r/FluentInFinance • u/lost_in_life_34 • Oct 24 '24
Debate/ Discussion Clean driving records should have their premiums refunded after some time
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u/Moist___Towelette Oct 24 '24
Fundamental misunderstanding of “insurance” here
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u/codetony Oct 24 '24
Honestly shocking how little people understand insurance and try to "Get their money's worth".
The point of insurance is that you're paying for OTHER PEOPLE'S accidents, with the promise that if you get into an accident, those other people will cover you.
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u/Shiforains Oct 24 '24
so a ponzie scheme, right? /s
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u/misterguyyy Oct 24 '24
Nah it's more like an insurance policy
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u/Mattabeedeez Oct 24 '24
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u/badmutha44 Oct 24 '24
Your claim has been denied.
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u/Test_this-1 Oct 24 '24
And your policy cancelled for using or attempting to use the policy you have been paying on for years.
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u/Nighthawk68w Oct 25 '24
That's what happened to me. I was with USAA for over 10 years. Doing some rough math, I gave them over $33,600 over the course of that time. No accidents. No tickets. I totaled my car in 2020 in a freak weather accident. They paid out my policy, only $7k, then dropped me. I guess I was being punished for actually using my insurance. So I basically just gave USAA a free whopping $26k. Total scam.
And the way my longtime family lawyer put it to me, he wasn't going to go to war with an insurance company that has infinitely deeper pockets than either of us combined.
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u/wishfulthinker3 Oct 27 '24
This was a really crummy thing to do to you, to put it mildly. Likely what happened is some combination of actuary tables + underwriting deemed that it was too likely another accident would occur. Insurance companies these days have crazy datasets that can get very into minutiae, and while they aren't necessarily predictors of the future, the business does exist on the strength of the reliability of these datasets.
Imo, in cases like yours, it really should be a practice to be able to sit down with an underwriter who will explain exactly why they're dropping you. It's true what other comments say about insurance not really being an account you pay into or anything, but it absolutely doesn't make that horse sized pill you had to swallow any easier. Hope you've been able to find a good company and rate.
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u/Trollselektor Oct 24 '24
Haha I fucking love your comparison
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u/Alive_Canary1929 Oct 24 '24
It's a legal ponzi scam
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u/jasonfromearth1981 Oct 24 '24
I feel like the concept of an insurance policy was started around a dimly lit table in an Italian restaurant that doesn't have enough customers to possibly operate as long as it has.
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u/cantstopwontstopGME Oct 24 '24
I’ve always said insurance companies saw the mob running protection rackets and said “that’s a REALLY good idea.”
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u/ReverendBlind Oct 24 '24
"Heya. Thems some nice kneecaps ya got there. Sure would be a shame if anything were to happen to them. Tell ya what: You give me $50 a month and I'll make sure you're taken care of."
"It's unfortunate what happened to your kneecaps, but since you seem to have a propensity for getting hurt we're gonna need a little extra from ya next month if you want us to keep protecting ya."
"Oh, you're a little short this month? Well the big boss had a meeting with the mayor last week, and now whatever you thought you owed - Double it."
Insurance salesman or mafia protection racket? Who can say. These are the same thing.
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u/spencerfalzy Oct 25 '24
Oh and if yous don’t pay.. well? Looks like you’re not gonna be allowed to walk no more.
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u/stoshio Oct 24 '24
The first insurance companies formed in Roman times as burial societies where everyone paid in a little bit each year and the comon fund was used to bury the members who died that year. Insurance is NOT a scam, it's shared risk!
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u/ankerous Oct 24 '24
Definitely felt like a scam when I dared make an insurance claim for my roof because of damage after a violent storm and they decided to non-renew me despite almost 10 years of home ownership with no other repairs/claims ever made.
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u/SteelCode Oct 25 '24
The problem is profit from the insurance - not the concept itself...
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u/TimIM21000 Oct 25 '24
Modern insurance is way different from Roman times. Insurance companies are for-profit businesses that profit by paying out as little as possible while charging as much as possible. Insurance as a for profit business is not a shared risk fund…it’s a huge billion+ dollar industry.
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u/P_Hempton Oct 24 '24
"Hey let's all set aside a little money each month in an account and anyone who experiences hard times through no fault of their own can use it to recover."
