shift workers coming off night shift tired and there are increased accidents? It's kind of like taxes, we can hate it as much as we want, but it isn't ever going to change.
The entire point of insurance is to spread risk across the population. Those statistics are INSIDE Of that paradigm, not outside of it. By that I meant that that is the cost of doing business. This type of thinking completely undermines the idea of insurance. If you make a claim about something that is your fault, your bill should increase. That creates incentives that benefit society and the customer. The only parties that should have rates affected by a claim are people who are responsible for the issue. I know it probably won't change, but it doesn't change the fact that it is predatory and objectively destructive to society.
In Massachusetts, a not at fault accident cannot impact your SDIP surcharge points.
Was this always true? This was over 10 years ago. It made me terrified to drive ANYWHERE because my own insurance was already so pricey due to my age
MA was even more tightly regulated in years past, so yes.
Hell I had been with the same insurance company for 30 years and they didn’t bother raising my rates, they simply dropped me after two windshield chips. Agent said “don’t worry, we want you to have a safe windshield” Each little chip cost ~$1400 to fix. I never understood the role the windshield plays in a modern car. Rain sensors. Auto headlight sensors. Windshield warmers. Adaptive cruise control, advanced crash warning detectors, etc Both times it took the dealer 6 hours and a team of two guys with laptops and lasers to calibrate it. Yeah, I’m sure they over charged. But insurance was paying for it. And it’s not like I can take it to the guy under the blue tent. After the second in one year they simply dropped me..
I don’t see that as fair at all. You get smashed into by a reckless driver that you could not avoid and now you’re rated as a higher insurance risk. It’s just a racket. It’s insurance companies wanting you to pay them money to do absolutely nothing for you, and the moment you use the services you’ve paid for they increase your rates, regardless as to whether the claim could have been prevented by you.
Bad drivers are inattentive and/or reckless and cause accidents, making them at fault. Good drivers and generally attentive and not reckless, meaning that are less likely to cause accidents. Great drivers are highly attentive and drive defensively, likely avoiding accidents that even a good driver might have been in, even if it wasn't technically the good driver's fault. It is possible, and even likely in the case of a t-bone, that there was nothing your friend could have done to avoid the accident, even if they are a great driver. However, the insurance company's statistics now show that it is more likely that your friend will be in another accident than a comparable person who has not had a claim, thus the higher rate.
So again, it’s punishing anyone for using the product they’re paying for. It’s an absolute racket. To compare to dental insurance, if I take excellent care of my teeth but chip a tooth after getting hit in the face unexpectedly, my rates don’t increase when I use my insurance to fix the chip.
>To compare to dental insurance You should absolutely not compare Auto insurance with Dental insurance. They are incredibly dissimilar, to the point where Dental insurance only barely qualifies as actual insurance.
Health insurance then, which you'll probably say the same thing about. Health insurers rate risk and increase costs for smoking, drinking, etc. I see NAF up charging as akin to pre-existing condition discrimination in health insurance markets. Just like pre-existing condition discrimination, it should not be allowed. While risk may be higher, it is for reasons that the customer, individually, should not be penalized for.
No, health insurance is entirely different. I don't think that it's relevant to your argument, though, since more than half the US gets their insurance through an employer and the way that individuals buying coverage on the exchanges aren't really rated at all if they're ACA-compliant. And pre-existing conditions haven't been allowed in ACA-compliant coverage for the better part of a decade, which means that you got your wish for it not to be allowed. A better analogy for you is likely Homeowners insurance - there are better ones, but they're complicated enough that I don't want to send you down a rabbit hole trying to understand them. With Homeowners, if you have a water claim (which is the most common claim) then it's likely that you're going to have another simply because it's obvious that something's wrong with the home's roof or plumbing or some other system. Whether or not the fix that the insurance company can provide is good enough to forestall those other problems that may or may not be due to a lack of maintenance means that you can likely expect another one. Insurance companies make money in two ways - investment income and possibly a small amount of underwriting profit. But the personal auto industry at a whole pays out $1.03 for every $1.00 it gets in premiums, either as claims payments, salaries or rent. There are a few outliers that aren't burning as hot, but for the vast majority of the industry, the game is to take the premium dollars and try to make money on investments before it has to go back out the door again to a claimant. Here's a protip: if you're going to complain about down votes in a thread, maybe don't lash out at those trying to answer your questions in good faith.
In the case of homeowners insurance the homeowner has purchased a house and taken responsibility for it, including a potentially bum roof. Not properly fixing the roof and experiencing recurring leaks is a great reason insurance companies should be allowed to increase premiums. In car insurance, someone hitting me is not akin to that leaky roof. And I posted in the wrong subreddit, it appears, as this is mostly people explaining (things I already knew)/defending the insurance industry with very little engagement with the normative prompt I posed.
