ECJ Ruling on Gender Equality: Car Insurance

[Khendraja'aro]

What about the women who will now be forced to pay a higher premium because they are lumped in with men who pose a higher risk? I'm sure they don't want to pay more. And you talk of discrimination.

Anti-Discrimination is a two-way-street. No one wants to pay more. Let's make the problem with those methods a bit more jarring:

You know how Lewk goes on about deterrence and how punishment by law is supposed to prevent crime through said deterrence and that the amount of deterrence correlates directly with the amount of punishment?

If we follow that reasoning and also apply the logic the insurer use, we should also punish men more harshly since they are the ones responsible for the majority of crimes out there.

THAT is the kind of reasoning behind those risk-"mitigation" tactics. It does not "mitigate" anything because it places the burden of the insurance on those who already are suffering from problems.

Just imagine, pre-natal diagnostics determine that your child will have heart problems at the age of 7. Your premiums just shot through the roof. Isn't that risk-"mitigation" a great thing? Now you have a sick child and have to struggle to pay the costs? Ain't that grand? Good thing that the risk was mitigated. For the insurer, that is.

[RandBlade]

Ah. So, why don't car insurers do it the proper way then? Everyone pays the same premium (or a premium dependant on car choice) and when you cause an accident, your premium goes up. Furthermore, your premium decreases with time when you cause no accidents.

Thus you hit the guys which cause accidents and don't hit the guys who don't cause accidents, instead of painting everyone with a broad brush just because he's been born male. I actually don't quite see the need to discriminate here.

Why close the stable door AFTER the horse has bolted?

Pre-existing conditions, as well as genetic history, do affect insurance premiums. No need to imagine it.

[Khendraja'aro]

Why close the stable door AFTER the horse has bolted?

Are you a scryer now? Do you have the ability to determine how I will drive my car tomorrow? Great!

Now, could you tell me which stocks to buy while you're at it?

[RandBlade]

No but I can tell you on average that new male drivers with no history will cause far more in costs than new female ones. Some will never survive the first accident they caused so under your system who pays then?

[Dreadnaught]

Well, the point of insurance, as I understand it, is to take an area where you may or not run afoul of something, say, illness and spread the risk over all participants. Thus diminishing the risk.

However, higher insurance premiums for the "high risk" part of your total clientele is a double punishment - let's take breast cancer as an example. First you have to deal with the issues involving cancer and then you also are punished for it by having to pay more. When in reality, you can't actually do anything about it.

And yes, I do see such things as unfair. Because you're rewarded or punished for something you can't influence. I'm eagerly awaiting mandatory gene examinations by health insurers just so they can make it even more unfair.

You haven't really addressed Fuzzy's very good point here:

Because there is a basis for it. The discrimination is not invidious, race and gender are incidental to what the insurers and actuaries are really concerned about, risk.

Insurance isn't manna from the heavens. It's a business that makes bets. If it can't be on the winning side of those bets most of the time, there will be no money to pay for treatment for those who do in fact end up suffering from a condition/accident that's being insured against.

This is sort of the big-picture point of insurance, it's hard to get around the math of it.

[GGT]

Zip codes are used because different areas have higher rates of theft, vandalism and accidents. Seriously why would an insurance company go to lengths to discriminate on race? Thats beyond paranoia.

And you're an insurance lacky if you don't realize that certain zip codes (with those higher rates of theft and vandalism) can be directly related to income/education/race demographics.

You poor 'Mericans have yet to invent the no-claims bonus?

For each year that I have insurance on a car and don't make a claim, I get a discount on my premium. The more years of no-claims, the greater the discount.

So good is the discount if you have built up many years of no-claims, that you can even pay a tiny bit extra on your premium to protect your no-claims bonus should you need to make a claim. No-claims protection. Saves you from losing what could be decades worth of built-up discount.

We had tort reform, but it varies by state and insurance carrier. Taken to its logical conclusion, people like me would end up paying no premium at all, yet still have full coverage?

Like I said, I'd hate to do the math, but I've probably paid more for the privilege to drive than it's actually worth.

[Khendraja'aro]

Insurance isn't manna from the heavens. It's a business that makes bets. If it can't be on the winning side of those bets most of the time, there will be no money to pay for treatment for those who do in fact end up suffering from a condition/accident that's being insured against.

This is sort of the big-picture point of insurance, it's hard to get around the math of it.

And they're unable to do those bets without discrimination. Right. Check your logic, pal.

No but I can tell you on average that new male drivers with no history will cause far more in costs than new female ones. Some will never survive the first accident they caused so under your system who pays then?

Right. So, male driver of 19 years pay $200 premium and does not survive. Male driver of 19 years pays $150 premium and does not survive. Both cases, the insurance company won't collect any more premiums and since he's only been insured for a year, they only collected $2400/$1800. The accident cost $12,000.