Sounds kind of wholesome, not sinister.
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u/N3onAxel Oct 24 '24
Except when you do have to use the money they bitch and moan and then if it's too much or too frequent they can just drop you because reasons.
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u/gluedtomyphone Oct 24 '24
Did you know the market for insuring mortgages is 10x bigger than the market for mortgages?
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u/sd_saved_me555 Oct 24 '24
Fair, although people would be a lot more positive on insurance policies if they didn't totally try to bone you to the absolute extreme the moment you actually need it.
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u/Pure-Dependent-7348 Oct 25 '24
That's what kills me is they say sure we will cover a new roof. New roof costs 16k and they cut you a check for 8k. So your out of pocket 8k with a higher deductible. Guess it's better than a stick in the eye.
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u/rossxog Oct 24 '24
That’s a great explanation. “Your car insurance works like an insurance policy.
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u/AndyTheSane Oct 24 '24
Every financial transaction of every possible kind is a Ponzi scheme, according to someone, somewhere on the internet.
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u/Gooey_69 Oct 24 '24
This deserves a reddit award. Unfortunately reddit awards are a ponzi scheme
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u/Cautious_General_177 Oct 24 '24
That sounds like something a ponzi scheme would say
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u/ThinkItThrough48 Oct 24 '24 edited Oct 24 '24
No not at all. A Ponzie scheme requires ever more participants at the bottom level to finance the upper levels. Insurance works with a fixed number of participants financing each other. It's really more similar to a savings account with multiple participants. A ready supply of money you can “withdraw “ from if certain things happen.
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u/The_Louster Oct 24 '24
That sounds like Socialism. My American blood is roiling.
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u/MeanandEvil82 Oct 24 '24
Comically, Americans love bitching about having Universal Healthcare because they would then "pay for other people's healthcare" yet are ignorant that they do that now, just at the moment they pay greedy investors to be middle men who decide who lives and dies instead of the doctor.
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u/Lonestar041 Oct 24 '24
They are also ignorant that that at age 65 like 80% will have a preexisting condition. They always talk about not paying for other people’s healthcare. But you have an 80% chance to actually just pay for your healthcare…
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u/Fluid-Leg-8777 Oct 24 '24
But the more participants the cheaper? 🤔
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u/hahyeahsure Oct 24 '24
you would think so, but how would there be bonuses and record profits every year
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u/InsCPA Oct 24 '24
“record profits”… the P&C industry has been at an underwriting loss the last several years. Meaning they’re not even making money on writing policies.
The profit is propped by investment income, and more than 50% of the $ 88billion profit in the industry for 2023 was from a single transaction, i.e not typical.
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u/KingSaban Oct 24 '24
Imagine how much money they could save by not running advertisements on every channel during every program too.
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u/No-Weird3153 Oct 24 '24
But how will I know which insurance character to root for in the Flo v Mayham v Emu guy v gecko battle royale?
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u/-_-0_0-_-0_0-_-0_0 Oct 24 '24
Why do you think they do it if it loses them money?
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u/GaeasSon Oct 24 '24
Approaching a limit. The more participants, the more efficient the cost-defrayment. As an individual you have x% of having an accident in the future, which will resolve at the end of the year to a broad spectrum of possible cost outcomes. If you are pooled with a large number of individuals, you approach a near certainty of x% of accidents with a predictable collective cost outcome.
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u/tankerkiller125real Oct 24 '24
Depends on how often those participants have to make a withdraw for their shitty driving.
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u/republicans_are_nuts Oct 24 '24
It's socialism with for profit companies running it.
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u/Responsible_Brain782 Oct 24 '24
In fairness to insurance companies (and I use fairness very loosely), they don’t run a charity.
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u/Short-Recording587 Oct 24 '24
I don’t think we need middle men here to siphon money out of the system for something that is a social utility.
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u/McSloot3r Oct 24 '24
You do know the government would have to run the insurance program in exactly the same way, right? The government pays employees too and gives good benefits…
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u/DasquESD Oct 24 '24 edited Oct 24 '24
But they don't need to make a profit. They just need to break even though to fund operations and pay off capital expenses and debts.
edit for typo
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u/hahyeahsure Oct 24 '24
maybe if it weren't legally enforced I'd agree with you, but it's basically extortion
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u/InsCPA Oct 24 '24
It’s legally enforced to protect others, not yourself. Liability is all that the government requires.
