Children under 16 in the car without stating it on the insurance

TripleH

NBLondon said:

lemondrops69 said:

Car_54 said:

Do car insurers ask whether you have kids? I don't recall that.

Yes they do, they ask how many children under 16 you have

Never been asked that.  I'm assuming the logic is "Family Person with Children" is assumed to be more sensible than "Single and Childless".  It's only one factor though.

You've not seen my little brother or FIL driving then...

To be fair to my FIL he lives in Cyprus where you go fast to minimise the effect of the potholes...

Sandtree

Ebe_Scrooge said:

Sandtree said:

born_again said:

Children in car = Distraction = less attention on road = higher chance of accident = higher premium 🤣

Can go both ways... you're going to struggle to look cool racing the hot hatch next to you off from the lights with your 6 month old in their baby seat next to you and some of their vomit still on your shoulder

Yup, that's the nub of it.  On the one hand you're a lower risk as you're going to drive more carefully than a boy-racer, on the other hand you're a higher risk as you've got more distractions.

That's the reason the question is asked at all - it's simply another factor in the risk weighting.  But who really understands the dark art of risk profiling that underwriters are privy to, and whether kids in the car actually represents an increased or a decreased risk????  Well yes, it's all just based on statistics of course, and I know it can get pretty complex when assigning different weightings to different factors, of which there are many.

Normally the pricing chaps rather than the underwriters when it comes to this sort of thing. 

If you assume people tell the truth when answering the questions then the analysis of it as an isolated factor is fairly basic statistics to see if there is an impact on exposure. Where it gets more complex is if you decide to see if there are compounding factors... does it make more of a difference to policyholders who declare themselves as "single" marital status or "married" or not? With IT capabilities you can look for all sorts of correlations even if the reason for them may not be obvious

Even the last time I worked in personal lines, which was a while ago, there was plenty of discussions going on about pulling in "Big Data" to look for new potential rating factors... we'd already introduced credit score as one, was looking at vehicle colour at the time but more interest was looking at social media and seeing what could be gathered about a person there and used to look for correlations with exposure as possible future rating factors.

NBLondon

Sandtree said:

Where it gets more complex is if you decide to see if there are compounding factors... does it make more of a difference to policyholders who declare themselves as "single" marital status or "married" or not? With IT capabilities you can look for all sorts of correlations even if the reason for them may not be obvious

This is where people start to get twitchy about algorithms including the bias of the programmer.   e.g.  someone could be single AND have multiple children - but does that mean they are a) a sensible/stable family person who just isn't married to their partner  b) a divorced person who drives hundreds of mile to see those children  c) a waste of space who abandoned those children but declares them because they think it will make them look like a) and get a lower premium?

Or do you just do it by actuarial processes and previous claims?

user1977

Ebe_Scrooge said:

Sandtree said:

born_again said:

Children in car = Distraction = less attention on road = higher chance of accident = higher premium 🤣

Can go both ways... you're going to struggle to look cool racing the hot hatch next to you off from the lights with your 6 month old in their baby seat next to you and some of their vomit still on your shoulder

Yup, that's the nub of it.  On the one hand you're a lower risk as you're going to drive more carefully than a boy-racer, on the other hand you're a higher risk as you've got more distractions.

It also means additional passengers to potentially sue their driver for injuries.

Sandtree

NBLondon said:

Sandtree said:

Where it gets more complex is if you decide to see if there are compounding factors... does it make more of a difference to policyholders who declare themselves as "single" marital status or "married" or not? With IT capabilities you can look for all sorts of correlations even if the reason for them may not be obvious

This is where people start to get twitchy about algorithms including the bias of the programmer.   e.g.  someone could be single AND have multiple children - but does that mean they are a) a sensible/stable family person who just isn't married to their partner  b) a divorced person who drives hundreds of mile to see those children  c) a waste of space who abandoned those children but declares them because they think it will make them look like a) and get a lower premium?

Or do you just do it by actuarial processes and previous claims?

Mass market general insurance products tend to be more statistical than actuarial driven but yes the theory goes that the maths identifies the correlations that are statistically relevant, the programmer builds the algorithm based on that (or builds the AI that will build the algorithm) and then the statistics kick in again to give the rating factors.

The bias however still risks existing by deciding what potential correlations to look for, in theory that gets easier with powerful computers and AI where it can look at all options. The next having found correlations is deciding which to implement and it'd be a brave insurer to decide to implement rating based on religion or sexual orientation even if the statistics showed a strong correlation that evangelical Christians had more accidents than Buddhists or  the average gay claim settlement is higher then the average lesbian claim settlement.

Insurance works on averages and has to consider people both missunderstand questions or simply lie. Insurers try to be specific about the Qs... how many children in your household rather than how many children have you sired... with big data comes more chances to check the answers or even find the answer without asking; no issuer asks "are you in financial distress?" but some do use a credit score to answer that question

Actuarial get more involved in long tail business like Protection Insurance or Annuities where duration and investment income etc are all more fundamental to the calcs or non-mass market insurance where the data sets are too small for statistical relevance... used to sit next to a pricing actuary that did pricing for reinsurance on satellite launches, interest stuff but not a big talker.

Grey_Critic

I used to be a Scout Leader - Outdoor Pursuits Instructor and a Canoeing Coach,#. At various times I had young people in the car when travelling between places although only if it was an emergency. I also had several CRBs but not as many as some I knew. We never thought much about the insurance angle really as.

Sandtree

Grey_Critic said:

I used to be a Scout Leader - Outdoor Pursuits Instructor and a Canoeing Coach,#. At various times I had young people in the car when travelling between places although only if it was an emergency. I also had several CRBs but not as many as some I knew. We never thought much about the insurance angle really as.

Assuming you were being paid something in those roles then your issue isnt about having undeclared children in your vehicle but that transporting your customers, even in an emergency, could be considered Hire & Reward and so void your insurance

tr7phil

Sandtree said:

Grey_Critic said:

I used to be a Scout Leader - Outdoor Pursuits Instructor and a Canoeing Coach,#. At various times I had young people in the car when travelling between places although only if it was an emergency. I also had several CRBs but not as many as some I knew. We never thought much about the insurance angle really as.

Assuming you were being paid something in those roles then your issue isnt about having undeclared children in your vehicle but that transporting your customers, even in an emergency, could be considered Hire & Reward and so void your insurance

Every now and again I've come across a parent who is under the misapprehension that Scout leaders are paid, it leads to some interesting conversations until the penny drops!

Grey_Critic

***Every now and again I've come across a parent who is under the misapprehension that Scout leaders are paid, it leads to some interesting conversations until the penny drops! ***

Thanks for that - The only time I ever got paid in nearly 30 years of undertaking all the various activities I did was when I was invited to sit on a committee organising a Regional Event - and that was mileage.

I paid all my own training costs and once, when I received a local authority grant I donated it to the organisation I was working with.

All I can say about it all is I was not the only one who did that.