So, under both systems, the other subscribers have to pick up the difference. I'm not quite sure where you were going with this - but I'm quite sure that you haven't quite thought it through completely.

So, in answer to your question: The other subscribers will pay. Just as they do now.

[LittleFuzzy]

And they're unable to do those bets without discrimination. Right. Check your logic, pal.

Sure they can, but they can't do so as accurately. Not engaging in discrimination costs them money. And forgive me, but everything they do is discrimination. The point isn't that this is discrimination, but that you think this should be a protected category. I'm not aware of anything, in my country, your country, or your "ever-increasing union" of countries, that flat-out bans discrimination against any group no matter what the cause or reason, just requirements of a fairly high standard of proof and the like. IIRC however, all our countries are against actors seeking thin proxies for protected categories and using those instead, since it's just a dodge

[RandBlade]

Right. So, male driver of 19 years pay $200 premium and does not survive. Male driver of 19 years pays $150 premium and does not survive. Both cases, the insurance company won't collect any more premiums and since he's only been insured for a year, they only collected $2400/$1800. The accident cost $12,000.

Alternatively you have a group of men and a group of women:

Insurance Excess of £400 irrespective of gender if there's an accident and they survive to pay it.
Minor accidents cost on average £2500 but get the insurance excess
Major accidents (fatalities) cost on average £4000 and have no insurance excess.

10 men, each paying annual premiums of £1430 pa. There are 3 minor and 2 major accidents - so £1200 of excess, total revenue of £15,500. Total cost: £15,500
10 women, each paying annual premiums of £610. There is just 1 minor and 1 major accident - so £400 of excess, total revenue of £6,500. Total cost: £6,500.

Obviously very simplified as it has no profit margin and numbers were worked deliberately to match and made up just now by me but you get the point.

Men are paying just what they should pay due to the risk they represent.
Women are paying just what they should pay due to the risk they represent.

Since women are demonstrably lower-risk is it not a form of discrimination to make them pay for someone else's risk? Why should they be forced to pay more than their real risk is, why should men pay less than they owe?

[Dreadnaught]

And they're unable to do those bets without discrimination. Right. Check your logic, pal.

Yes, that's the point of insurance. As Fuzzy has pointed out, it's not hostile. But insurance is fundamentally about gaining as much information as possible to determine the likelihood of an outcome. Short divine powers of forecasting, it requires using various proxies to develop statistical correlations.

Sure, you could have everyone pay a lot more for insurance. But that's not the point of risk-pooling. Or at least it's risk-pooling that's inefficient to the point of being pointless.

[LittleFuzzy]

A case can, however, easily be made that since such and such is a category with certain higher protections, and insurance can still function effectively without reference to it *just not quite as well* then the industry really should be keeping its nose away from those specific categories.

[Loki]

Yes, that's the point of insurance. As Fuzzy has pointed out, it's not hostile. But insurance is fundamentally about gaining as much information as possible to determine the likelihood of an outcome. Short divine powers of forecasting, it requires using various proxies to develop statistical correlations.

Sure, you could have everyone pay a lot more for insurance. But that's not the point of risk-pooling. Or at least it's risk-pooling that's inefficient to the point of being pointless.

Out of curiosity, why not use race then? Or perhaps parents' education level?

[Lewkowski]

And you're an insurance lacky if you don't realize that certain zip codes (with those higher rates of theft and vandalism) can be directly related to income/education/race demographics.

So because it happens to have some sort of correlation to race/education/demographics it shouldn't be used? That is absurd. The point isn't to discriminate against race/education/income it is to discriminate against people who are more likely to file a claim. Thats it. We know that credit scores are strongly correlated to this. As are zip codes. There are no cabals of evil insurance companies trying to stick it to a particular race just because they can.

[Dreadnaught]

A case can, however, easily be made that since such and such is a category with certain higher protections, and insurance can still function effectively without reference to it *just not quite as well* then the industry really should be keeping its nose away from those specific categories.

Out of curiosity, why not use race then? Or perhaps parents' education level?

I guess the data point we're missing is how much better does it do when it takes into account those categories.

Objectively, I have no problem taking into account education levels. In theory race would also change the formulas (just about any proxy has a good chance of changing the calculations). But when it comes to race, society has made a choice to not start making statistical assumptions based on race so it's worth keeping it out of here.

I should also point out that there is innovation in this industry when it comes to equipping people's cars with accelerometers and data recorders, which collect data that can become an even more individualized proxy for driver safety. And I bring that up to point out that the end-goal of these calculations is cheaper insurance for likely-safter drivers.

What I don't get is why cheaper insurance for likely-safer drivers seems to be what Khend is against.

[GGT]

So because it happens to have some sort of correlation to race/education/demographics it shouldn't be used? That is absurd. The point isn't to discriminate against race/education/income it is to discriminate against people who are more likely to file a claim. Thats it. We know that credit scores are strongly correlated to this. As are zip codes. There are no cabals of evil insurance companies trying to stick it to a particular race just because they can.