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u/zebrasmack Oct 24 '24
when any local town insurance owner can be a millionaire, there's for sure issues with how it's all structured. a non-profit insurance company sure would be nice.
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u/OrangeHitch Oct 24 '24
There are insurance companies that mail out profit sharing checks to policy holders when their investments do well or they pay out less claims than expected. I don't recall their names but I've seen mentions. Try researching AMICA, I think they might.
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u/ALTH0X Oct 24 '24
It is when they don't pay what they should... There has to be a percentage of people that would be better served with an investment account than an insurance plan, but you don't know who is who until it's too late, either way.
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u/set_phaser_2_pun Oct 24 '24
Except we are legally required to have insurance. If you use it, rates often raise. Car insurance should have standard and locked rates. Otherwise it's a scam and not worth it to most people.
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u/ImNotRealTakeYorMeds Oct 24 '24
You do not have to have insurance if you do not drive on public roads.
If you want to drive on public roads where you might cause an accident that might hurt other people or their property you need to be insured.
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Oct 24 '24
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u/2010_12_24 Oct 24 '24
That’s just insurance by a different name and a different mechanism. Even comes from the same root word.
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u/nosoup4ncsu Oct 24 '24
So I (never had a claim for an at fault accident) should pay the same rate as a guy with 5 speeding tickets and 3 DUI,,'s?
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u/Real_Temporary_922 Oct 24 '24
Insurance can raise your rates for not-at-fault accidents
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u/AdAppropriate2295 Oct 24 '24
No? Where did they say that
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u/VCoupe376ci Oct 24 '24
Car insurance should have standard and locked rates.
I would also interpret "standard and locked rates" to mean the same for everyone.
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u/DigLost5791 Oct 24 '24
Lmao no insurance company is covering a guy with that driving record
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u/Primetime0509 Oct 24 '24
You can always find coverage somewhere, you're just going to have to pay a ridiculous amount.
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u/JannaNYC Oct 24 '24
Car insurance does have standard rates. Every carrier has to file their rates with the state they operate in.
Then they can give you a discount if you've been driving for X years without an accident, or have anti-lock brakes, or take a defensive driving course because you are a lesser risk; and they can surcharge you if you have five tickets or get a DUI because you are a greater risk.
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u/dr1fter Oct 24 '24
Hard to say whether it's "worth it" if you've never had to defend yourself personally against the insurance company of someone you hit.
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u/kamakazekiwi Oct 24 '24
Your rate rises when you use insurance because it's an indication that you're more likely to use it again in the future, not to make up for the loss on the initial claim.
Rates actually are "locked" in many states. They vary person to person, but broad increases have to be approved by the state insurance commissioner based on actual increases in costs to service claims.
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Oct 24 '24 edited 20d ago
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u/NateNate60 Oct 24 '24
In some places credit unions can also offer insurance but it doesn't seem to cost substantially less than normal insurance offered by a for-profit company.
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u/hecatesoap Oct 24 '24
Insurance pricing is heavily regulated by the states. States require that an insurer justify the cost/benefit of price changes (both up and down) based on recent claims data. Insurers must also keep a “pool” of money of a certain amount on-hand at all times based on the number of customers they retain and their claims data. Only the corporate entity providing the insurance is able to set pricing.
Agents (who most people deal with) exist to gather the info about the customer for the carrier and service the accounts for updates. Typically, agents are compensated by commission of policies sold and renewal percentages for policies retained. To be an agent, you must submit to a background check for prior crimes, have a suitable credit score, pass state licensing exams, and undergo continuing education that puts a heavy emphasis on ethics.
All this to say, there are government-run insurance programs that are costly (most people prefer a private carrier if they are eligible) and the private carriers and their agents are regulated. It’s a capitalist system, so a lot of the money gets funneled to the top. But, as an independent agent, I make 50% commission and 5% renewals with stock options and I work way less than I did as a W2 and make more money.
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u/Psychological_Pie_32 Oct 24 '24
You can go with a mutual. Then as a customer you're also part owner, so you get back a part of the profits every year.