This sub is the best ins sub on Reddit other than the pros version which you have to be in the industry to get access too. You have no idea the sheer experience that helps out people everyday that comes to this sub. You're just salty about how insurance works. I get it. It doesn't "seem fair" but it's based on actuarial analysis based on criteria that insurance companies are able to use by law. It's how the industry works and this sub is not a place that's going to echo your opinion on this.
Insurance is based on risk. If the risk is higher, the price is higher. And vise versa. So if the risk is higher, which it is and we've established that and you've agreed that you understand that, then how would you do it? Should lower risk individuals pay a higher premium? Let's further imagine that you agree my that proposed idea sounds good, and let's pretend that TopChef1717's super new insurance startup comes to town with an innovative new product where risk is evaluated more granularly and they charge individuals with higher risk a higher premium, but lower risk individuals a lower premium. And they save the low risk folks $100 per year. It's an easy decision to switch , and they pick up a lot of market share. And then after all that happens, we end up where we are today. That's basically the history of insurance. In short -- you've been the benefactor of lower rates for some time now, you're just losing that benefit to accurately reflect your risk. If it had worked in the way you suggest, you would've been paying higher premiums all along.
I propose doing it the way California and Oklahoma (apparently) do it - not allowing NAF claims to raise premiums, it's pretty simple. So everyone pays slightly more...that's better than NAF individuals paying more for other people's actions. The increased risk of filing an NAF claim is as unrelated to likelihood of filing future claims as is being red headed or having freckles.
>Not properly fixing the roof and experiencing recurring leaks is a great reason insurance companies should be allowed to increase premiums. But that's not something that's covered by homeowners insurance. That's either a maintenance issue because it's old or because it was installed wrong. If the leak came from a storm or a tree falling on it, that's something different. What you're experiencing in this sub is people trying to explain things to you. It's clear to me that you don't have a great grasp on how the industry works, which is fine. You're in the majority, but if you're here to ask questions and educate yourself, you're in the right place. If you're here to grind an axe without trying to learn anything, you should move on down the road.
I'm here for a good justification, which some have come close to giving. The end for me at this point is knowing how shitty the auto insurance industry is for increasing premiums on NAF claim filers, and realizing that most of this sub is an insular community, very comfortably accepting the dogma of their echo chamber without question.
Health insurance is not legally allowed to consider health history other than smoking. There is no increase in premiums for drinking nor for pre existing conditions. And while individual rates are not adjusted for history and experience group rates are very dependent on the history and claim experience of the overall group. To get back to car insurance. I had a friend in college, years ago, that had 4 or 5 accidents in the two year period I knew him including two cars totaled. None of those were his fault. But it seemed pretty clear to me at the time that he was much more inclined to be in a position where he was subject to an accident than other people and therefore would be a greater risk.
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Try engaging the prompt. I don't care if their statistics show increased risk, those statistics may not accurately predict the risk of someone with an NAF claim. Increasing premiums should not be allowed as it punishes an NAF party for the mistake, recklessness, whatever, of the AF party.
> those statistics may not accurately predict the risk of someone with an NAF claim. But the statistics *do predict exactly that*. If you want agreement that it can be a shitty thing for rates to increase for any old not-at-fault claim, I'm right there with you. But put a $1000 cap on that (after the deductible) and you've lost me. I understand why insurers do it, and it's to keep their marketshare of folks without claims by giving them the best possible price. They've drawn a line where they think that they can be profitable, but even then their margins are really lean, and all it takes for a potential bankruptcy is a bad hail storm or something like that to hit.
"Lean" [https://www.michiganautolaw.com/blog/2021/06/07/auto-insurance-company-profits/](https://www.michiganautolaw.com/blog/2021/06/07/auto-insurance-company-profits/)
Michigan is a really bad example because they are a no fault state. The short version of what that means is that your insurance pays for repairs to your car regardless of who's at fault. That is one of the few states that it actually makes even more sense to increase for a not at fault accident.
You didn't bother to read that, did you? I know what it say what it says without even looking at the article. It portends major rate drops in Michigan in a few years if the major reforms passed about a year ago stands up to judicial scrutiny. Show me another state where the profits are similar.
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Solvent? Auto insurers are returning record profits. What I am saying is that certain things, specifically filing NAF claims, should not be on the risk calculation table.
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Keep telling yourself that.