As Fuzzy said --- thin proxies used as a dodge for racism is a no-no. We're not using the word 'discrimination' the same way; of course the whole scheme is based on grouping individuals and making a discriminating decision about their risk for an accident. It should not be based on who's more likely to file a claim, or their credit score. Credit rating agencies don't have the greatest reputation for being accurate on who's paying their debt obligations, or using metrics that even matter. (We've had discussion on that before.) But if the insurer really thinks someone is going to wreck or total their car just to get a new one, or a check for damages, they can require a high deductible without yanking up their premium.

It's still a goofy business model, when filling a claim dings your future "risk" status. The whole point of buying insurance is the ability to file a claim after an accident, and reduce OOP costs. Being dinged for using the very service it's intended for is....wacky.

[Loki]

I guess the data point we're missing is how much better does it do when it takes into account those categories.

Objectively, I have no problem taking into account education levels. In theory race would also change the formulas (just about any proxy has a good chance of changing the calculations). But when it comes to race, society has made a choice to not start making statistical assumptions based on race so it's worth keeping it out of here.

I should also point out that there is innovation in this industry when it comes to equipping people's cars with accelerometers and data recorders, which collect data that can become an even more individualized proxy for driver safety. And I bring that up to point out that the end-goal of these calculations is cheaper insurance for likely-safter drivers.

What I don't get is why cheaper insurance for likely-safer drivers seems to be what Khend is against.

Would you be ok with using race for life insurance? After all, black men live something like 10 years less than white men. And you're ok with using the education levels of a person's parents? I.E. You'd support the creation of a permanent underclass?

[Nessus]

It's hard to vote in the US without supporting that these days

[Lewkowski]

As Fuzzy said --- thin proxies used as a dodge for racism is a no-no. We're not using the word 'discrimination' the same way; of course the whole scheme is based on grouping individuals and making a discriminating decision about their risk for an accident. It should not be based on who's more likely to file a claim, or their credit score. Credit rating agencies don't have the greatest reputation for being accurate on who's paying their debt obligations, or using metrics that even matter. (We've had discussion on that before.) But if the insurer really thinks someone is going to wreck or total their car just to get a new one, or a check for damages, they can require a high deductible without yanking up their premium.

It's still a goofy business model, when filling a claim dings your future "risk" status. The whole point of buying insurance is the ability to file a claim after an accident, and reduce OOP costs. Being dinged for using the very service it's intended for is....wacky.

And yet there is a correlation between credit profile and accidents... And by the way insurance doesn't just cover accidents. Theft is a big issue and an important factor when looking at zip codes. If you live in an area with a higher crime rate doesn't that mean the insurance company is taking a higher risk that your car is being stolen? Sure some people have liability only coverage but that is a different ball game.

[LittleFuzzy]

and making a discriminating decision about their risk for an accident. It should not be based on who's more likely to file a claim, or their credit score.

When I said risk, I wasn't talking about accidents, I was talking about filing a claim. I don't particularly like the behavior of insurance companies there, but there's nothing the least bit illegal or wrongfully discriminatory there, nor do I think there's anything wrongfully discriminatory about charging people in particular demographic groups more, even if they're only more at risk of filing a claim rather than of getting into an accident.

[Lebanese Dragon]

Well my view it being supported so no need to be overly redundant, but I would like to comment on how it is hard to seperate our emotional feelings with issues of gender, and or ethnicity when trying to analyze something objectively. I am a male, and I feel that it is only logical that men should pay for higher insurance. That it would be discriminating against females to do anything other than that. It's a sad reality but men based on their genes, or based on how they are raised in society to think they're bad @ss can do anything, unstoppable, whatever it is that makes them more inclined to get themselves into wrecks, but they are more likely to do it, as such the risk cost directed toward them should be increased. We ALL have to remember it's not BECAUSE they are MEN that the cost is higher, it's because there are verifiable other qualities correlated with them being male.

[Dreadnaught]

Would you be ok with using race for life insurance? After all, black men live something like 10 years less than white men. And you're ok with using the education levels of a person's parents? I.E. You'd support the creation of a permanent underclass?

I don't think insurance calculations based on parental education would yield any significant correlation. In theory, the math behind such assumptions doesn't lie. And it's also an assumption that historically disadvantaged groups wouldn't come out on top in these calculations (who said educated people drive better?).

But obviously society draws lines around certain areas. As a society we just have to decide if we're okay with paying more across-the-board in those cases.

[Draco]

Here's a simple solution to this entire debate: scrap the anti-discrimination laws and voila, everyone goes their own way. Oh wait, we're talking about Europe here, so we're more likely to make contact with an alien civilisation than anything else.

[Hazir]

Wow, another idiot who thinks he knows Europe.