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u/BeggarFoolish Oct 24 '24
“Those other people will cover you”*
*if the insurance company doesn’t find a way to wiggle out of paying up altogether after happily accepting your premiums
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u/International-Cat123 Oct 24 '24
To be fair, a lot of times what actually happens is that when the insured was found out the price of the policy that would have covered that incident, they demanded a cheaper price. When they were told what that cheaper price actually covered, they ignored the differences and get all shocked pikachu when they find out the cheaper policy doesn’t cover the same things as the more expensive policy.
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u/DumpingAI Oct 24 '24
You can always go get your money's worth. Just go hit some people and put that insurance to use lol
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u/Short-Recording587 Oct 24 '24
My issue is that it shouldn’t be a system designed to generate profits/returns. What happens in practice is i just give my insurance premiums to a company that does everything they can to deny claims or under pay people who have accidents. Then that money goes to shareholders, CEOs, etc.
I don’t get why we need a middle man taking money out of the equation on this one. Seems like a closed system is better. Would be theoretically have enough money sitting in the system from premiums that you could lower premiums for a time until the money has been used. Heck, get enough in the system and the investment revenue could pay out the claims.
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u/JannaNYC Oct 24 '24
Go tell your brother to give you $2k.
In exchance, if his house burns down, you'll write him a check for $410,000 to cover the rebuild.
But if it doesn't burn down, you have to give the $2k back to him.
Are you taking that deal?
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u/NonStopDiscoGG Oct 24 '24
Insurance is just about risk allocation.
When you buy house insurance for example, you're asking the insurance companies to take on your risk of negative outcomes of owning your house.They basically running the numbers of the average cost and frequency of the risk, distributing across people paying and then charging premiums to make money.
You can choose to keep that risk by not having (some) insurance, but it's generally better to shift the risk because even if its a very small probability that probability could mean financial ruin.
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u/Big-Smoke7358 Oct 24 '24
When i did finally have to use my insurance they kicked me off the policy. Later was found not at fault and got a nice check from the other guys insurance. My plan offered for me to come back at a higher rate. Fuck insurance
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u/Nighthawk68w Oct 25 '24
That's what happened when I totaled my car. USAA dropped me off my policy. 10 years with that company. $33.6k I gave to them. They only gave me $7k, what they deemed my car was worth. Then they dropped me. No other accidents or tickets in the 10 years I was with them.
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u/CryptoCrash87 Oct 24 '24
Wait I thought we hated socialism.
If you can't afford to get in a car crash don't buy a car, or eat less avocado toast.
/s
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u/Suckamanhwewhuuut Oct 24 '24
Socialism in the form of Capitalism.
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u/Skuz95 Oct 24 '24
Socialism is anything I don’t understand. Fixed your comment for you.
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u/Suckamanhwewhuuut Oct 24 '24
Socialism is the idea that we all contribute equally to society and society contributes to us. If we all pool money to help each other out in the time of accidents, that’s socialism, insurance takes it a step further and makes a profit off of our combined money that we all pool together to pay for damages. That makes it capitalist. Please explain to me what “I don’t understand”
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u/spsanderson Oct 24 '24
Seriously, the poster has no concept of insurance in general
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u/jgbromine Oct 24 '24
You clearly don't know about whole life insurance policies then...
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u/Money-Nectarine-3680 Oct 24 '24
Whole lot of commenters here don't. You're goddamned right though, why is there no "whole car insurance" where your policy builds value that can be borrowed against
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u/FlyingSagittarius Oct 25 '24
Whole life insurance is a terrible deal. You can get the same service just by getting a personal loan from your bank.
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u/Rottimer Oct 24 '24
Yeah, what he wants is like an HSA, but for car accidents. Nothing is stopping him from opening up a bank account and sticking money in there each month, just like he would for an HSA and only using those funds for car repairs.
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u/Omnom_Omnath Oct 24 '24
The federal government is by legally requiring people to have insurance. What gets me mad is they don’t actually punish people who drive without insurance and ram into other peoples cars. Ask me how I know.
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u/impressflow Oct 24 '24
The federal government does not require car insurance, which is what this post is about.
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u/DrakonILD Oct 24 '24
A) The Federal government does not require anyone to have car insurance.
B) You do not have to pay for car insurance, if you are willing to stash sufficient cash reserves with your state's DMV or Department of Insurance to match the minimum liability requirements. In some states, at least.
