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Why are car insurance companies quoting me rates at more than the value of my car?

malman89 said:
I'm still stuck in one of the inflated insurance rate age brackets myself and am a safe driver, but I fully understand why I have to pay a slight premium to be insured. The eventual dip in my premium will be the payoff for years of safe driving.
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Then you are more understanding than most. When i was in that age bracket and was "over charged" only because of that factor it made NO sense to me. They were penalizing me, an individual, because of something some dumb*** did.


Home owners insurance is no better. My home owner insurance was raised the last couple years, yet I have made no claims what-so-ever. When I called to ask about it they told me it was because others in my state had made more claims than "usual" and the state allowed for an "insurance rate hike". Complete BS as far as I am concerned.
 
People who live in big cities are discriminated against because they pay more for theft coverage... how terrible is that? That's just stereotyping criminals as being urban dwellers!!

And isn't it blatant discrimination to think that just because you've caused just one little piddly accident (while drunk) that you'd cause another one! Who do they think they are? Charging more for insurance based on "high risk"? Risk doesn't mean you are going to do something bad in the future!

Seriously... I'm all for "discrimination" in car and home insurance rates. Our fire department passed an important certification process, so our home insurance went down. Doesn't this discriminate against communities without fire department certification. When we lived in town we got a discount because of our proximity to a fire hydrant - a common house insurance clause. Too bad for those who lived further I suppose. I'm getting age discounts on both our home insurance and car insurance.

As for health insurance... I'm totally against ageism when it come to health insurance. That is just out right discrimination. But then again it doesn't really matter since I live in Canada and we have universal health insurance coverage regardless of age or pre-existing conditions.
 
adk said:
Children pay less than adults for an all-you-can-eat dinner at Old Country Buffet. Is this "age discrimination" as well?
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Actually yeah.

I was at Max and Ermas once, ordered something off the kids meal (because frankly that's enough food for me) and ended up with a free meal because they didn't inform me that I would have to pay an adult price for smaller portion meal.

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dukebound85 said:
There are many factors that go into insurance premiums. The fact that our age group is, on average, more apt to cause damages, it is perfectly reasonable to charge appropriately

The good news? That is not the only factor considered and your driving record is taken into account.


What about higher insurance rates for those that drive high performance vehicles? against that too?

What do you propose? Why are you against the use of data to help formulate premiums?
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I'm only against the use when it discriminates. Just because I'm young doesn't mean I'm going to get into an accident. Just because I'm Asian doesn't mean I'm going to score high on my SAT.

It's stereotyping, plain and simple.

And the premiums for those cars are based on the stats for the cars, not the drivers (or should be anyway).


Are you against higher health insurance/life insurance premiums for older people? I mean after all, even though the stats say they use more disproportionately more health resources, it is age discrimination right?
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I'm not familiar with insurance premiums, so I can't comment.

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snberk103 said:
People who live in big cities are discriminated against because they pay more for theft coverage... how terrible is that? That's just stereotyping criminals as being urban dwellers!!

And isn't it blatant discrimination to think that just because you've caused just one little piddly accident (while drunk) that you'd cause another one! Who do they think they are? Charging more for insurance based on "high risk"? Risk doesn't mean you are going to do something bad in the future!

Seriously... I'm all for "discrimination" in car and home insurance rates. Our fire department passed an important certification process, so our home insurance went down. Doesn't this discriminate against communities without fire department certification. When we lived in town we got a discount because of our proximity to a fire hydrant - a common house insurance clause. Too bad for those who lived further I suppose. I'm getting age discounts on both our home insurance and car insurance.
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the difference in all that stuff is that it doesn't matter what your personal attributes are. Young, old, black, asian, doesn't matter.

what matters is the equipment, and where you live
 
eric/ said:
Actually yeah.

