Why is it legal for insurance companies to set prices based on generalizations?

[TheCentaur]

But it's illegal to hire, exclude, set wages, and in some instances even speak in generalizations?
My point is, insurance companies can blow me.
Also, on an unrelated note, so can pharmaceutical companies.

[OmgUrMom]

agreed, i switched my vehicle from an old beat up peice of shit, to a newer model, but not a sports car or anything and my LIABILITY insurance went way up, like 80%. How does this make any sense? I'm actually a lot safer and less likely to get into a big accident driving a newer car (still 7 years old). For example my brake lines went out on my old car and that could of caused me to get into an accident, that would probably not happen with my new car. If anything I think my insurance should of went down, but staying the same would of at least been reasonable too.

[VegasInsider]

The reason for this is that a new car carries higher value, making it a greater risk. In the event of an accident, the cost to repair or even replace it carries a steeper price than if it were a used vehicle. Plus, newer cars are more susceptible to theft.

[blackbeSSt]

The reason for this is that a new car carries higher value, making it a greater risk. In the event of an accident, the cost to repair or even replace it carries a steeper price than if it were a used vehicle. Plus, newer cars are more susceptible to theft.

this man speaks the truth.

[BIGDAY]

Insurance company's actuaries can prove to the state commerce departments that those type of "generalizations" can make a diference in loss ratios. Rates are so involved now that agents or underwriters can not even tell you why a rate went up or down anymore as these compnaies rating and insurance score systems are so intigrated.

When people ask what I do, I reply, I'm a bad guy. They ask why, I say that I'm an insurance agent.

It's the last bill that I want to pay also... Try selling the stuff.

[blackbeSSt]

Insurance company's actuaries can prove to the state commerce departments that those type of "generalizations" can make a diference in loss ratios. Rates are so involved now that agents or underwriters can not even tell you why a rate went up or down anymore as these compnaies rating and insurance score systems are so intigrated. When people ask what I do, I reply, I'm a bad guy. They ask why, I say that I'm an insurance agent. It's the last bill that I want to pay also... Try selling the stuff.

bigger you an agent also?

[BIGDAY]

The reason for this is that a new car carries higher value, making it a greater risk. In the event of an accident, the cost to repair or even replace it carries a steeper price than if it were a used vehicle. Plus, newer cars are more susceptible to theft.

But in liability only, you only pay for the damages to the other auto not his. The price hike would make sense if the car was a much higher speed auto or a larger auto as it would cause more damage to the auto he would hit.

[BIGDAY]

bigger you an agent also?

[wtt0315]

they same reason they set higher rates for people with lower credit, women are cheaper then men, and people on the beach in florida cant get house insurance. They want less risk people to pay more in and take less out. When you buy insurance you are basically saying I will wreck or i will die soon so i need this. You are right It should be illegal though

[OmgUrMom]

The reason for this is that a new car carries higher value, making it a greater risk. In the event of an accident, the cost to repair or even replace it carries a steeper price than if it were a used vehicle. Plus, newer cars are more susceptible to theft.

huh? they won't pay me a dime on my car for liability insurance, so I'd have to say I don't understand why the value of my car would matter......

[TheCentaur]

The reason for this is that a new car carries higher value, making it a greater risk. In the event of an accident, the cost to repair or even replace it carries a steeper price than if it were a used vehicle. Plus, newer cars are more susceptible to theft.

No that isn't what I am talking about. They adjust liability prices based on age, gender, type of car you drive, etc. While there are statistics to back this up, there are also statistics based on gender, race, etc. backing up other behaviors, but it is illegal to act according to them while it is legal for insurance companies.

[JohnGalt2341]

This is just a guess... and I'm not 100% certain on this but I think it might because the White Man is getting shafted. If Black Women had to pay the highest rates it would be considered racist/sexist.

[TheCentaur]

they same reason they set higher rates for people with lower credit, women are cheaper then men, and people on the beach in florida cant get house insurance.

People with lower credit have already established their behavior, and you have a choice of where you want to live so choosing the coast of Florida where Hurricanes historically target is different.

The women are cheaper than men analogy is right on. You do not have a choice of being a woman or man (well unless you take drastic action), what your race is, or what your age is, but the insurance companies can increase your rates because of what your demographic tends to cost them. It is the total opposite of today's social agenda in this country, but these companies have deep deep pockets so they get away with it I guess.

[EmpireMaker]

because they bribe politicians regularly in order to get legislated thievery

[bigboydan]

because they bribe politicians regularly in order to get legislated thievery

That about sums it up in a nutshell sir.

[blix177]

Because they spend billions lobbying for shit like that. And if you don't like insurance, set up a trust fund, and just put your premium into that trust. When shit goes wrong use that money. And if you don't have enough, your SOL, but in the long run you should save money. At least your not paying some insurance company overhead cost+profit.

[TheCentaur]

Because they spend billions lobbying for shit like that. And if you don't like insurance, set up a trust fund, and just put your premium into that trust. When shit goes wrong use that money. And if you don't have enough, your SOL, but in the long run you should save money. At least your not paying some insurance company overhead cost+profit.

I agree that's a good idea, but in certain cases it is illegal or a breach of a contract/lease agreement not to have insurance(auto liability insurances, certain business insurance policies, and coming soon if some people have their way, health insurance).

[flyingillini]

It's nothing compared to health insurance.. try going to cobra health insurance and see what a scam this shit is.... Unreal

[raydog]

Insurance company's actuaries can prove to the state commerce departments that those type of "generalizations" can make a diference in loss ratios. Rates are so involved now that agents or underwriters can not even tell you why a rate went up or down anymore as these compnaies rating and insurance score systems are so intigrated.

When people ask what I do, I reply, I'm a bad guy. They ask why, I say that I'm an insurance agent.

It's the last bill that I want to pay also... Try selling the stuff.

im guessing you are quite new to the business... please, for you sake, dont ever admit this to anyone else...you might be in the wrong line of work