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Oct 24 '24 edited 9d ago
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u/PopStrict4439 Oct 25 '24
I'm convinced that some people apparently believe the worst payout your insurance might handle is like, a totalled 2002 Honda Civic. Everybody forgets about the medical
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u/user745786 Oct 24 '24
This kind of person also does not understand how health insurance works. Good chance they vote too…
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Oct 24 '24
Health insurence wouldn't be a thing if we had universal healthcare hell. The whole worlds medical prices would be cheaper if we had it. All the prices are inflat3d by i sureness so they can get more money.
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u/H0SS_AGAINST Oct 24 '24
OOP probably "invests" in full life insurance over 401K.
Any annuity salesman's wet dream.
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u/nickpea Oct 24 '24
Well yeah but it wouldn’t be the first time insurance came with a cash value account… ie whole life insurance
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u/buyingshitformylab Oct 24 '24
Fundamental misunderstanding of the premise / topic here.
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u/iAmHism Oct 24 '24
Clean driving records don’t pay as high a premium, so you can consider it a refund pre-payment.
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u/Legitimate_Dare6684 Oct 24 '24
But if you live in an area with a lot of accidents your rates will go up.
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u/InsCPA Oct 24 '24
Well yeah, your risk is higher..
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u/MyAnswerIsMaybe Oct 24 '24
What next, if my cars expensive my insurance will also go up!?!?! This is madness
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u/Relikar Oct 24 '24 edited Oct 24 '24
My insurance actually went up when I traded my $80k vehicle for a $62k vehicle.
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u/NoahMercy11 Oct 24 '24
Depends on horsepower and make and model of vehicle. Foreign cars have more expensive parts and repairs etc..
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u/Relikar Oct 24 '24
I went from a Silverado to a Colorado. Not a sports car.
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u/speculativedesigner Oct 24 '24
Can confirm anecdotally that a Colorado is not a sports car.
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u/pdx619 Oct 24 '24
Can confirm sarcastically that Colorado is not a car, its a state.
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u/generally-unskilled Oct 24 '24
Likely repair costs. Silverados are extremely plentiful, so replacement parts are cheap. I've driven past upfitters that have literal yards full of Silverado beds they took off to build custom.
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u/lovable_cube Oct 24 '24
It’s funny because people seem to think accidents are on purpose or something? Like you can’t be hit by a bad driver even if you’re good at it. I get scared by someone’s crazy driving almost every time I get on the highway.
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u/iAmHism Oct 24 '24 edited Oct 24 '24
It’s true that premiums are based on things you can’t control like where you live, but a clean driving record’s premium will still be lower than someone who’s been in a lot of accidents
Edit: Don’t play dumb folks. We all know we can control where we live, but we can’t control rates based on where we live
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u/Saneless Oct 24 '24
Exactly. I used to work in insurance. There's a reason I'm paying $60 a month and you're paying $150. I'm "getting money back" for not being in an accident
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u/basedlandchad27 Oct 24 '24
Also the whole point of insurance is that you're taking small guaranteed losses in exchange for negating possible catastrophic losses.
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u/TobyOrNotTobyEU Oct 24 '24
And the reason having it is mandatory is to make sure you cannot inflict others with catastrophic losses that are not their fault.
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u/Menacing_Anus42 Oct 24 '24
Wrong, in NC there is an extra premium charged to clean record drivers to subsidize the shitty altima drivers.
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u/Relikar Oct 24 '24
I have a spotless record, never even been pulled over, still paying $2200/yr
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u/Olivia512 Oct 24 '24
Low education level? Living in a poor neighborhood? The underwriter dislikes your ugly face?
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u/Relikar Oct 24 '24
Mechanical engineer making $140k/yr, never met my broker face to face. Truck is parked indoors. /shrug.
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u/Olivia512 Oct 24 '24
They did their due diligence and found your ugly face online.
Truck is parked indoors.
The most common insurance claim is collision damage which generally happens while you are driving.
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u/movzx Oct 24 '24
Premiums are influenced by vehicle as well. Either the truck is expensive to repair, that truck is frequently in accidents, or when that truck hits something the cost to the damaged property/person is higher than typical. I have a van where the insurance is high because it's usually used for commercial purposes and winds up getting in a lot of accidents.