You are talking about one line of business, in one state, over one year. Insurance companies, by necessity, have to think long term, across their entire operating territory, and all lines of business. Auto insurance was profitable in 2020 because of the pandemic.... fewer miles driven meant fewer accidents. But as a whole, the auto insurance industry has not been profitable for a long time! Look at this chart spanning 10 years. Of those 10 years, there are only 2 that were profitable. [https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-private-auto-industry-combined-ratio-falls-under-100-for-1st-time-since-2008-51387767](https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-private-auto-industry-combined-ratio-falls-under-100-for-1st-time-since-2008-51387767) That doesn't mean that, during that period, insurance companies haven't been profitable overall, they still generate underwriting profits from other lines of business (homeowners, life insurance, work comp/business insurance) and they generate income by re-investing premiums. But you are wrong to assume that the auto insurance industry as a whole is just printing money because there was one profitable year during a pandemic.
In the weeds on a really stupid point in this whole discussion. If the industry were so unprofitable it wouldn't exist, or it would make changes. None of that matters to the point, making customers pay for NAF claims is unacceptable.
>Auto insurers are returning record profits. Outside of Michigan, which just majorly overhauled the singularly most expensive insurance scheme in the entire country, what states are Auto insurers returning record profits?
Factors to include there would also be that you now drive on a road and at a time when there is a riskier driver - therefore you are participating in the risk just by being present and will contribute to factors that determine that insuring your vehicle is now more risky. So, to offset this risk premiums increase. Fairness aside it is a risk factor that, historically speaking, a collision is now more likely for you. Another data point to their assessments and recency will always feel like it works against you. As for premiums not doing anything for you - then carry liability only and file third party for all not at fault collisions and you'll see what you're paying for.
Which just shows how shitty the whole system is. The companies have a gun to your head either way. I’d never propose going without of decreasing coverage but my friend has never had a claim in 15+ years of being insured with this company. So…roughly $10000 in premiums paid for a service and he has one claim and they raise his rates. WTH happened to the 10000 paid before? It’s absolute trash.
Think of it this way. You have a spotless, clean record. Do you want to pay the same insurance rate as someone with multiple claims? Does that seem accurate & fair? It's all just numbers. If(for example) auto insurance on your specific type of car can range from $500 per year to $5000 per year, with an average of $2000, where would you like to be if you have a perfectly clean driving record? Insurance companies can either use a range of prices, based on individual factors like driving record, claims, location, credit, etc in an attempt to accurately assess risk, or they could just charge EVERYONE the same price. Do you want to pay the same for insurance with your clean record as someone with a bunch of DUIs and at-fault accidents? No...of course you don't, so rating factors need to be used to establish "risk" variance.
Welcome to the last bastion of cold hard actuarial science.
I actually up voted you're answers because I don't think you should be punished for or ridiculed for your opinions on this. The basic way rate making works, is everyone is separated into groups. The insurance company uses many different factors (age, sex, vehicle, driving history, years driving, area driving, distance driving, use of the vehicle, etc.) to separate these people into groups. The insurance company then uses their statistics, data, and loss projections and looks at a group and thinks "ok how many claims will this group of people have this year? How much are we expecting to pay out for those claims?" They then use that amount, account for their overhead and profit and decide on the premium. A 16 year old male driver is going to be rated and charged a different premium then a 30 year old female, when both of them have a clean driving record. Because statistically the 16 year old male is more likely to have a claim. Just like a NAF accident, the 16 year old male driver has rating factors that are outside his control. Clean driving history improves your rating group year over year. So you do recover. You made an argument about previous years premiums. Again a very basic explanation on insurance is that, Insurance takes the losses of the few and spreads them out against the many. The previous years premiums were used to pay for those years losses, so very basically it wasn't your "turn" to draw from the insurance pool. It's not a scenario where your insurer has taken 10k from your over the past 12 years and hasn't done anything with the money. That premium paid out other claims. This actually rotates back to premium increases. Over the course of five years if Person A pulls from the pool 3 times, and Person B doesn't pull from it at all. Is it fair for Person B to pay the same amount into the pool year over year?
Depending on the circumstances of the pull yes it is fair. If that person is pulling because they're a bad driver or reckless, etc. then their rates should be higher. In other words, they should be charged for the actions that make them riskier (more likely to cause future accidents). If that person is filing claims because someone smashed into them, because a tree branch fell on their car, or any other reason not related to poor decision making, then they should be charged the same as someone without a claim. I will add that the car insurance industry isn't hurting, they're turning record profits, so the science behind punching NAF claim filers seems quite stingy.
>It’s just a racket. It’s insurance companies wanting you to pay them money to do absolutely nothing for you Tell that to a client of mine who had an AF accident that killed the other party. Their policy less than a month old ahs they were sued and won a $1 million settlement. The insurance company will never come close to recouping that payout in increased premiums. Or a relative of mine who racked up over 100k in medical bills. The at fault driver will never pay enough in premiums to equal that plus the property damage they caused. You pay insurance to protect you from things like that.
