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Author Topic: Insurance cancelled due to lack of accidents
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Comment: It might not be very widely spread but I've heard it two times
many years apart. The story goes a guy had been driving so many years
without an accident, his insurance carrier decided he was past due for an
accident and bound to have one soon so they cancelled his policy.

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FrogFeathers
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I've heard of people being cancelled after a single claim, but never for a lack of claims. In fact, at the end of the year, our insurance company sends us a check for "not having a claim" for the year. We've not had accidents or claims for the whole 9 years we've had this insurance company. (we have two cars and the house on the same policy).

I didn't know insurance companies were suddenly psychic and could tell when a driver was bound to have an accident.

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LittleDuck
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Well, I don;t know about that, since the person names no state or anything. But here at least you get rewarded for being a safe driver.

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Spam & Cookies-mmm
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In the late 80's/early 90's, my friend came into the office ranting that State Farm had drastically increased her insurance rate. Their reasoning, she said, was that she hadn't had an accident in 10 years and she was due.

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BlackForge
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quote:
Originally posted by Spam & Cookies-mmm:
In the late 80's/early 90's, my friend came into the office ranting that State Farm had drastically increased her insurance rate. Their reasoning, she said, was that she hadn't had an accident in 10 years and she was due.

I heard a similar thing. A good friend of our family at about the same time (80s/90s). Was complaning that they upped his rate and into a high risk catigory because he never had a accendent or ticket in all his 30 plus years of driving.
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Chimera
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Both my dad and I have reduced rates through our insurance companies (I think you get them if you've been accident free for five or more years). This is why I didn't want to file a claim when someone rearended me a few weeks ago. I know he was listed as being at fault (I was stopped at a cross walk in a school zone when I got hit) but I didn't want to risk my insurance going up just to replace a rear turn signal (the only significant damage to my car).

I've only known of insurance rates going down for a good driving record and going up or dropping you for a bad one (which financially makes sense).

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Four Kitties
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quote:
Originally posted by LittleDuck:
Well, I don;t know about that, since the person names no state or anything. But here at least you get rewarded for being a safe driver.

Massachusetts is different from everywhere else, though. Rates are set by the insurance commissioner, as is the Risk Step Program and what qualifies for an increase or reduction in points. So a Step 9 pays the same everywhere in the state (except for the risk differential for theft, which depends on where you live, and which is also set by the state). But Amica and Commerce and all the rest all must, by state law, charge me the same for the same coverage. It's one reason why relatively few insurance companies do business in Massachusetts -- they can't jack up their rates whenever they like.

Wherever this person is, it ain't in Massachusetts -- such a thing would be blatantly illegal here.

Four Kitties

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LittleDuck
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Four Kitties, Yea. I actually don't mind our insurance rules here. At least you know you can go anywhere and not be taken for a ride (no pun intended).

That thing about ""being due for an accident" would piss me off. That barely sounds legal.

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Johnny Slick
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Why would an insurance company cancel someone for paying them money but never getting anything from it? This UL doesn't even pass the laugh test.

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Kid Kilowatt
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Yeah, that just isn't true. If an insurance company raised its rates on someone just for being "due", not because they had to raise rates to remain profitable in the area, that state's insurance commissioner shouldn't let them file there anymore. And their stockholders (or policyholders, if a mutual company) would revolt, as the company is being run by complete nincompoops. I work in property and casualty insurance - it's hard enough finding insureds who don't cause accidents without jacking up rates on people because they don't.

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Scout
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My SO's grandfather had his insurance premium go up last year because he hadn't had an accident in such a long time (40ish years) that statistically it meant that he was high risk for an accident, so its possible there is some truth to the OP.

Scout.

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Johnny Slick
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quote:
Originally posted by Scout:
My SO's grandfather had his insurance premium go up last year because he hadn't had an accident in such a long time (40ish years) that statistically it meant that he was high risk for an accident, so its possible there is some truth to the OP.

I wasn't aware that insurance companies were run by ESPN baseball analyst Joe Morgan...

Perhaps your SO's grand-dad saw his insurance premiums go up because, um, he's getting old? Just a thought. You'd think that people trained in stats (insurance adjustors in this case) aren't going to be sucked in by the law of averages ruse.

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Scout
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quote:
Originally posted by Johnny Slick:
quote:
Originally posted by Scout:
My SO's grandfather had his insurance premium go up last year because he hadn't had an accident in such a long time (40ish years) that statistically it meant that he was high risk for an accident, so its possible there is some truth to the OP.