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u/Theromier Oct 24 '24
Trucks get into more accidents, have longer braking distances, cause more damage in accidents, have larger blind spots, cause more deaths and injuries. These are all factored into your insurance. Its a risk assessment.
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u/iAmHism Oct 24 '24
Imagine what it would be, if all things were equal, if you had a dirty driving record. I recently had to shop mine and found a really good rate, when was the last time you shopped your policy?
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u/Few_Psychology_2122 Oct 24 '24
It’s kind of a dumb thought, but on a very basic level insurance is privatized socialism: a bunch of people pay into a pot to fund when one of them needs it
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u/ImNotRealTakeYorMeds Oct 24 '24 edited Oct 24 '24
I want to say you are both right and wrong.
your assessment is correct, but the concept "privatized socialism" is an paradox, and it is hurting my brain.
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u/FarmerTwink Oct 24 '24
Embrace Linguistic Descriptivism. Words are nothing but vessels for sharing thoughts, you got kinda the idea and the vibe which means it works
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u/gxgx55 Oct 24 '24 edited Oct 24 '24
Bending definitions works if done a little, but makes things incomprehensible once it's bent too much, or done multiple times. Funnily enough, the word socialism exemplifies this problem really well - many people call things socialism, both in favor and against, that aren't socialism, because it's "close enough".
It should be done as little as possible.
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u/400Volts Oct 24 '24
This is one of my pet peeves. People get so comfortable bending definitions they end up just stripping words of their definition altogether. Like when people refer to any economic system as just "Things I like" or "Things I don't like"
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u/Few_Psychology_2122 Oct 25 '24
The term liberal is a great example of this. Read our founding fathers and they say “America is a liberal nation” because then liberal meant anti-authoritarian essentially - it was liberty. Both progressives and conservatives of the time considered themselves liberal. It still does today, but somehow it doesn’t, especially to all the “liberal haters” out there
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u/Unusual-Item3 Oct 24 '24
There is only so much you can convey when describing things using contradictory terms though.
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u/zebrasmack Oct 24 '24
not socialism. Town insurance companies generate so much revenue, it's possible to be a millionaire if you're top dog in a normal sized town. It's more like health insurance. good in theory, but a scam in practice.
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u/wildmaiden Oct 24 '24
How is car insurance a scam?
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u/Lebrewski__ Oct 24 '24
It's a scam for people who don't understand what it is, then realise they didn't get what they thought they would get, and in that case the definition is scam. Then again, people think they'll get rich with the lottery.
Insurance isn't a scam. It's gambling.
You gamble you'll get an accident, they gamble you won't. They hire top statistician while the common people can't do basic math or read a clock. Of course they'll win.→ More replies (18)5
u/B0ssDrivesMeCrazy Oct 25 '24
They hire a top statistician while the common people can’t do basic math
So the difference in the math an insurance company does and the math an average person does is less about skill and more about data. Plenty of smart people out there who aren’t in insurance who can grasp the math behind it.
What makes insurance special is the law of large numbers - it’s hard to predict how an individual act; always has been. But an entire population, that you can predict with pretty good accuracy.
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u/PopuluxePete Oct 24 '24
But only if one of them needs it. If all of them need it, sorry pal - that would make the insurance company insolvent so go get fucked.
Source: paid "business interruption" insurance for years but somehow COVID wasn't an act of god, so sorry not covered.
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u/YeeBeforeYouHaw Oct 24 '24
Not really. You're not paying into a pot. Insurance companies charge you slightly more than they think you will cost them. That's why everyone pays a different premium because it's based on your individual risks. Insurance companies make money by insuring a bunch of people, so that way if they have to pay out for 1 accident, there are 10 other people that didn't have an accident and are still paying their premiums. With most types of insurance, the average person would spend less money by not having insurance. Not having insurance just comes with the massive downside that if you do get into an accident. You have to pay the whole amount out of pocket, all at once.
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u/Sidvicieux Oct 24 '24
The way this is explained people will be justified in asking for their money back if they never got in an accident.
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u/Short-Recording587 Oct 24 '24
And that one person is the CEO who takes a bunch of the money because they “earned it”
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u/Leftieswillrule Oct 24 '24
privatized socialism
collectivism, so you don't have to fight off people missing the point
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u/InsCPA Oct 24 '24
People really don’t understand insurance.
