Is it fair that two people with identical driving records pay different insurance?

Question

Should men be discriminated against? (Car insurance)
How about blacks because BEING black is more likely though not necessarily going to have you live in a high crime neighborhood? (home owners insurance)

And here's the most extreme I've seen to date:
http://www.insurance.za.org/first-for-women-insurance-quote.htm

It doesn't matter whether I am get the big end or the little end of the stick, it doesn't seem right to me. I can understand changing insurance rates on the basis of past driving record, but for probable future record?

(Yes, I know that homeowners insurance is on the home, not the individual)

(Yes, I know that per month, women statistically will claim less insurance payment then men)

I know WHY insurance companies do it.
I do not know why we LET them do it.

I know full well that on average women will file less dollar claims per unit time than men, but this country does not, in general, permit discrimination on the basis of stereotypes ... no matter how valid those stereotypes may be.

Do we allow companies to discriminate between men and women when they hire based on whatever statistics the company management may have about who makes better employees (comes to work more often, etc)?

No ... we make them operate on the basis of PERFORMANCE.

Why do we let insurance companies stereotype us. Doesn't that encourage others to stereotype?

Again, I understand why insurance companies do it (they're in business to make a profit). Never-the-less, why do we, as Americans, put up with it?

Answer 1

NO, nothing the insurance companies do is fair.

Answer 2

Being in the insurance industry I've had plenty of opportunity to learn about the different factors that are used to rate an insurance policy and why they are used. The company I worked for did NOT use race as a rating factor. However, the crime rate in the neighborhood where a person lives is definitely a factor.

It may make more sense if you look at it this way:

Say you are a woman in your 20s and you live in a very safe neighborhood with a low crime rate- including low incident of vehicle theft. You have several things going for you just from this information. You are no longer a teenager (that just lowered your rate), you are a woman (just lowered it some more) and your neighborhood is safe (down even more). Why? Let's start with your age. At this age, women are very safe drivers (the guys may beg to differ, but it's true). The fact is, women tend to get in fender-benders because they were talking on their cell phone or putting on their lipstick while driving. This isn't good, but it's different than the way a man of the same age would drive. Men typically get in bigger accidents because of the aggressive nature of their driving habits at this age (don't worry gentlemen, give it a few years and the tables will turn). Teenagers have a huge accident margin, so being in your 20s also helped you out there. As far as crime rate, vehicle theft, vandalism, etc has to be factored in because the insurance company has to allocate enough money for your region to make sure they can cover the costs if it happens to you. Also the accident rate in the area will have an effect. Even being married lowers your rate because statistics have proven that a married person typically drives more carefully (probably because they don't want to get yelled at by the ball-and-chain for getting a speeding ticket).

Now if you think about all that, and then think about someone who lives in an area where there are lots of accidents (say a bad intersection where cars always tend to pile up) and cars are being stolen left and right. Their insurance rate can and definitely should be different. If the insurance company didn't look at those factors, you would pay more for other people's bad driving and bad neighborhoods, and they would pay less because of your good criteria. It isn't fair for someone who has a security system, locks their car up in the garage at night, and always drives the speed limit to pay more insurance because someone 40 miles away parks their car on the street and tends to be in a race on the way to work.

That being said, I personally believe that insurance rates should be much lower than they are. Insurance companies make a killing and they know it. :-) Hope this answer helps clarify for you! :-)

Answer 3

Blame this one on the bean counters. They are the guys that run the numbers and from historical data, they know how likely you are to file a claim. There is nothing personal about it. It is all math.
When I was young and on the wrong end of the stick, no I didn't like it either. But I could understand it. It is all the stupid stuff that people do. If they are in your bracket, as for as insurance companies class you, then they think you are more likely to do something stupid too.

The next time you are driving down the road, and some teenager flies past you or weaves over into your lane, realize that is why you are paying extra dollars. You're the one paying the bill for his cumb actions. good luck.

Answer 4

Compare quotes for free at - ASSURECOMPARE.INFO- RE As a male with an excellent driving record, why am I forced to pay more for auto insurance because of others? who have a poor driving record, and who happen to be the same gender as me? Why does having male chromosomes make me responsible for the poor driving record of other people just because they happen to be the same gender? Why does having a uterus make women NOT responsible for those same people? Why is there so much gender discrimination in auto insurance?

Answer 5

Nobody said life was fair. Insurance rates are based on examination of risks. If you live in a high crime area, you are statistically more likely to make claims, if you are above/below a certain age, you are statistically more likely to make claims. It is what it is. Get over it.

Answer 6

They do the risk assessment on all sorts of criteria such as the vehicle type, your age and the length of time you have held a licence, if there are any accidents you have been involved in, any convictions you may have and the area the vehicle is based. Its a real bummer but they have you by the short and curleys as you need to use them to get your car legally on the road.

Answer 7

What many of the other posters said is true,
they also look at your credit rating

Answer 8

no