I wasn't aware that insurance companies were run by ESPN baseball analyst Joe Morgan...

Perhaps your SO's grand-dad saw his insurance premiums go up because, um, he's getting old? Just a thought. You'd think that people trained in stats (insurance adjustors in this case) aren't going to be sucked in by the law of averages ruse.

No need to be so sarky.

I'm aware that this is essentially just a FOAF story, I just mentioned it because it seemed relevant to the OP. I am told that he did ask specifically whether it was his age that was causing the change in premium and was told that no, it was because he had not had a claim in so many years. I'll see if I can find out which insurance company it was

Scout.

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Johnny Slick
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quote:
Originally posted by Scout:
quote:
Originally posted by Johnny Slick:
quote:
Originally posted by Scout:
My SO's grandfather had his insurance premium go up last year because he hadn't had an accident in such a long time (40ish years) that statistically it meant that he was high risk for an accident, so its possible there is some truth to the OP.

I wasn't aware that insurance companies were run by ESPN baseball analyst Joe Morgan...

Perhaps your SO's grand-dad saw his insurance premiums go up because, um, he's getting old? Just a thought. You'd think that people trained in stats (insurance adjustors in this case) aren't going to be sucked in by the law of averages ruse.

No need to be so sarky.

I'm aware that this is essentially just a FOAF story, I just mentioned it because it seemed relevant to the OP. I am told that he did ask specifically whether it was his age that was causing the change in premium and was told that no, it was because he had not had a claim in so many years. I'll see if I can find out which insurance company it was

Scout.

It sounds to me like an agent didn't want to tell him he was being discriminated against because of his age and made up the "no claims" thing instead. BTW, I was not being snarky; I really and truly believe that any insurance company that would charge a customer extra for not using the service they're paying for should not be in business. No statistics guy worth their salt is going to tell someone they're "due" because they haven't had an accident yet. That's developmentally disabled.

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OptimusShr
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quote:
Originally posted by BlackForge:
I heard a similar thing. A good friend of our family at about the same time (80s/90s). Was complaning that they upped his rate and into a high risk catigory because he never had a accendent or ticket in all his 30 plus years of driving.

OK whay would NOT having an accident make you high risk? To me it just sounds like an excuse to jack up rates.
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aranea russus
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quote:
Originally posted by Johnny Slick:
quote:
Originally posted by Scout:
My SO's grandfather had his insurance premium go up last year because he hadn't had an accident in such a long time (40ish years) that statistically it meant that he was high risk for an accident, so its possible there is some truth to the OP.

I wasn't aware that insurance companies were run by ESPN baseball analyst Joe Morgan...

Perhaps your SO's grand-dad saw his insurance premiums go up because, um, he's getting old? Just a thought. You'd think that people trained in stats (insurance adjustors in this case) aren't going to be sucked in by the law of averages ruse.

Right. Because if I toss a coin and get 'tails' five times, I'm due a head right?
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Eve MG
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quote:
Originally posted by aranea russus:
Right. Because if I toss a coin and get 'tails' five times, I'm due a head right?

Yes, statistically speaking. But you have no control over the coin. A driver has control over his car. I wonder why the insurance company is treating it like accidents are out of our control. Maybe these people are just good drivers!

I know, good drivers can still be hit at stop signs like Chimera was - but that's not the driver's fault and the hitter's insurance should pay, not the one who was hit. That's what happened to me when I was hit at a stop sign - the other woman's insurance paid for everything, including my rental car. And we have no-fault in New York.

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Chimera
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Just to be fair I wanted to clear up one thing. In my accident it would've been the other person's insurance to pay any damages. I was given thier insurance information if I wanted to make a claim but the office (the accident was witnessed by a school security officer that reported the incident) didn't take my insurance information. I just thought that if I made any claim my insurance company would be notified and I would no longer be accident free. BTW: I live in a no fault area but evidently there are times that it is determined that someone is at fault.

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Lainie
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A friend's insurance rates were raised after a string of not-at-fault accidents -- three or four within a year. The reasoning was that although she was not technically at fault in any of the accidents, the fact that she was involved in so many in such a short time suggested she might be doing something unsafe to contribute to them.