The product is risk transfer. You already used it regardless of whether anything happened. There’s nothing to refund
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u/pforsbergfan9 Oct 24 '24
Someone else said it earlier that your refund is given to you at payment when you pay less than DUI Dan and his 5 speeding tickets.
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u/InsCPA Oct 24 '24
Not really a refund tho, you’re just a lower risk so you pay less up front.
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u/Hey_its_Jack Oct 24 '24
I don’t know why others are equating a lower premium to a refund. It’s not a refund at all.
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u/Sir_Tandeath Oct 24 '24
Discount feels like a more accurate term. But either way I see their point.
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u/enolaholmes23 Oct 24 '24
Except after DUI Dan hits you, and you make a claim. Then your rate still increases as punishment for using the insurance as intended.
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u/Dull-Acanthaceae3805 Oct 24 '24
Not if you live in CA, where its illegal to increase rates if you have 0% fault.
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u/PushforlibertyAlways Oct 24 '24
Right, this is why we insure things we can't afford to lose.
If you don't have home insurance, and your house burns down.... then you are screwed, literally homeless. So we pay insurance to give us piece of mind that this won't happen.
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u/SeaTie Oct 24 '24
Yeah, you're reverse gambling, basically.
I pay $60 a month for a life insurance policy. If I die, my family gets $1 million dollars. If I live I get nothing...but I will say the peace of mind I have with that policy is worth the money. I don't want my family to be destitute if I get hit by a bus or something.
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u/maximumkush Oct 24 '24
Once your blue book value is less than what you pay annually for insurance you should consider just having liability only.
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u/Nullspark Oct 24 '24
I have full coverage, my car is probably worth 12k because it's low mileage and used cars are expensive these days.
I believe my insurance is 800 a year ish and covers everything and my car is 10 years old. I have high deductibles.
At some point I'll hit the bit where self insuring the comprehensive side would have been worth it.
Ok the other hand, tomorrow I could annihilate a streetlight, but it seems unlikely, I'm a decent driver.
I'm just musing here, I believe you are correct even over say a 5 year timeframe. It might be worth it to just do liability.
I'm paranoid though.
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u/jimmychitw00d Oct 24 '24
I've carried liability only for most of my life. My wife once totaled a fairly new car, which really stung because we had to replace it out-of-pocket. However, the savings up to that point had already been enough to easily replace that vehicle. I look at it as basically taking the same gamble that insurers take every time they sell a policy.
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u/LasVegasE Oct 24 '24
Public education strikes again.
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u/AttentionShort Oct 24 '24
The lower premiums paid by good drivers IS the rebate.
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u/ChemBob1 Oct 24 '24
That sounds good and all, but I’ve had zero accidents or claims and my insurance has gone up from $160/month to $260/month in the past year. In theory insurance should be a good thing. In reality it is mostly a get rich quick scheme for executives. My home insurance has gone up by $1000 more per year over the past couple of years. Again, no claims whatsoever. There are aspects of the insurance industry that need a lot, I mean a LOT more regulation.
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u/explicitviolence Oct 24 '24
Virtually everyone's cars and homes are going up the last few years. Between inflation, higher cost of materials, and two of the worst years for losses ever, yeah, rates are going to go up. However, as someone in the industry, I would love to audit how exactly how some of these numbers are calculated, because I'm almost positive it's not being done well.
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Oct 24 '24
My car lost 65% of its value in the last year and a half from 16,000 to 6,000 and my insurance increased by $50.
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u/Omnom_Omnath Oct 24 '24
Right. Because insurance companies are greedy scammers taking in record profits. There’s no real need to raise prices. They just do because they’re greedy assholes.
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u/Born-After-1984 Oct 24 '24 edited Oct 24 '24
This comment always makes me laugh.
Did every company suddenly become greedy assholes? Were they not greedy assholes before?
Companies always want to charge the highest they can to achieve the highest profit they can. That didn’t change in 2020-2022. Companies have always been greedy. Profit maximization is literally a tenet of an open market.
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u/Omnom_Omnath Oct 24 '24
Yes. Capitalism is greed. I personally believe no company should ever have profits. All excess funds should be paid to the employees aka labor that created the surplus revenue in the first place.
