Top 5 insurance news and the story they tell

Friday, August 3, 2012

This week the auto insurance market saw some exciting and unusual news. I wanted to approach writing this article in a way that connected the dots and patterns between the top 5 news stories to see if I could  find any insights. Here’s what I found:

News Stories

  1. InsuranceCalculator.net Launches Car Insurance Calculator

  2. Credit Scores and Car Insurance: If You Don’t Succeed, Try Again

  3. There are no Car-Insurance Loopholes or Do-Overs

  4. Commentary: For Detroiters, auto insurance costs still far too high

  5. Mo. man convicted of killing his car insurance agent after losing money at casino

 Insights

Does it work?

This week InsuranceCalculator.net came out with a tool that calculates auto insurance premiums for individuals. PR web reported, “The new car insurance calculator will help consumers see and compare different rates in different states based on their financial status and input.” The car insurance calculator includes the following fields:

  • Make of Vehicle (e.g. BMW)
  • Vehicle Model (e.g. X5)
  • Vehicle Year (e.g. 2012)
  • Driving Experience
  • Types of Coverage
  • Type of Payment
  • ZIP Code

The calculator, from the fields listed above, is able to run an algorithm that calculates an estimated premium. Interestingly enough the calculator does not take into account, credit scores.

Fox Business ran an article discussing the influence of an individual’s credit score on their insurance premium price. Clearly the logic indicates that the worse a person’s credit score is, the higher the price for insurance. That’s leads me to wonder if the car insurance calculator is truly accurate with its results? It appears that Fox Business would argue, no.

Do overs and Loop Holes

In other news, Fox Business reported on the issues of loopholes and “do overs”. The article described a woman who’s 16-year-old son crashed her car. Unfortunately her policy clearly stated it would not cover any drivers under age 21. The article explained that in the world of insurance there aren’t many loopholes and “do overs”. Once you sign your policy it’s pretty much concrete. Which is unfortunate for those in Detroit who statistically pay the highest car insurance rates in the state of Michigan.
The writer, Shanelle Jackson, discussed the importance for new legislation to be passed to reduce the burden of auto insurance policies on Detroit citizens. Apparently the citizens aren’t able to find any loop holes or “do overs” that allow them to feel any financial relief. The state has a “one-size-fits-all” system that gives unlimited coverage for auto-related personal injuries to all insured motorists. In essence people pay the highest premium for that coverage. Like the mother who’s son wrecked her car, Shanelle spoke out saying, “America is great because we acknowledge the freedom citizens have to makes choices and chose among competing options. Why has that freedom not been extended to our auto insurance?” I agree, America is great because of its freedom, however state laws sometimes forget that notion. Which is probably why a man in Missouri killed his insurance agent.

Just plain stupid

The article spoke of a man from Missouri who killed his insurance agent after a casino gambling spree. The man was upset with his bad luck – and apparently his auto insurance premium – he decided to take matters into his own hands. He found one loop hole in his coverage, “if you kill your insurance agent, you’re going to jail where you’ll need a different type of insurance and it won’t be cheap car insurance“. Fortunately this man won’t receive any “do overs” for his actions.

There you have it, three insights concerning this weeks top news. Feel free to comment below if you see any other patterns or insights relating to the articles.

 

email

« Return to Blog