close

Privacy guaranteed - Your email is not shared with anyone.

So what's the downside to a tort insurance system?

Discussion in 'Sound Off (MichiganForums.com)' started by DirtySteve, Feb 12, 2018.

  1. pescadero

    pescadero

    Messages:
    15,596
    Likes Received:
    3,222
    Location:
    Ypsilanti, MI
    Credit scores correlate with number and cost of claims.

    [​IMG]

    "A 2003 study done by the nonpartisan Bureau of Business Research at UT’s McCombs School of Business, confirmed this correlation. Study author Bruce Kellison explains that there is a relationship between how much a consumer costs an insurance company (aka incurred losses) and that customer’s credit score. Kellison and his colleagues examined more than 175,000 separate policies, and found that the average loss per policy, across the entire dataset, was $695. But for those policies in the lowest 10 percent of credit scores, the average shot up to $918."

    There are even some studies that show credit score to correlate more with incurred losses than driving record.
     
    mbirdsley likes this.
  2. jatc

    jatc

    Messages:
    2,178
    Likes Received:
    807

    There is a proven correlation between poor credit score and higher chance of getting into an accident. Why exactly, I have no idea, but every Actuary will tell you there is based on the numbers.

    Where you live is a definite issue based on likelihood of getting into an accident (based on sheer number of claims in the vicinity) or having your car vandalized or stolen, as well as what percent of the driving population in the area is driving uninsured (your insurance will have to pay more of the bill even if it isn't your fault).

    Insurance companies are about making money. Period. It is all about risk assessment of all factors when determining what the monthly premiums will be. Whether it is "moral", or "fair", or "right", is not even on the radar when you have to answer to stockholders quarterly.
     
    Far Beyond Driven likes this.

  3. pescadero

    pescadero

    Messages:
    15,596
    Likes Received:
    3,222
    Location:
    Ypsilanti, MI
    How likely is your car to get stolen? Do you think that changes based on where you live?

    How likely are you to be in an accident with an uninsured motorist? Do you think that changes based on where you live?

    How likely is a chipped windshield from gravel on the road, or a bent rim from hitting a pothole? Do you think that changes based on where you live?

    How likely are you to slide off a snowy road and crash? Do you think that changes based on where you live?

    Etc.,
     
  4. Far Beyond Driven

    Far Beyond Driven

    Messages:
    7,413
    Likes Received:
    4,594
    Location:
    Holland, MI
    How about anyone that rides a motorcycle without a helmet has special insurance? I don't want to pay for people that don't want to wear helmets.

    How about anyone pulled over who is not wearing a seat belt pays for more insurance? I don't want to subsidize people who don't care enough to buckle up. I don't want to get hit with a stronger air bag designed to the 10% that won't buckle up.

    How about anyone caught drunk driving has to pay for special insurance? Anyone caught texting?
     
  5. pescadero

    pescadero

    Messages:
    15,596
    Likes Received:
    3,222
    Location:
    Ypsilanti, MI
    Actually - that may not be true. There is some evidence that those with lower credit scores are just more likely to make a claim after an accident.
     
  6. Far Beyond Driven

    Far Beyond Driven

    Messages:
    7,413
    Likes Received:
    4,594
    Location:
    Holland, MI
    My rates went up significantly when I moved from about 2 miles into Ottawa County to 2 miles into Allegan County. I can almost literally see my last house after moving, but my rates went up a lot.
     
  7. pescadero

    pescadero

    Messages:
    15,596
    Likes Received:
    3,222
    Location:
    Ypsilanti, MI
    They're supposed to.

    To legally not wear a helmet, a motorcycle operator must:

    Be at least 21 years old.
    Have at least $20,000 in first-party medical benefits.
    Have held a motorcycle endorsement for at least two years, or have passed an approved motorcycle safety course.


    Having a seat belt ticket on your record will raise your insurance rates.

    Generally anyone with a DUI is in a "high risk" pool and paying WAY more for insurance. I've known people paying $1,000/month for PLPD.

    Having a distracted driving ticket on your record will raise your insurance rates.
     
  8. jatc

    jatc

    Messages:
    2,178
    Likes Received:
    807
    That actually surprises me. Not saying I don't believe it, it just seems odd because most of the people with poor credit also have the highest deductibles which seems like less of an incentive to turn in a claim. Of course there are a lot of shops that will "work" with those high deductibles, ie insurance fraud.
     
  9. pescadero

    pescadero

    Messages:
    15,596
    Likes Received:
    3,222
    Location:
    Ypsilanti, MI
    Bet your property taxes changed also... and your polling place.

    Much like DMUs for managing deer populations - they can only be so fine grained.
     
  10. david boyko

    david boyko

    Messages:
    1,550
    Likes Received:
    1,728
    Location:
    detroit
    I was hit by an unliscenced un insured unregisterd vehicle driver arrested and it cost me 2000dollars out of pocket how is that fair
     
  11. david boyko

    david boyko

    Messages:
    1,550
    Likes Received:
    1,728
    Location:
    detroit
    was also a victim of road rage a couple months ago had to pay my own deductible how is that fair
     
  12. david boyko

    david boyko

    Messages:
    1,550
    Likes Received:
    1,728
    Location:
    detroit
    car insurance is nothing but a scam money I pay them could go into an escroe account and I would have money leftover and my own health insurance could cover my medical even then the insurance wont pay because I do have medical
     
  13. Far Beyond Driven

    Far Beyond Driven

    Messages:
    7,413
    Likes Received:
    4,594
    Location:
    Holland, MI
    Those should all pay into the higher injury fund.

    I pay higher insurance for speeding, but have never caused an accident in over 1 million miles of driving. I filed a claim for a deer hit, and a stone chipped windshield, that's it in 27 years. Doesn't seem quite fair. Then someone texting causes $7700 damage to my truck when she run a red and corner punched me, and I have to pay the deductible and lose 6 weeks of fishing as the loaner Malibu didn't have a hitch.
     
  14. Far Beyond Driven

    Far Beyond Driven

    Messages:
    7,413
    Likes Received:
    4,594
    Location:
    Holland, MI
    Not so sure about the property taxes. Was renting then went to owning. I did learn that if you close after a certain date you can't claim homestead your first year. That and the house hadn't been sold in 20 years so the SEV adjusted a lot. That SUCKED! Was expecting like $800-900 a year and got about $5k the first year - the only time in my life I carried a credit card balance.
     
  15. jatc

    jatc

    Messages:
    2,178
    Likes Received:
    807

    If you have $1000 deductible and the other driver is uninsured, your auto policy carrier will not be able to collect the $1000 due them from our "mini tort" law from the other driver. Some policies will pass that on to you. That is how you end up paying $2000 to fix your car. Gotta read the fine print on your policy. You pay less of a premium but take on more of a risk with that type of policy.

    Personally I feel it should be illegal to pass it to you, but it isn't, but of course the Agent isn't going to tell you this when he is quoting you insurance, or he did but most don't understand what it means at the time.