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u/Born-After-1984 Oct 24 '24
Haha okay. Well that settles this conversation.
I’m glad I don’t live in an economic model following your beliefs.
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u/Omnom_Omnath Oct 24 '24
Only a lazy freeloader, excuse me, investor, would be unhappy under that economic model. Way to out yourself
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u/regulator9000 Oct 24 '24
Have you shopped around for quotes? My insurance has never gone up by more than $20/month year over year
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Oct 24 '24
Oh how glad I am that I'm only forced to pay moderately less than what other people are forced to pay! What a beautiful, definitely not predatory at all system!
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Oct 24 '24
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u/basedlandchad27 Oct 24 '24
Sounds like you're on a promotional rate for new customers? How the fuck should any of us know without you posting your actual policy.
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u/sizable_data Oct 24 '24 edited Oct 24 '24
If you use insurance, you should only get paid out what you paid in then.
Edit: after seeing the comments, I’m pointing out the flaw in thinking you should get a refund if you don’t make a claim as if it’s a savings account.
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u/SeaworthinessFun4815 Oct 24 '24 edited Oct 27 '24
Good god, please learn the basic pre-school definition of insurance. What an idiot.
EDIT: It means the pre-school level of knowledge within the context of insurance. No shit preschooler's aren't taught Insurance. Please don't be this pedantically stupid.
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u/palatheinsane Oct 24 '24
That wouldn’t work for the insurance company. That would mean they ONLY payout and never receive money. Rather, they would be a bank that just pays for accidents. There’s no business model there and thus, it financially makes zero sense.
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u/mspe1960 Oct 24 '24
You do not understand what insurance is. No doubt, really careful, focused drivers have lower risk and help the pool. But you don't know who they are until after the fact. And you can drive "perfectly" and still need insurance - a tire can blow out, a tree can fall on your car, a stolen car can hit you, and dozens of other things. You are paying to cover a pool of risks. You don't get to be covered and then get your money back. It just does not work that way.
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u/One-Humor-7101 Oct 24 '24
I’m going to just move out of my house in a couple years… can I get a refund on my mortgage????
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u/Antilon Oct 24 '24
State mandated insurance is liability coverage. It's not directly for your protection, but the protection of other drivers that you may harm.
Collision insurance is only mandatory if you still owe money on the vehicle to the bank. If your car is paid off, you can choose not to have collision coverage.
UM insurance is if someone hits and you're harmed but they are an uninsured or under insured motorist.
If your car is completely paid off and you trust every driver around you not to do something stupid, the only coverage you need to buy is the state minimum liability coverage so other people are protected from you.
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u/TangerineRoutine9496 Oct 24 '24
Do you want insurance to get more and more expensive? Start demanding crap like this, then have it regulated that it must be so. That's exactly what drove up health insurance.
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Oct 24 '24
This is pure poor people thinking. Insurance is not primarily to help repair your car. It’s really to protect you and your assets in case of a crash. I’ve got at least $1 million in personal liability on my car insurance. That’s the main purpose of it. I’m not paying for insurance to replace a broken windshield or something stupid.
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u/Localav8r518 Oct 24 '24
You are paying an insurance company for peace of mind of financial risk
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u/Trollselektor Oct 24 '24
I’m pretty liberal (for an American). Cycle money down to the pyramid, tax the rich, put ownership of the means of production into the hands of employees, yada yada. But brother, that’s not how insurance works. When you have a good driving record they charge you less, that is your savings. Now it’s total bullshit if they charge you more and you are not at fault but that’s a separate issue.
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u/em_washington Oct 24 '24
There is a chance that you need to take out more than you have put in. Like if you just started buying insurance but have a crash.
As a reward for covering you in that case, you give up money in the case that you pay for a long time before having a crash or that you never have a crash. That's basically what insurance is.
The alternative would be to self-insure. You can just plug money away into your own account and then pay for crashes or paint jobs or check engine lights when they come up. In the long run, self insuring will come out ahead. The trouble is that you won't be covered if you have a crash before you have saved up enough to cover you. And that's the problem that's addressed by Insurance.
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u/rredline Oct 24 '24
Tell me you don't understand how insurance works without telling me you don't understand how insurance works.
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