Commercialism rant! (long but worth a read)

Procrastinator333

fimonkey wrote: »

I don't really think its fair because the insurance companies are using statistics incorrectly and not applying any common sense. It may be that there is a correlation between being young and male and being in an accident, but that is not cause and effect! You could look at the same data and look for correlations between hair colour and accidents (presuming they collected hair colour data) and you would likely find a correlation between a certain colour and accidents - do you therefore charge more for people with certain colour hair?.. again its merely a correlation!

You may argue that young males are more likely to speed - but again gender and age are not a CAUSE of speeding!

Stats can easily be misrepresented which is what the insurance companies are doing IMO. They're not looking for cause and effect with accidents/claims and weighting against known causes instead. For instance speed is a known cause, and your suggestion of a speed tracking device would easily collect this data for them to use, and be easily fitted to cars. You speed - you pay more insurance. THAT would be a fair use of statistics.

As an aside, did you know that statistically speaking the average person has less than two legs?!

As has been noted by many. If you can come up with a better way to price the risk of a driver and pick out those younger males who are actually safe drivers, you should set up your own insurance company. You would make a fortune.

Until that day, statistics are all they have available. You say it is just a "correlation" and I do appreciate what a spurious regression is, but if year after year after year, the 17-19 male drivers cost the insurance company 5 times as much as any other category in terms of payouts. It is not unreasonable to charge that band the most.

And on the grey hair colour - yes they are more likely to crash. I think 70+ is actually the age group most likely to have some kind of an accident. More likely than young males. The difference is the grey haired variety hit another car at 10mph. The over confident youth on the other hand wraps the car round a lamp post at 100mph. Even 10 grey haired accidents probably costs less than 1 young male.

P.s. Whoever made the comment about life insurance - Excellent point. Though no doubt that is fair for some other reason.

diable

Doozergirl wrote: »

There's a very easy way to save money on knickers and that's not to wear any.

Well hello ;o))))))))))

Procrastinator333

Percy1983 wrote: »

Very true, but in the case of home insurance the claim is most likely to be more than a single years insurance premium, to a young driver thats not always the case.

Yet again I am not against the fact that i have paid for insurance and got nothing back, I am against the amount I had to pay in to get nothing back.

The crux of your argument seems to be you don't like paying that much for insurance. Get over it, that is what it costs. Either don't drive or set up your own insurance company if you know of a better way to price risk.

fimonkey

Procrastinator333 wrote: »

As has been noted by many. If you can come up with a better way to price the risk of a driver and pick out those younger males who are actually safe drivers, you should set up your own insurance company. You would make a fortune.
.

But there is a better way and you stated it yourself! Speed/GPS recorders. If they monitored speed and your premium was based on this then EVERYONE would slow down and ALL accidents (due to speed) would be reduced.

SO back to my point that it is spurious use of statistics,- by lazy uninformed insurance companies.

PhylPho

fimonkey wrote: »

I don't really think its fair because the insurance companies are using statistics incorrectly and not applying any common sense. It may be that there is a correlation between being young and male and being in an accident, but that is not cause and effect!

Nobody ever said it was a case of cause and effect. Insurance is there to provide you with financial protection against risk. Insurers are there to protect themselves financially against levels of risk that might put 'em out of business. And just who benefits from that?

All that insurance companies are doing is looking at the accident stats for prevalence -- not cause / effect. If the accident stats show a prevalence of a particular driver age group / driver gender then they'd be commercially daft not to act in recognition of that.

As an aside, and purely anecdotal, I've been looking through the online archive of my local newspaper. There've been several tragic stories of multiple deaths in road accidents in our area. It's both sad and astonishing, the number of fatal accidents that have been single-vehicle incidents where two or three young people have died in a car being driven by a male aged under 21.

Are multiple deaths in single-vehicle accidents (that is, where a vehicle has been driven in such a way as to go out of control and crash) more prevalent amongst drivers under 21 or more prevalent amongst drivers over 21? I dunno. I'm not in insurance. But I'll bet the insurance companies have updated accident stats at their fingertips -- and react accordingly.