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Richard W
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I take it that you don't get No-claims bonuses in the USA, then?

quote:
A No Claims Bonus is a discount given by an insurer to policyholders who do not claim on their policy in a period of car insurance. Typically this starts at around 15% after 1 year and climbs to 60% after 6 or more claim free years.
The OP is the exact opposite of the way that insurance companies in the UK behave, and the no-claims bonus is a completely standard thing here. Is the idea really unheard-of in the States? Or unusual enough that it's even arguable?
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ASL
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quote:
Originally posted by Eve MG:
quote:
Originally posted by aranea russus:
[qb]Right. Because if I toss a coin and get 'tails' five times, I'm due a head right?

Yes, statistically speaking.
What?!?!? NO! That gets a bonk on the head with a fish. [fish] There. Each coin toss is independent of the one preceding it and any that will follow. When events are independent of one another, as they are with a coin toss, there is no such thing as being "due" for a particular outcome just because of the outcomes that preceded it. While it would be unlikely to get 6 in a row, once you have gotten 5 in a row ,the chance of getting a 6th is 50/50.

quote:
A driver has control over his car. I wonder why the insurance company is treating it like accidents are out of our control. Maybe these people are just good drivers!
Which is why I am convinced this is a UL. Getting in one accident is an indication that you are more at risk to get in another car accident statistically speaking. Likewise, never being in an accident for a very long time is an indication that you are at a lower risk. While this does vary from individual to individual (some good drivers might just be unlucky, some bad drivers might just be lucky), when dealing with large numbers of people like insurance companies do, it helps to determine the "expected value" of covering those people.

Insurance companies turn a profit based on how many customers they retain and how good their statistics are at assessing future probabilities. It's all about expected value. You can fine tune expected value by dividing people into groups. You can get the same amount of money per person from a group of people with low rates who also are less likely to get in an accident as you can from a group of people that pay a whole lot of money, but then also take a whole lot of money back on average because of accidents.

In short, I call BS.

ETA:
quote:
Originally posted by Richard W:
I take it that you don't get No-claims bonuses in the USA, then?

quote:
A No Claims Bonus is a discount given by an insurer to policyholders who do not claim on their policy in a period of car insurance. Typically this starts at around 15% after 1 year and climbs to 60% after 6 or more claim free years.
The OP is the exact opposite of the way that insurance companies in the UK behave, and the no-claims bonus is a completely standard thing here. Is the idea really unheard-of in the States? Or unusual enough that it's even arguable?
Give us some credit over here on the other side of the pond. I am sure the UL from the OP is just a typical jab at inusrance companies. There are few things people enjoy more than villifying insurance companies (and lawyers). Just a typical "the Man will screw you no matter what you do!" story.

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Methuselah
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quote:
Originally posted by Eve MG:
I know, good drivers can still be hit at stop signs like Chimera was - but that's not the driver's fault and the hitter's insurance should pay, not the one who was hit. That's what happened to me when I was hit at a stop sign - the other woman's insurance paid for everything, including my rental car. And we have no-fault in New York.

Is the 'no-fault' setup the same as an 'assumed shared fault' auto insurance setup (although that may not be the proper legal name). Basically, it states that both cars will have at least some percentage of fault in any claim, even if one car was parked legally with no occupant and the other car was being driven by a drunk driver who was fleeing the cops after having robbed a bank and killed a bunch of puppies. [Big Grin]

The "victim's" insurance company would assume, for example, 6% of the fault while the drunken maniac's insurance would assume 94% of the fault.

It silly, but that's the way it is in Wisconsin.

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Eve MG
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quote:
Originally posted by ASL:
quote:
Originally posted by Eve MG:
quote:
Originally posted by aranea russus:
[qb]Right. Because if I toss a coin and get 'tails' five times, I'm due a head right?

Yes, statistically speaking.
What?!?!? NO! That gets a bonk on the head with a fish. [fish] There.
Hey, ow! You're right, point taken. I was thinking that it's very unlikely that you'll get 6 in a row, as you said, forgetting that each toss is independent.

I think I'm going to stop talking statistics now, because much as I love to play with them, I'm in over my head. (I actually managed to do well in Statistics in college due to the way the teacher played with her numbers... funny huh? Since then I've learned to just be careful with them.)

PS Milhouse, I don't think we have to pay anything here if it's obviously someone else's fault, but I'm not positive. In my case, the other person's insurance company paid for my car repair and my rental.

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robbiev - singin' off key
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Insurance companies (some, anyway) do raise rates based on age categories, and it sounds like, at least some of the stories given here are related to that.

