Interesting Info About Auto Insurance

[The Critic]

A guy on another forum received the following reply from his insurance agent. Is it really true that turning 25 no longer gives you an automatic rate reduction?

Quote:
Unfortunately age no longer is a factor, so turning 25 will have no bearing on the rate. The only factors now are the number of years of driving, which after 3 years everybody pays the same and driving record for tickets and accidents. The points for your accident will stay on for a three year period, starting this October. After 3 years the rates will come back down to what ever the normal rates are at the time.

What many people do not understand about the penalty for the accident is this. Most people are under the assumption that the insurance company gets the money that is being charge because of the points. That is only partially true. It is a state law that we charge the points and increase the premium. The state gets the vast majority of the penalty to put in the high risk pool they designed called the facility. This is similar to an assigned risk pool where high risk drivers are placed. Generally, the high risk drivers could not get coverage from standard companies like State Farm, so the state formed the facility as a source for high risk drivers to get insurance. Because these drivers cause more damage than the money collected in premiums, the state has to get the money from somewhere, so guess who pays. As in most cases in our society, one person is subsidizing another....


http://forums.anandtech.com/messageview.aspx?catid=85&threadid=2200840

 

[mrsilv04]

Another thing that insurance companies may consider is your credit score. They'll give bigger discounts to those with higher credit scores.

They figure you'll be more likely to pay on time, and be more careful with what you own.

 

[Kestas]

Some of this may be due, in part, to a lot of immigrants driving on our roads.

On average, I would expect a 23-year-old that grew up in America, having observed the customs on the road from an early age, and with 7 years experience driving on American roads, would be a better driver than a 30-year-old immigrant with one year experience.

Even with my 35 years driving experience, I know how apprehensive I get when I drive in a foreign country.

 

[The_Jeff]

Possibly they're going with years licensed over age to avoid some sort of discrimination issue.

Good reason to get your license in high school even if you don't plan to drive in college... you don't own a car so you're not paying insurance, but gaining years of "experience" you can use for a lower rate later.

Assigned risk is a rip. They could have the same effect by requiring insurance companies to quote a price for anyone with a valid license, even if it's $12,000 a year... and let the market deal with it. And keep programs like SR-22 around to ensure they keep it.

 

[Gary Allan]

Everyone who is not under another driver's policy in PA is considered "assigned risk" as a newly insured driver. This includes anyone who has had a lapse in insurance. You can go to any insurance agent and apply for it, but whomever is due to draft from "the pool" will be your company. That is, you may sign up with a State Farm agent ..and end up with All State.

 

[01rangerxl]

I think that is the way it works here. I was on my mom and dad's policy until last year. I went with Geico, who threw me in the high risk pool or whatever. I do not technically have anything on my record, but I was thrown in anyway. It doesn't seem to affect me. My rates are low and I have had no issues so far, but I haven't had to file a claim either.

 

[artificialist]

I have read all kinds of horror stories about China. At one time, practically everybody used pedal power, or rode public transit. Now the unprepared roads are filled with inexperienced drivers.

China has fewer cars than the USA, but already their number of accidents is higher than the USA.

 

[Gary Allan]

Originally Posted By: artificialist
I have read all kinds of horror stories about China. At one time, practically everybody used pedal power, or rode public transit. Now the unprepared roads are filled with inexperienced drivers.

China has fewer cars than the USA, but already their number of accidents is higher than the USA.


If you saw the ancient film footage of major cities when the car and horse and buggy shared the same roads with NO TRAFFIC LAWS ..it was pure chaos. Roads were not up to the task of coping with the horseless carriage ..nor was the society in general.

 

[moribundman]

Originally Posted By: Gary Allan
Roads were not up to the task of coping with the horseless carriage ..nor was the society in general.


Some drivers still should be required to have a guy carry a lantern in front of them.

 

[Buffman]

I just called around to 3 places for quotes this past week as I need to get my own since I've lived away from home for a year.

All three places (all-state, Farmers, State Farm) stated that I fell short of the 25 year old mark (durr I know how old I am -22), and they rate reductions would take place at 25.