JonnyBravo

fimonkey wrote: »

But there is a better way and you stated it yourself! Speed/GPS recorders. If they monitored speed and your premium was based on this then EVERYONE would slow down and ALL accidents (due to speed) would be reduced.

SO back to my point that it is spurious use of statistics,- by lazy uninformed insurance companies.

Who would pay for this?
Oh yeah, the people being insured.
Any idea of a cost to run this?


As an aside I think speed is the important factor in a minority of accidents. Speed may be a contributing factor but it is poor decision making that is way higher and therefore more important.
How would you monitor this?

Doozergirl

fimonkey wrote: »

SO back to my point that it is spurious use of statistics,- by lazy uninformed insurance companies.

But it isn't spurious, they aren't uninformed and their systems of calculating are far from lazy - they are incredibly complicated and very clever. The data that they use is their own data from years and years of claims; there is an awful lot of that data. They can, and do, price their risks very finely indeed. They can profile exactly what model of car, type and age of driver is prone to what kind of claim arises, average kind of costs involved in each claim etc. The more data they collect from you at the beginning, the more detailed their analysis becomes.

Claims for fire, theft etc aren't based on speed. I doubt that the majority of claims are based on speeding cars either.

fimonkey

JonnyBravo wrote: »

Who would pay for this?
Oh yeah, the people being insured.
Any idea of a cost to run this?


As an aside I think speed is the important factor in a minority of accidents. Speed may be a contributing factor but it is poor decision making that is way higher and therefore more important.
How would you monitor this?

Actually I have no idea of the costs to run this - set up and continued running. Can anyone elighten us on this thread?

Also, speeding IS a result of poor decision wouldn't you say? Plus it is easily measurable by ways already suggested whereas decsion making skills aren't.

Agree it comes down to costs in thsi capitalist commercial world we live in - but long term costs such as reduced serious accidents from speeding (thus therefore reduction in A&E admissions for RTA) should also be taken into account.

A good statistical economist needed here.

fimonkey

Doozergirl wrote: »

But it isn't spurious, they aren't uninformed and their systems of calculating are far from lazy - they are incredibly complicated and very clever. The data that they use is their own data from years and years of claims; there is an awful lot of that data. They can, and do, price their risks very finely indeed. They can profile exactly what model of car, type and age of driver is prone to what kind of claim arises, average kind of costs involved in each claim etc. The more data they collect from you at the beginning, the more detailed their analysis becomes.

Claims for fire, theft etc aren't based on speed. I doubt that the majority of claims are based on speeding cars either.

Agree that their statistical modelling is complex - doesn't make it right though. In fact the best stats are the ones that are simple and easily understood, and are also tested for the 'does this make sense' factor? - Referring to the average person having less than 2 legs again. Its a statistical fact but it doesn't make sense because the wrong average is being used to reach the conclusion.

To use my own arguement - does it make sense that young males cause more accidents? The correlation is there, but the reasons WHY are not! - the reasons why could include things such as peer pressure, need to show off, no incentive NOT to speed or make poor deicision (after all they've paid a fortune in insurance - may as well use it!) Interestingly, In some states in Australia newly qualified drivers cannot drive at night without an older passenger and x yrs qualified drive present. Reduces the number of night time single car accidents I believe.

Also agree that the data they collect is detailed - but the collection of all the data in the world won't help you if you don't ask it the right question.

Becomes complicated when u also have to factor into account insurance is a business however, with the remit to make money as easily as possible. Maknig money and fairness are difficult concepts to reconcile IMO

Doozergirl

But who do you think is more likely to be making spurious use of statistics? The insurers or people having a random rant at the cost of insurance for young drivers? For their business, for their profit margins, for pricing to be so fine, I'd say the insurers are. It's not wrong to say that the average person has less than two legs. The same data says that the vast majority have two.

The data for young drivers causing accidents and high cost claims has to be irrefutable for insurers to price risk like that. It's a risk they do not want. If they wanted it, believe me, they'd be pricing accordingly low. If numbers changed, they'd bring the prices down for certain profiles.

I started driving when I was 23, when I genuinely needed to do it. Bought myself a nice new little car with free insurance. Still spent the money, just spent it in a more attractive way.