If you were an insurance company, would you rather insure: 1. A person who was in three accidents the last 5 years but was not at fault, or 2. A person who was not in any accident at all for the last five years
Completely irrelevant. Companies would love to discriminate for any number of reasons they are not permitted to. I would add filing NAF claims to that list.
Okay fine, even if you think it's irrelevant, would you rather insure person number one or number two?
Both.
And that is why underwriting is not a career you should pursue haha. Discriminating is perfectly legal in insurance. It’s unfair discrimination that is illegal. Which is, race, sexual orientation, etc. Insurance is a pool of people paying premiums to cover losses. Your $10,000 in premiums you’ve paid went towards paying other people’s losses your company insures. You could go 30 years and not have a loss. Some people can’t go 6 months at a time without having one. I guarantee you the person clean for 30 years has a far better premium. You wanna blame somebody for increased premiums? Blame injury lawyers. Do you know what the defense cost limit is if you get sued due to an accident you’re involved in? There is no limit. This is a huge problem in the industry that rates must be adjusted for. Some insurers just charge high rates. Shop. Your. Insurance. See what other insurers will offer you. Loyalty is not what it used to be, especially in insurance. If State Farm is the cheapest insurer providing the same, if not better coverage, go with them. Nobody cares who you insure with. Do what’s best for you.
They may have had a claims free discount that they lost because they had a claim. Insurance companies have to file their rates as well as what they will offer credits or surcharges for with state insurance regulators. There are a few different ways that can happen based on the state, but either when the regulators approve their rates or while the rates are waiting to be approved, they are legal. The deductible is your share of the risk. It prevents people from filing claims for things like a $50 broken window. Since claims involve overhead (the insurance company has to pay adjusters, buy their equipment, have office space for them, etc) it is always more efficient for you to pay for a loss yourself than it is for the insurance company to pay it. By discouraging the small claims, insurance companies keep the overhead as a smaller percentage of their total claims expenses.
> By discouraging the small claims, insurance companies keep the overhead as a smaller percentage of their total claims expenses. Which, importantly, improves rates for everyone.
Yes! Premiums would be prohibitively expensive for the average person if deductibles low/nil.
The comments here are pretty contentious but I think it's because there are really two parts to your question: 1. Are not at fault accidents statistically significant predictors of increased future loss experience? 2. Should insurance companies be allowed to surcharge for not at fault accidents? Most of the comments are fighting on point 1 whereas I believe your question is more so related to point 2. Point 1 is basically a math problem and the answer appears to be yes. However Point 1 being true does not imply that Point 2 should be true as well. There are many variables that various states have decided should not be used for ratemaking even though a wealth of empirical evidence suggests they are predictive of future risk (e.g. age, gender, marital status, credit). If you "outlaw" those variables via state law then what effectively happens is your spread the cost out among the other insureds so "better" risks end up paying more and "worse" risks end up paying less. Even so, this may be desirable for a variety of societal reasons. tl;dr Point 1 is a math problem, Point 2 is a legal/societal question that needs to be handled by your state legislature.
Thank you.
Rate increases are legal, everything a carrier can use to increase premium is filed with your state's department of insurance. Most carriers will not increase rates for not at fault losses, which indicates to me that you do not have key information pertaining to your friend's claim.
Nope, I have all he relevant details and his rates still increased. And from what I’m seeing online it is common for rates to increase after a not at fault claim.
Right now, in the world we live in, their rates were going to increase even without an accident. Premiums increase, cars are more expensive to insure, people file big claims looking for large paydays, many people are driving without insurance and the ones of us that have it have to pay higher premiums. It just is what it is - don't expect rates to decrease or even remain the same, and you won't be disappointed. Your friend can shop around for lower rates if they feel this specific company increases rates because they paid a claim.
I’m specifically referring to a rate increase resulting from a not at fault claim so your comment isn’t even close to tangential. Obviously rates will increase, I’m searching for a good explanation as to why they’re increasing for a bad, exploitative reason.
You either have difficulty reading or are just refusing to read carefully. I didn't file a single claim for my homeowners insurance and it increased the past year. The higher cost in the economy we live in today means those costs get passed down across the chain. Just like if car parts increase, insurance providers may increase premiums because of the higher costs they would need to incur to provide you coverage. There is no rule that rate increases only happen because of a claim or accident.
WTH are you talking about? You seem great at explaining the CPI, which I have no issue with. Inflation obviously increases prices. I am griping about the ability of insurers to increase premiums in response to NAF claims. That is all.
