Should Insurance Be Sexless - Martin's Blog & Site Vote

charliegeorge2004 wrote: »

I currently work for a UK insurer and quite simply if this becomes law all insurers will increase rates to the higher risk levels. However, going forward occupation will have a bigger impact on rating information - eg majority of primary school teachers are female and this means statistically they will be better drivers. Sorry guys women are safer drivers on the whole. Whilst this means increased premiums the insurance industry doesn't really want it as the admin is a huge headache and cost.

I can see that insurers would lean towards pricing everyone nearer to the higher risk factor rates. They are businesses and they want to make money. However, to partly counteract this, do you think that there might be a move towards bigger no claim discounts - thus rewarding individual responsibility? Also, is there any room in the legal discussion for imposing much higher excess charges on those who have been stereotyped as a bad risk (this already happens to some degree?).

Martin asks about using biology vs. behaviour. That is probably a reasonable rule of thumb but there will always be exceptions.

My own situation with insurance is that I am always priced too high (or rejected) for life or health insurances that ask anything more than basic questions. Is it reasonable that I am assessed in this manner because most people who have been drug addicted either die very young or have serious medical issues and never actually break free from their addictions. I have been abstinent from all drugs including alcohol for a quarter century. Medical checks reveal that I have no damage apart from some very faint, old scarring on the arms. Some would argue that I deserve to be assessed negatively by a potential insurer - though maybe they should look at whether they want to punish me or whether they are looking at the cold, hard facts.
So how far should insurers go in loading premiums and what sort of risks should they be permitted to take into account and which to ignore?
Personally, I feel that it would be fair for an insurer to load my premium slightly on the grounds that there may be some permanent damage that is undetectable as yet (unlikely). However, they should also have the right to cancel the policy without refund if I did not maintain my state of abstinence (a state with which I am perfectly happy even when life seems like rubbish) because it would be unfair to force an insurer to maintain cover for someone whose addiction has re-activated.
Under some definitions, drug addiction (probably wrongly) is classified as a disability. Would denial of cover, or extreme loading, be a case for the Disability Discrimination Act - or would it be reasonable to load due to past behaviour.
BTW. I'm not trying to argue in favour of addicts (whether active or recovered) being allowed such insurances. I'm just bringing it up to make the point of "how far should we go down this route?".
I have deliberately gone to the more ridiculous end of the argument as a sort of devil's advocate.

Paulgonnabedebtfree wrote: »

My own situation with insurance is that I am always priced too high (or rejected) for life or health insurances that ask anything more than basic questions. Is it reasonable that I am assessed in this manner because most people who have been drug addicted either die very young or have serious medical issues and never actually break free from their addictions. I have been abstinent from all drugs including alcohol for a quarter century. Medical checks reveal that I have no damage apart from some very faint, old scarring on the arms. Some would argue that I deserve to be assessed negatively by a potential insurer - though maybe they should look at whether they want to punish me or whether they are looking at the cold, hard facts.
So how far should insurers go in loading premiums and what sort of risks should they be permitted to take into account and which to ignore?
Personally, I feel that it would be fair for an insurer to load my premium slightly on the grounds that there may be some permanent damage that is undetectable as yet (unlikely). However, they should also have the right to cancel the policy without refund if I did not maintain my state of abstinence (a state with which I am perfectly happy even when life seems like rubbish) because it would be unfair to force an insurer to maintain cover for someone whose addiction has re-activated.

Although this is off topic, if you have truly been abstinent for 25 years and you don't have any other problems which can be associated with drug addition like mental health issues or another addiciton like alcohol (yes I know I'm generalising but I haven't got time to be more specific!) then you should be accepted at standard rates for life and critical illness cover and probably disability cover as well. Most companies accept people with a history of heroin addiction (the highest rated) after six years or so of abstinence.

What you propose about changing terms after the policy is in force would be totally impractical. For a start we have enough trouble getting applicants to tell the truth before their cover starts, they would never tell us of health problems once the policy was in force! And where would you draw the line - would people have to tell us if they had a heart attack, or put on wieght or took up smoking? It would not only be impossible to police, but the point of insurance is you apply and once you are accepted you have certainty over your cover for the whole term of the policy, so whatever happens to you provided you told the truth on your application form you are guaranteed the cover you paid for.

Anyway back on topic, hot off the press, it looks like the ECJ have upheld the challenge but it won't come into force until the end of next year...

I may be going off on a tangent here but I believe
this has ramifications in the way insurance premiums will be calculated in the future.

I can see the pros & cons behind this change and the points made on this forum.

However, if this is implemented then it opens a can of worms. Based on this premise, will this mean in future that all types of insurance claims are standardised?

Taking home insurance as an example: if someone lives in a 3 bedroom house in a crime ridden estate will they be entitled to the same premium as someone who lives in a similar property in a different area where there is no crime?