Ontario’s Auditor General’s report criticized car insurance companies. It says that insurance companies charge clients based on the area of residency that makes the poor pay more. That is understandable for poor people it is like shooting fish in a barrel. However insurance companies cannot afford to upset the rich and powerful although they cost them the most with their expensive cars and reckless driving because it is a guarantee that a change would come immediately. Then the news said that NDP stopped short of accusing insurance companies of discrimination. I guess because they have to be diplomatic. Well, I do NOT have to. As a matter of fact I would say they practice the most racist blunt policies; here is the proof. In addition to the above when contacting an insurance company through any media (web, teleph … etc) for quotation the company insists on getting your name and if you refuse they deny the quote. Why is that? Quotes are supposedly based on driving habits and history not on names!! The only uses for names that I could see are: guessing your race, find out what you are paying at present and broadcasting their quote to you i.e. racism, price fixing and eliminating competition. Before any one say it is to check on driving history let me remind all that this is quotation stage. Out of say 4-6 companies you contact only one gets your business. Also works the other way, out of probably 10 or more RFQs the company will get one buyer. So it is obviously a waste of time and efforts to check on any person at this stage. All the questions should about driving habits and history (I have some issues with that but it is another story) and based on that the quote is given. When the client comes back for purchase then the company can ask for name and starts checking process to make sure that the information given is correct to make the quote legal otherwise if there was misleading info then the quote is invalid. That would make the process very efficient and most of all FAIR.
Insurance companies discriminate
- Thread starter grunt
- Start date
You do realize that insurance companies are aware that they make demographic assumptions, right?
It's how they rate your insurance policy.
It's how they rate your insurance policy.
I am not sure of what you mean in your comment. Any way that is the problem insurance companies should not base rates on any assumptions and factors that has nothing to do with driving skills. Driving skills (or lack of) are what cause accedents and cost insurance money. Your example is not realy valid where people live has nothing to do with driving skills while age deos affect driving skills in a high percentage of people. I cannot find a link between residency and driving skils and if there is one it is a very weak almost nonexistant. Even if we concede that residency is a factor; which I mentain it is not, some examples given in the news were almost double and there is noway in hell that these faint factors could justify these huge differences. On the other hand there are a lot to explain the high rates in Ontario for some: racism, price fixing and lack of competition. I lived in the US and on my return I found that I had to pay double what I apid in the US!!! By the way my records are clean.
There is a link between where you live and accident frequency. That is why the rates vary according to the part of the province you live in. Also between age and accidents. That is why inexperienced pay a higher rate.
In B.C. we have mandatory socialized car insurance. We all pay more than we should have to so that inexperienced drivers don't have to pay their fair share. Good drivers get a discount and too many accidents or points will get you a surcharge but no one with a valid license can be turned down for insurance.
It's true: cars are never stolen or vandalized, and there is no correlation between where you live, and insurance claims.
Yep, it's true: you read the article and understood it. I do not know if you have insurance or know what the terms of your insurance are but theft and vandalism are OPTIONAL coverage. If companies want to charge 10 million dollars for that I have no objection; people have the choice. We are talking about BASIC insurance the kind the government forces people to have. Do you know what a basic insurance covers? If you want to be sarcastic I suggest that you read, digest and understand it then make your comment. You know; I thought that some people who try to prove anything will try to make a link whather it fits the discussion or not and here you are. I did not want to get into a discussion like this and in my response I left the door open saying may be there is a link. One more thing before I go just to show that you raelly did not think this one through. In poor areas peolpe have old cheap cars so who do you think in these areas would need theft and vandalism coverage for a 1990 neon or whatever? They probably fight with insurance companies to get the bare minimum and leave out everything they can get away with. That attitude is exactly what gives companies like these the opportunity to fleece everybody and that includs you too. I am sure if you are not working with them you are being fleeced.
I assume you meant something by what you've posted, but who knows what you meant. Other than to leap to conclusions about someone you know nothing about.
Poor people are more likely to park in a garage and never have thieves or vandals in their neighbourhoods. It's a fact.
Grunt - long story short, it's an assessment of risk based on demographics.
I can see why you find it appalling (and to a large extent, I actually agree), but risk assessment is an important part of the industry.
I can see why you find it appalling (and to a large extent, I actually agree), but risk assessment is an important part of the industry.
"Risk assessment based on demographics" is acceptable because it is closely related to risk as I have mentioned in my reply however not because one factor is real does not mean everything else that the companies want can or should be included whether it is related or not. One important fact in here that we are forgetting: this is not a free choice item. In a free market condition this situation is absolutly OK because having "choice" on both sides will even out and detrmine the true value of the product. In this case the law requires ALL drivers to have insurance. We know that and insurance companies know that, meaning, if there is no oversight by some authority, the companies can charge any amount regardless how absurd it is. They know that at the end we will have to buy so they can dictate the price and stand by and watch us as we bend down, we have no choice. Forget about what we hear: people have to shop around, competition ... etc in reality it is all nonsense and do not exist. It is like telling somebody he has to fight a bull and he will get all the weapons he needs: swords, spears, chains anything he asks for. Oh great we say. However before he goes into the arena he is blind-folded and his hands are tied behind his back!!!!! Bottom line is there has to be some monitoring.
That's an interesting fact. Around here, the poor people park on the street. The better-off people have attached garages.
But you do have the choice not to own a vehicle. No heap, no insurance. No problem.
At least you live in a province where you can shop for insurance. WE are stuck with government insurance. The prices are set by highly paid bureaucrats. Worse they even dictate the rate that body shops can charge and what kind of toilet paper the shop must have in public washrooms if they wish to do insurance work.
I'm not sure where the point in this was, but as I said earlier, I agree that in a way - risk assessment is a form of discrimination.
But this type of discrimination is what helps insurance companies determine your rate.
For instance, discrimination based on age or sex.
Do car theives prefer stealing rusty 1970 Fairmonts without muffler or bumper, or would they prefer a new Lexus?
PS to thieves out there beyond the Aether
I don't drive either...