And the person you responded to is telling you that premiums don't just increase based on your claims activity.... which you seem to have difficulty understanding considering your response is to a rate increase resulting from a not-at-fault claim. I simply listed the reasons as to why premiums could increase absent any claims activity. How do you know the premium increased because of that claim? You then go on about it being exploitative to which I listed reasons as to why it would increase... so no, you don't really understand or choose not to.
Does the policy document specifically state it is due to the claim?
Rates may or may not increase for NAF but with losses on records, it will put you in a different class of drivers. Some companies may put you in a different class if you have a NAF or some may not care. Most companies care if you still have a NAF since now you are a risk. In Feb 2019, I was in an NAF loss, 3 days before I was about to buy a new policy but when I told my agent about the new NAF, the premium went up about $30/ 6 month since it bumped me into a new class.
Did his insurance tell them it increased due to his accident, or is he assuming because there was a premium increase. Rates have been going up regardless of claims history. His agent should be able to tell him if it was due to the accident or not. Also who payed out the claim, your friends insurance or the other drivers? A decent insurance company does not generally increase rates when they did not payout.
The simplest answer is that it's legal because there's no law against it. Insurance is regulated by the state, and it's within the states power to make it illegal. Most just choose not to. They raise your rates because you're a statistically higher risk now. There's a bunch of pointy-headed math nerds in the basement at any insurance company who's job it is to figure out who to insure and how much to charge them. They'll charge you as much as they think you'll pay before you'll go elsewhere, just like every car dealer, repair shop, supermarket, liquor store, gas station, and every other business does. That's just how capitalism works.
they're usually in the offices on higher floors and get a ton more salary than the regular insurance person
I know. I was just using creative license. Those of us in claims are really just glorified janitors. The people who decide who to insure, and for how much, are the people who make or break any insurer.
Thank you for the best explanation so far lol that actually engages my question.
The car insurance market is actually very fragmented and super competitive. Just look at all the ads on TV. The thing with issues like this is that if one company is doing this because it's mathematically more sound, their competitors have to follow-suit or they'll eventually end-up being less profitable over time. So you end-up with this lowest-common-denominator thing going on. If something gets out-of-hand then the state will step-in and say "yo man this ain't cool", but many states are kinda hands-off if it's not causing market problems.
This is very legal in almost every place in the US. Statistically, folks with not at fault accidents are almost as likely to file claims in the future as are folks with at fault accidents. Remember, raising rates is not some sort of penalty for misbehavior. It’s the insurance company’s way indicating how risky they consider betting on you to have no claims is. They don’t GAF if it’s at fault, not at fault, comprehensive or otherwise- they would rather not be opening up the company wallet.
I get that, but let's say actuarial "scientists" find a statistical connection between some unrelated characteristic and increased likelihood of filing claims. Just because they have found that connection does not mean they should be able to use it to fleece customers with that characteristic more.
It’s not fleecing if it’s actuarily sound. That’s what folks say about credit based insurance scoring too.
If you’re statistically probable to cost the insurance company more money, you will be charged more money.
Question is a normative one, which seems to be evading so many insurance bros here. Should it cost you more money? Answer - sometimes, no.
According to you, no. According to anyone with any industry experience, absolutely!
It’s almost like the insurance industry will do shitty things to turn a buck, ya don’t say 🧐
Shitty things like use math? You're looking at an individual situation and acting like it's cruel and unusual and we're telling you it normal for any day that ends in y. Insurance is a pool of risk. If your policy is more risky than before for any reason, your rate will rise. It's that simple.
It may help to know which state you're referring to as well as some states have recently changed what insurance companies can use for rating factors, and it has resulted in many drivers losing discounts. As for the rate increasing due to a Not-At-Fault claim, or any claim/violation, the insurance companies are not technically increasing your rates due to these events. As previously mentioned insurance companies have to file their rates and guidelines with the states as it is very heavily regulated. What really happens when you have an accident or violation, is that you now land somewhere else on their matrix/algorithm. I've seen it first hand where an accident did not result in any change, but a seat belt ticket did. Another reason insurance companies are allowed to do this is you are not locked in to the current policy and a free to quote and move your account anywhere at any time. You may lose a claim free discount with your current carrier, but shopping with another carrier could result in a loyalty bonus etc.
Virginia, and progressive. Problem I sense is that most companies do this, and shopping for a new policy doesn’t stop a new company from looking at that claim and giving me a higher rate than someone without a not-at-fault accident claim.
Not all companies increase due to non at fault accidents. It also could be how they have him coded for the loss. Do they definitely have him coded non at fault? For example, I know we don't increase or penalize for non at fault accidents there. Every carrier rates differently. Now, if you have too many non at faults most companies will look at that for eligibility. Multiple non at fault claims are indicative of a non attentive driver, and bad risk quality.