Statistically, (according to whose numbers, I don't know) drivers of a certain age are more likely to be involved in an accident, so at some threshold, you are bumped up into a higher risk category.

I have never heard of anyone being cancelled though.

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Richard W
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quote:
Originally posted by ASL:
Give us some credit over here on the other side of the pond. I am sure the UL from the OP is just a typical jab at inusrance companies.

Fair enough... but if you do get no-claims bonuses then surely the story's a complete non-starter anyway, or at least it would only convince somebody who's never paid any attention to motor insurance at all. I mean, they even talk about them on TV adverts...
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Bettie Page Turner
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quote:
Originally posted by Johnny Slick:
It sounds to me like an agent didn't want to tell him he was being discriminated against because of his age and made up the "no claims" thing instead.

How is basing rates on age discriminatory? The insurance companies are in the risk business...essentially controlled gambling. They are in the business to make money, not to make your life easier or to provide a public service. If the insurance company pays out the most claims on male drivers 16-24 and female drivers 64-80, who can blame the company for charging those groups more? Should I (34 yo married female with a 4 door sedan) pay the same rates as a 16 yo boy with a Mustang? No, because he has a much higher chance of accident, due to youth and inexperience. Likewise, the 78 yo driver has a much higher chance of accidents due to decreasing reflexes, peripheral vision, etc. Statistical probability is not necessarily fair to the conscientious 16 yo boy or the fit, youthful senior citizen, but it is the way for the insurance company to ensure consistent pricing for customers. It would be impossible for insurance companies to issue individualized quotes based on each person's demonstrated driving habits and abilities. Generalizations have to be made.

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WonkoTheSane
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quote:
Originally posted by Four Kitties:
...But Amica and Commerce and all the rest all must, by state law, charge me the same for the same coverage. It's one reason why relatively few insurance companies do business in Massachusetts -- they can't jack up their rates whenever they like...

Of course, this policy also kills free-market competition, too, giving all the power to the politicians and lobbyists. Probably why MA is the fourth most expensive in the US. I don't mean to hijack the thread, but we recently moved here to Mass from Connecticut (known for high rates) and when we went to get our rate quote, the agent was so sure that we were going to save money because Mass just has the bestest possible insurance system around... she was a bit surprised when our payout went UP by 30% because of the laws here. And neither of us has bad marks on our driving records.

Wonko "and what the heck is with wanting to charge me state sales tax on a car I didn't buy here, anyway" the Sane

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NeeCD
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quote:
Originally posted by Richard W:
I take it that you don't get No-claims bonuses in the USA, then?

quote:
A No Claims Bonus is a discount given by an insurer to policyholders who do not claim on their policy in a period of car insurance. Typically this starts at around 15% after 1 year and climbs to 60% after 6 or more claim free years.
The OP is the exact opposite of the way that insurance companies in the UK behave, and the no-claims bonus is a completely standard thing here. Is the idea really unheard-of in the States? Or unusual enough that it's even arguable?
But if Scout is posting from the UK, and it was Scout's SO's Grandfather (also in the UK?) that had this issue, then isn't it irrelevant whether we have no-claims bonus here in the States?

ET fix relationship

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Johnny Slick
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quote:
Originally posted by aranea russus:
quote:
Originally posted by Johnny Slick:
quote:
Originally posted by Scout:
My SO's grandfather had his insurance premium go up last year because he hadn't had an accident in such a long time (40ish years) that statistically it meant that he was high risk for an accident, so its possible there is some truth to the OP.

I wasn't aware that insurance companies were run by ESPN baseball analyst Joe Morgan...

Perhaps your SO's grand-dad saw his insurance premiums go up because, um, he's getting old? Just a thought. You'd think that people trained in stats (insurance adjustors in this case) aren't going to be sucked in by the law of averages ruse.

Right. Because if I toss a coin and get 'tails' five times, I'm due a head right?
If you toss five straight tails, you have a 50% chance of getting a head.* You're no more "due" a head than a person who just tossed 5 of them in a row or a guy who went HTHTH. The so-called "law of averages" (that says you ARE due) is used all the time in baseball. Just listen to Joe Morgan in the late innings. "Ichiro is oh for 4 tonight. He's due."

*Unless you're using a trick nickel.

EDIT: Spanked by ASL! Hoochie mama!

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Give big space to the festive dog that makes sport in roadway. Avoid entanglement of dog with wheel spokes.