I was at Max and Ermas once, ordered something off the kids meal (because frankly that's enough food for me) and ended up with a free meal because they didn't inform me that I would have to pay an adult price for smaller portion meal.
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So, even though a child almost always eats less than adults at an all-you-can-eat buffet, it's "discrimination" to charge a child less than an adult?

Using a restaurant where you order off of a menu as a comparison to car insurance doesn't work, as you can't order a car accident off of a menu, and nobody knows how much a car accident is going to cost before it happens (unlike a cheeseburger).
 
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adk said:
So, even though a child almost always eats less than adults at an all-you-can-eat buffet, it's "discrimination" to charge a child less than an adult?

Using a restaurant where you order off of a menu as a comparison to car insurance doesn't work, as you can't order a car accident off of a menu, and nobody knows how much a car accident is going to cost before it happens (unlike a cheeseburger).
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You made the comparison, not me.
 
eric/ said:
You made the comparison, not me.
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No. I compared car insurance to an all-you-can-eat buffet. You then threw in your anecdote of ordering a children's meal (a fixed quantity of food) off of a menu.

Once you buy an admission to a buffet, you can eat as much food as you'd like (within reason). Once you buy a car insurance policy, you can file as many claims as you encounter (again, within reason).

Since you haven't answered my question yet, I'll ask again. Is it wrong to charge an adult more than a child to enter an all-you-can-eat buffet for dinner? After all, children generally consume less food than adults, no?

I apologize for feeding this guy and significantly drifting the thread.
 
adk said:
No. I compared car insurance to an all-you-can-eat buffet. You then threw in your anecdote of ordering a children's meal (a fixed quantity of food) off of a menu.

Once you buy an admission to a buffet, you can eat as much food as you'd like (within reason). Once you buy a car insurance policy, you can file as many claims as you encounter (again, within reason).

Since you haven't answered my question yet, I'll ask again. Is it wrong to charge an adult more than a child to enter an all-you-can-eat buffet for dinner? After all, children generally consume less food than adults, no?

I apologize for feeding this guy and significantly drifting the thread.
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*sigh*

If that's how you want to frame this. Comparing car insurance age discrimination to a buffet, then yes it's wrong to charge an adult more.
 
eric/ said:
...
I was at Max and Ermas once, ordered something off the kids meal (because frankly that's enough food for me) and ended up with a free meal because they didn't inform me that I would have to pay an adult price for smaller portion meal....
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adk said:
So, even though a child almost always eats less than adults at an all-you-can-eat buffet, it's "discrimination" to charge a child less than an adult?
....
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I think you both miss the point. Children's menu pricing is generally a loss leader to bring the parent into the restaurant. It has very little to do with the portions. The parents' menu choices is where the profit is. The idea is that the parents come into the restaurant because they can feed the monster for cheap, and the money they save on the ankle biter they may spend on an extra appetizer. Also... if the restaurant is licensed to serve alcohol with children present, the profit is there.

Note that most fast food places don't have a children's menu. You are free to order child sized portion regardless of your age.

eric/ said:
... difference in all that stuff is that it doesn't matter what your personal attributes are. Young, old, black, asian, doesn't matter.

what matters is the equipment, and where you live
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A) Do they not teach you humour in Ohio?
B) You ignored my age related examples...

I think you will find a clear correlation if you looked at people for or against age determined insurance rates, and compared that to whether they were benefitting or not from the policy.

And - in case you hadn't noticed... The whole idea of insurance exists on identifying common factors in a large group of people, and the likelihood of events occurring within that group. If you wanted to completely minimize discrimination you would need to work with the entire global community. Your rates would be determined by the probabilities calculated globally.
 
0dev said:
There's your reason. You live in a city and you're 22. Insurance for young drivers, especially in cities, is always going to be insane. It's a shame, I know, I'm young myself and would love to actually be able to insure a car, but there we go.