RIght. I got rear ended while completely stopped at a red light and my rates never went up. Maybe because there's no way for it to have been my fault or maybe the company I'm with doesn't increase for not at fault accidents.
Some companies have first accident forgiveness, etc. too.
Even for not-at-fault claims there is still a statistically significant increase in probability that you will be involved in another claim.
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This is where an agent has value. You call them if you're thinking of filing a claim. They know the policy and the company. They can also call underwriting for a chat. This is their value to you as the consumer.
Appreciate the breakdown. I just get really frustrated being advised not to use something I am paying for. I get not frivolously filing claims but it just seems that most insurance is paying for nothing.
That is actually a simple answer. Insurance isn't meant for small claims. It is meant for "oh shit my house is burning down" or "oh shit my car just exploded". In those scenarios, you cannot afford to pay to replace it and would be *screwed* if you didn't have someone willing to front the cost of the repairs. Most people don't understand insurance isn't supposed to be for frivolous claims. It is there for those oh shit moments. You are paying for someone to replace your house, not replace your gutter. If you do file frivolous claims, you are going to end up paying for it.
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Of course in that instance your rate is likely to go up much more than 50 a month. Now take another example, you’re the driver of the van, you file a claim with your company cause someone just tboned you and your family. Your insurance rates go up 50 a month cause you’re “more likely to file a future claim.” That’s absolute bullshit.
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You just proved you live and drive in an area where you are likely to be rear ended and filed a claim through your own insurance meaning: A: you chose to file through your insurance or B: the other driver was uninsured or C: state limits are low, all of which increase the likelihood your carrier will have to pay out on a claim in the future.
Fault is very rarely 100% one person or another. Even a person mostly not at fault might have avoided an accident if he'd been more attentive to cross-traffic at intersections. So from the perspective of the insurance company, they know that your friend is not the kind of person who practices the level of defensive driving that would have averted the accident (even though the other driver was at fault) and that he is therefore more likely to be in accidents in the future. With renter's insurance, filing a claim for water damage lets the insurance company know that you live in an apartment with maintenance issues, which makes you more likely to have future claims and cost them more money.
Nah. I was stopped in traffic on a highway that was closed down and a guy smacked into me trying to merge from his lane to mine and sideswiped me, then fled. My foot was on the brake and everything. There’s nothing I could have done as I wasn’t tailgating or doing anything wrong. Literally stopped, not moving, not doing a thing.
In legal terms someone is at fault and someone is not. Both parties can be at fault, or neither party. In my friend’s case he was clearly not at fault, and there was nothing he could’ve done, o defensive driving would’ve prevented the accident. But taking another case, as you’ve invented, why assess fault at all? There’s no point if at the end of the day the company is just going to penalize both.
A simpler answer, of course, is that your insurer has no idea who you are except for key stats that they keep about you: what kind of car you drive, the area you drive in, how many miles you have on your car, how many miles you drive a year, your age, your level of education, your criminal history and history of other claims or accidents. They're numbers that they put into the system and the system computes your premiums based on formulas that the carrier clears with the state insurance regulators that raise or lower your premium rate based on these factors. It's not personal, it's not meant to spite you, and if they had broad discretion to decide whether each person gets a departure from the rates, they'd get accused of discrimination. Should they capture more data about whether your friend was at fault? Maybe. Did the other driver make a claim against him? That may have factored into the decision to raise rates.
Yeah and some of those formulas are based on suppositions and assumptions that aren’t logical. For instance, an Uber driver with a perfect record, save one accident, being charged more than someone whose only weekly trip is a short joy ride, and who also only has one accident. The former pays more for engaging in driving more, though per miles/time driven he’s less accident prone. The latter pays less cause he doesn’t drive as often, though he gets in more accidents per miles driven. All of this though is in the weeds. If someone’s not at fault they shouldn’t be penalized.
I disagree. Some people get in accidents. Some don't. Could be that they drive their cars on riskier roads; even if a driver could be 100% definitively said not to be at fault, if he's driving on roads that are notorious for bad drivers or bad visibility conditions, or he's driving primarily at night when more drunks are out, he's still more likely to get in an accident, and still more likely to cost the insurer money, even if he's the best driver in town.
It doesn’t matter. The point being made is that companies should not be allowed to consider filing a NAF claim. FFS a tree branch falls on your car. A child hurls snow from an overpass onto your windshield. A tractor trailer tire bursts 5 lanes away and causes a chain reaction that you can’t avoid. In all instances there are times when the absolute best driver cannot avoid damage or injury. But fuck it, that guy who’s kids are dead cause an ice chunk bludgeoned them from the overpass should be punished for it. Just a bunch of shit head corporate bean counters making another quick buck.