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Johnny Slick
Angels Wii Have Heard on High


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quote:
Originally posted by Bettie Page Turner:
quote:
Originally posted by Johnny Slick:
It sounds to me like an agent didn't want to tell him he was being discriminated against because of his age and made up the "no claims" thing instead.

How is basing rates on age discriminatory? The insurance companies are in the risk business...essentially controlled gambling. They are in the business to make money, not to make your life easier or to provide a public service. If the insurance company pays out the most claims on male drivers 16-24 and female drivers 64-80, who can blame the company for charging those groups more? Should I (34 yo married female with a 4 door sedan) pay the same rates as a 16 yo boy with a Mustang? No, because he has a much higher chance of accident, due to youth and inexperience. Likewise, the 78 yo driver has a much higher chance of accidents due to decreasing reflexes, peripheral vision, etc. Statistical probability is not necessarily fair to the conscientious 16 yo boy or the fit, youthful senior citizen, but it is the way for the insurance company to ensure consistent pricing for customers. It would be impossible for insurance companies to issue individualized quotes based on each person's demonstrated driving habits and abilities. Generalizations have to be made.
I agree. And that's why it's often a good idea to discriminate by age.

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Give big space to the festive dog that makes sport in roadway. Avoid entanglement of dog with wheel spokes.

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ratface
I'm Dreaming of a White Sale


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QUOTE]How is basing rates on age discriminatory? The insurance companies are in the risk business...essentially controlled gambling. They are in the business to make money, not to make your life easier or to provide a public service. [/QB][/QUOTE]
OT but I must correct you on behalf of myself and other insurance professionals. Insurers are in the business to make your life easier and to provide a public service. For example your life is easier because you can get a car loan and don't have to worry about going bankrupt should your property be destroyed.

The profit is just a compensation to those who supply the needed capital to create and run the company.

As for the OP, no company would raise rates for not having a claim, every study shows that claims in the past predict claims in the future. But rates do change for many other reasons which are often not well understood by brokers or customers. So I could imagine the conversation going something like this:

Customer: How come my rates went up! I haven't had a claim in 20 years.
Broker: I guess the company figures you're due.

More of a reference to the popular baseball term than an actual explanation of the increase.

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BlackForge
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quote:
Originally posted by ratface:
QUOTE]:

Customer: How come my rates went up! I haven't had a claim in 20 years.
Broker: I guess the company figures you're due.


[/quote]

Nerver mind that the customer over the last 20 years has easly payed enough to cover most any accedent the customer may get into.

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Johnny Slick
Angels Wii Have Heard on High


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quote:
Originally posted by ratface:
OT but I must correct you on behalf of myself and other insurance professionals. Insurers are in the business to make your life easier and to provide a public service.

What? No they aren't. Insurance companies, like all companies, are primarily in the business of making money. Their niche, I agree, is making your life easier through insurance, but the profit isn't a nice little sidelight, it's the sole reason these businesses are in operation.

I'm a capitalist and all, but part of my being a capitalist is accepting that businesses do not exist for altruistic purposes.

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Give big space to the festive dog that makes sport in roadway. Avoid entanglement of dog with wheel spokes.

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ratface
I'm Dreaming of a White Sale


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quote:
Originally posted by BlackForge:
quote:
Originally posted by ratface:
QUOTE]:

Customer: How come my rates went up! I haven't had a claim in 20 years.
Broker: I guess the company figures you're due.



Nerver mind that the customer over the last 20 years has easly payed enough to cover most any accedent the customer may get into. [/QUOTE]


Never mind indeed. That money was used to pay for the claims on other people who did have an accident. The company doesn't save it in your account to use should you have an accident.

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ratface
I'm Dreaming of a White Sale


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quote:
Originally posted by Johnny Slick:
quote:
Originally posted by ratface:
OT but I must correct you on behalf of myself and other insurance professionals. Insurers are in the business to make your life easier and to provide a public service.

What? No they aren't. Insurance companies, like all companies, are primarily in the business of making money. Their niche, I agree, is making your life easier through insurance, but the profit isn't a nice little sidelight, it's the sole reason these businesses are in operation.

I'm a capitalist and all, but part of my being a capitalist is accepting that businesses do not exist for altruistic purposes.

What about mutual insurance companies?
Posts: 28 | From: Toronto | Registered: Jun 2005  |  IP: Logged | Report this post to a moderator
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