a scam called insurance
this whole auto insurance thing looks like a scam to me. I don't know on what basis they change our premium amount. we pay upfront so that we can get coverage when something happens. then why does the insurance company increase the premium amount after an accident? because we claimed? but we have already paid. and now we also pay for the costs incurred by the insurance company.
If the claim is immediatley after a new policy, then charging some amount is definitely justified. but the curve isn't that linear, its rather a constant one (which again is linear, but in a totally different way) :) No matter what, you get charged. and keep paying for the next 5 years, as their database remembers you for a long time :) and not only that, it even informs its cousins (read rival insurance companies) about your conduct :)
and they rely on some exotic surveys to come up with the numbers. here is an example: farmers insurance offers a 15% discount if you have a masters degree :) I really want to know how these surveys are carried out.
all this happened to some friends of mine. they had no other way out but pay more.
7 Comments:
Put it all in one word.
Its BS.
I am not sure who does these surveys. Someone did some kind of Sampling, did a survey and found out the Master degree holders are better drivers.!
Bottom line - We can't drive without Insurance,so they'll do whatever they want.
narayanan, yes the bottom line is we have to take insurance. it is mandated by the state.
Manoj, after a few yrs, if you calculate the total amount you spent on insurance, I'm sure it wouldn't scale to the amount you claimed till then. didn't your premium go up after that accident. machi its not going to be the same, they'll keep increasing it, citing the same accident.
$5000 for that minor thing was atrocious. also you are right on the litigations and trauma stuff. somebody is having a free lunch and we are paying for it.
INsurance is one of the most profitable businesses world over and the US is no exception. When 9/11 happened, people thought insurance companies and reinsurers would be doomed. Surprise, surprise. They announced better than before results since they could now charge much higher for life and building insurances.
The way your premium is arrived at is a joke. They have margins which they move accordingly based on how desperate they are to meet sales targets. Ever heard an online quote saying 1300/6 mos but for the same coverage, getting settled finally at 600/6 mos. It happens..and no questions asked.
Ok I guess the liability insurance is a must. since it covers the damages to 3rd party as well, I will live with it.
But here is what people can think about the insurance that covers their own car (comprehensive and collision insurance) ---
If you have the money to buy another car, not necessarily a new one, then don't take the comprehensive insurance. Its a waste of money. the savings could actually compensate almost all the damages to your existing car, over a period of time.
A logical question - What if I keep crashing my car every yr?
Ans: Then nobody is gonna insure your car :) even otherwise the insurance costs are going to be exorbitantly high.
valid points Ranga.
manoj, here is another suggestion. what if the insurance companies are shielded from the mindless litigations. let the driver at fault deal with it.
the insurance companies should still pay for the property damage and medical expenses. the govt should probably come up with a guideline for the damages that the insurance companies could be made liable for.
agreed it will be a tough job, but I guess a decent job can be done.
I guess the same holds true for medical insurance as well, where we see countless malpractice claims.
u can never get to the bottom of this stuff.
same thing happens here - ridiculous premiums, mindless litigations et al. there was a big debate on TV recently abt this, which obviously ended without any conclusion.
240, damn man thats very cheap.
Jagan, it only helps in filling a few people's pockets :(
Chakra, these things will go in an endless loop. nothing can be changed overnight, but we can atleast move forward.
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