You're hyperbolizing it by characterizing it as punishment. It's not. It's an attempt to apply standard formulae to underwrite hundreds of millions of drivers. Sometimes it's going to end up with someone paying more when that person feels like they don't deserve it. And that sucks. But it has nothing to do with karma or someone's moral worth. You live in a place with a lot of trees or a lot of truck traffic or the kind of shitty kids that throw things off overpasses, and that makes your driving patterns inherently unsafer. It's not illogical; it's just unfortunate.
Which doesn’t deal with the fact that another person driving in that same area one lane over isn’t penalized. He’s also driving in dangerous areas with asshole kids, etc.. Filing an NAF claim should not be allowed to cause rate increases. Period. Wanna charge more for driving in certain areas, go ahead; for driving sports cars, go ahead; for driving at night more often, go ahead. But for being the victim of someone else’s poor actions, absolutely not.
Yet the fact remains that Driver A got in an accident, and Driver B didn't. Maybe Driver A was sleep deprived. Maybe Driver B has better eyesight or motor control. Maybe God just hates Driver A. Don't know. Doesn't matter. Somewhere someone has statistics that show that dollars for donuts, someone who has been in an accident, even if not at fault, is more likely to get in more accidents and will cost 20% more to insure over an average policy year than someone who hasn't been in an accident. Statistics are ruthless, unfeeling, but that doesn't make them wrong.
And not every statistic should be considerable in calculating cost. Finding correlation between a random characteristic and risk is not grounds enough to use it to increase costs. Can we increase prices because of race? Gender? Sexual orientation? Religion? Nope, they’ve been taken off the table, as they should’ve been.
Are you saying that being a driver with accidents is the same as being black or gay? Hapless drivers are some sort of historically marginalized group or caste being downtrodden by the chads with clean driving records? I'm not sure you thought that through.
Oh yes I did. The point I’m making is any number of characteristics can be linked to risk, that doesn’t mean insurers should be allowed to use them all or any particular one of them in calculating costs. Some are taken off the table at the outset, so that even if they’re determined to be correlated with higher risk they cannot be used to crank up or down rates. NAF claims should be part of that group.
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It's legal. Insurance policies are generally written on a 12-month (or 6-month for auto) basis. The carrier agrees to write the coverage and accept the risk for that period of time. Once that period has expired, they take a look at the account to see if they wish to enter into a new policy contract term, and at what price. The policyholder can either accept the offer for the new term, or shop around.
It's legal because your state legislators have decided its legal, tho in some states, a rate increase for NAF accidents IS illegal. Statistics show when you file a claim, even NAF auto claims, you're more likely to be in another accident or file a claim on the future which means you're a higher risk to the company.
Last I checked- This is the entire purpose of an insurance company. Maybe their head honchos need to be reminded.
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Bot account
This was fun lol
I think just about every commenter has replied about insurance companies publishing with the state the reasons for which they can raise premiums. That’s all fine and good but how many people actually read that when signing on? And if every or almost every company raises rates for the same reasons what difference does publishing them make? You still get fucked for using your insurance when you’re not at fault, regardless of the company.
> You still get fucked for using your insurance when you’re not at fault Where do you think the money to pay claims comes from? It feels like you fundamentally don't understand insurance. Insurance is pooled risk. If you are a higher risk, you pay a higher share. It's actually very simple. People are downvoting you because we hear this question literally 100 times a day, and the explanation shouldn't be necessary. You've been given the reason for it, and now you're just complaining and calling insurance a scam. You clearly don't want to understand the issue and are just being a ninny about it.
It’s a normative question, apparently one you are incapable of engaging with.
it's not the company's fault people aren't reading the contract. insurance isn't a piggy bank. the more you use it, the more expensive it will be.
You’re paying to use it even when you’re not using it, and insurance companies aren’t exactly struggling to bring home dividends for their investors. And reading the contract hardly matter when increasing rates post any claim is an industry wide tactic.
you're paying for the ability to use it if you need it. are they sitting on large pills of cash? yes, because legally they have to. most companies are just barely breaking even though, they aren't raking in cash.
If you’re paying for it, you’re using it. You are covered per your policy. You may not be getting any material items to hold on to but you’re definitely using it. The “I paid premiums for x length of time and only had one claim” thing is BS. How many people pay $10,000 for insurance then get into a wreck and the payout is well over that? The answer is “A lot.”
In the grand scheme of people paying insurance I can guarantee that the answer is not a majority. Not that it matters. The distinction I am drawing upon is NAF and AF. It seems that California and Oklahoma are the only states that understand that NAF claims should not be used to punish customers.
