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It doesn't matter if you aren't stuck with someone. You're talking about a market fix to a structural performance problem. Pay attention to that line about an overall 90% retention rate. Also note that they do absolutely nothing to explain why people move, beyond a vague reference to recession problems. You know why most of those 10% move? Because their insurer changed something that affected them negatively. There's a difference between leaving and being driven away.
People tend to stick with what they know, but price shopping goes on all the time and rate hikes encourage it. If someone is paying more then they would if they went with someone else, that is their choice and it shouldn't be illegal to charge someone more or less for the service you are giving them in regards to risk.
Lets boil it down even to a more strident easy to understand statement. IF insurance companies wanted to charge people more because they drive Ford's and the owner of the insurance company hates Ford then so be it. Its a free country (in theory). This is like your neighborhood store raising prices on can of corn. Or the mechanic raising his price for an oil change.
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Yeah, they will. Because they're not pissing it away, they're saving money in the long run.
Nope. Your just absolutely wrong on this. I have never heard, not ONCE at any point someone saying "I'm not gonna file a claim for thousands of dollars because it will raise my rates!" Never. Furthermore why the hell even have insurance if you aren't going to use it? Don't give me this "its required." Because if this theoretically rich person who isn't going to file a claim because it will raise his rate... he would of had to have some other form of insurance then liability only to be in any position to say no to a claim. The *only* claims that his insurance company would be paying is for *other* people's vehicles.
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And in all those situations, your insurer is also going to raise your rates, probably your deductible, and make various other changes because now, actuarially, you're a bigger risk than you were before.
Why would your insurer raise rates on an accident that was not your fault? You are not a bigger risk if someone rear ends you and they didn't have insurance so your insurance paid the damages because you had uninsured motorist coverage.
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If the price of potatoes rises in Des Moines, does the tree falling in a forest make a sound? Your statement has nothing to do with what I said, or what I was replying to.
I am attempting to get you to understand that insurance is a price sensitive product. By disallowing the use of credit scores you are not changing the amount that insurance companies charge the populace as a whole. You simply have some people paying more then they would have before and some people paying less.
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And why would people leave a company that is not raising their rates, but leaving them exactly as they were before? Particularly when no one but the insurance company "knows" they're less of a risk because the methodology is kept secret?
People do occasional listen to all those commercials on TV about saving money on car insurance. You seem to have a reasonably level head normally. I'm astonished you can not grasp the concept that if your being charged too high with one carrier that you can switch. And if the correlation is not as strong as was believed in credit score vs. claims then a carrier would jump on the chance to get the business of those low credit score folks because they would be making a profit on them compared to other companies charging too high of a rate. But that is not happening because Credit Score IS a solid indicator of the likelihood that a person will file a claim. Furthermore there are additional costs for dealing with people who have a problem paying their bills on time.
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It's not Big Brother, it's appropriate government oversight, to have some regulations in industries we are REQUIRED BY LAW to participate in....auto and homeowner's. How many have no mortgage and own their home outright? And even if they own outright they'll want property and casualty coverage. Accidents DO happen.
You are not required by law to own a home. You are not required by law to have a mortgage. And of course someone will want to insure their home, its an asset that should be protected and typically it doesn't cost too much for that protection. Furthermore some states don't require auto insurance. I did a quick look at California for example has several other options as well. I imagine most states will though I could be wrong.
http://www.dmv.ca.gov/pubs/brochures...cts/ffvr18.htm
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* A motor vehicle liability insurance policy
* A cash deposit of $35,000 with DMV
* A DMV issued self-insurance certificate
* A surety bond for $35,000 from a company licensed to do business in California.
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You know damn well the industry won't let all companies sell in all states, so it's not the freeee market you want to believe.
Are you sure you aren't getting this confused with Health Insurance?
http://archives.chicagotribune.com/2...insuranceaug23
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The easiest way to see how insurance competition benefits consumers is to look at auto insurance. That’s a huge, nationwide market and companies compete intensively for a share of it. Some stress their low prices, others customer service, whatever gives them an edge in the marketplace. Geico and Progressive have been especially aggressive in touting cost savings. State Farm and Allstate certainly compete on price, but they stress service after an accident. That’s why Allstate says “you’re in good hands,” and State Farm says it will be there “like a good neighbor.” Other companies, like SafeAuto, focus on drivers who want only minimum coverage to meet state license requirements. In short, auto insurance companies compete vigorously to provide what different consumers want, and they tell them so in national advertisements.