I've been quoted £2,000 (~$3,000) a year for a car that's worth £100 (~$150) before. Which means the insurance company thinks I'm going to completely wreck the car twenty times every year. Ha.
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It's important to look at the breakdown. How much of that quote is liability? How much is comprehensive? If the added cost of collision exceeds the car's value, why wouldn't you just put aside that amount each month instead assuming it's financially possible? Having full coverage doesn't guarantee you a new car. They could just write that one off and send you a check.
 
eric/ said:
I'm only against the use when it discriminates. Just because I'm young doesn't mean I'm going to get into an accident. Just because I'm Asian doesn't mean I'm going to score high on my SAT.

It's stereotyping, plain and simple.

And the premiums for those cars are based on the stats for the cars, not the drivers (or should be anyway).
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Yes it is stereotyping - and it is an accurate one based on solid data. The fact that you are young doesn't mean you will have an accident, but it means you're more likely to. As does the fact that you are male, as does your job and a whole host of other factors. Yes, the stats of a car are taken into account, but the stats if the driver are (and should be) too.
 
jeremy h said:
Be careful if doing this (fronting) particularly if the car is being driven by, say a student, who is not at the parents home most of the time. My understanding is that if you crash and the insurance company can prove the parent wasn't the main driver (eg the car was kept away from the parents house etc) you're in big trouble legally and financially as you've made a false declaration on the insurance form.

A friends teenage son recently got insurance through one of those back boxes and is very nervous in letting either of his parents borrow his car as he's worried they'll break a speed limit etc. Talk about a role reversal! :D
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There are accommodations insurance companies make for students. I bought a car this month in Illinois, I live with my parents in Michigan during the summers, and I go to school in Kentucky. It took about 5 phone calls all speaking to a different Progressive representative, but it saved me over $100 a month. Insurance companies do make exceptions for students. Not to mention this was the first car I was ever insured under which is even costlier.
 
dukebound85 said:
I pay 500, yes 500, a YEAR for full coverage on my car. Those rates are nuts
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Let's see: I have a 2013 Beetle Convertible (diesel of course), I'm 51, and State Farm charges me $1,796 every six months for full coverage. Absolutely ridiculous!!
 
snberk103 said:
And - in case you hadn't noticed... The whole idea of insurance exists on identifying common factors in a large group of people, and the likelihood of events occurring within that group. If you wanted to completely minimize discrimination you would need to work with the entire global community. Your rates would be determined by the probabilities calculated globally.
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iStudentUK said:
Yes it is stereotyping - and it is an accurate one based on solid data. The fact that you are young doesn't mean you will have an accident, but it means you're more likely to. As does the fact that you are male, as does your job and a whole host of other factors. Yes, the stats of a car are taken into account, but the stats if the driver are (and should be) too.
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Yes and yes. Holy smokes, it’s pretty simple, it’s outlined above, I’m not sure how or why anyone is *clucking* about age not being at least one factor in the cost calculation.

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colourfastt said:
Let's see: I have a 2013 Beetle Convertible (diesel of course), I'm 51, and State Farm charges me $1,796 every six months for full coverage. Absolutely ridiculous!!
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Yikes, yeah, wow, that is pricey. I’ve got exceptional coverage, live in Florida, and even for cars like my Z06, I was paying ~$850/year.

Interestingly, cars like Corvettes, and even higher cost performance cars like Porsche tend to not be that high to ensure, because they tend to be owned by “older” folks, and extra cars that often get a “low mileage” discount.
 
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Are you insuring the car in NJ or NY? As a brand new driver in NJ, I pay Progressive under half what you were quoted on a CTS with most limits maxed along with collission and comp. Plus their price was by far the best, despite how some people here would find $250+/month ridiculous but that's the norm for new drivers in NJ. Everyone else I know my age in NJ pays ~$200+/month for just basic coverage. Maybe your parents live in NJ and you could try insuring it there? NYC itself is probably the riskiest place to insure.

Perhaps it's the car you are trying to insure that's giving you the issues?
 
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