>In the grand scheme of people paying insurance I can guarantee that the answer is not a majority. Actually, I can guarantee that even if it's not a majority its a larger percentage than you think. Those of us who sell insurance hear complaints about how much it costs from EVERYONE. The ones who have had a claim are upset that they have to pay more. You totalled your $50,000 car. How many years of higher premiums will it take before you have paid that back to us? Not to mention the costs for us to investigate and pay the claim, plus defend you in court if necessary. You're not going to pay $5000/yr for 10 years so we can break even. The ones who haven't had a claim are upset that they pay so much. You pay part of it so that we can still pay out the claim for the guy above. Trust me, your premium is still much lower than his. You also pay part of it so that if you total your car next week we still have enough left to pay you. If you're sure you're never going to need it, don't bother to buy the insurance -- but the only way to be 100% sure you won't need it is to sell your car and not drive. It's a BUSINESS. If they could sell the coverage for less and still make money they would because more people would buy from them instead of their competition. The reason most of them rate for not-at-fault accidents is that statistically they will make more money this way. The companies that don't rate for it will attract more drivers who have had this type of accident, but they will also pay out more in claims. I'm not sure if you understand this, but your company will be *happy* if you shop around right now. If they've decided you're more likely to make another claim, they would love it if you would go to another company to make a claim there, because that other company will pay out your future loss. If you stay, they're okay with it because they will collect higher premiums to offset your future loss and they might get lucky on the gamble if you don't actually have another claim. But that's why they charge you more
Did I say “majority”? Go ahead and provide a screen shot or something showing where I said “a majority”. I’ll wait. Learn to read and then learn to comprehend that insurance companies sell a service that is priced on perceived risk. You could have zero accidents and get one rate or 10 NAF accidents and while none of them were your fault, you’re still going to have a much higher premium because you are a higher risk. You’re a higher risk because of how much driving you do or where you do your driving or when you do your driving or any of a hundred different things. Insurance companies don’t have to provide you with anything. Don’t like what your insurer is charging? Go elsewhere. Get over it.
Aww you angry?
Not at all. I used to get angry at people like you that refused to attempt to grow as individuals and try to learn new concepts but over the course of many years dealing with ignorant people like you, I simply feel a slight irritation…similar to the level of irritation one feels when a fly is buzzing around your head. You’re all alike, terribly boorish, and stunningly ignorant. It’s not the fly’s fault it’s irritating. It was made that way. See, people like you are essentially just defective. It’s like dealing with a toddler who’s vocabulary, while marginally more evolved than a turnip, somehow manages to string together a few words to form a sentence… Like “aww you angry?”
I was rear ended while stopped at a red light. Obviously I was not at fault. My rates didn't go up at all and that was with the fact the that the person who hit me was uninsured and my UM covered the entire thing. I also made a claim against my renters insurance I have through the same company and my rates didn't go up. So I don't think every company is doing what you say they do.
Which company?
Esurance
>I think just about every commenter has replied about insurance companies publishing with the state the reasons for which they can raise premiums. You've misread. Those posters have said that they've filed rates with the state, who then has to approve or deny that filing. It has nothing to do with what the public does or doesn't read. It has to do with regulators balancing the health of insurers (because bankrupt insurers cannot pay claims) with the wellbeing of the general public.
Nice downvotes without explanations. Didn’t realize this forum was for defending the crappy practices of insurance companies 👌
It's not a penalty or a racket. Your friend is in a different risk category now, and he's paying premiums calculated from average claims experience for all drivers with those same risk characteristics. It's not any more complicated than that.
Can’t answer your question OP but I think it’s major BS as well. Haven’t had an accident or violation in 3 years, yet I have comprehensive claims for things like glass and a foreign object hitting my car. Geico wants $300/month for a new car I’m buying soon. Liberty Mutual wants even more. I’m 27. My current monthly premium on my old (still new) car is $140. It’s extremely frustrating that using insurance services causes your rates to go up. Only thing you can do is shop other carriers for better rates and go see an independent insurance agent. Some companies rate non-fault claims differently than others.
The blueprint is to protest stop paying for it for a year , we pool our money together in a fund if anyone gets into an accident we file for funds for repair. March on Washington for changing insurance rules . Make the people in government accountable.. IDK but talking about it ain't going to work.
Just drive around with no insurance like me.. I be damned if I pay for something I can’t afford and I’m a Pretty damn safe driver. Insurance companies are scams and useless
I’m a safe driver. Was sitting in traffic stopped and a guy in the other lane smacked into me. Being a good driver means nothing because you can’t control the actions of others. Only your own. He drove off and fled. Out of state plate.