Poor pay more because they make bad decisions...

[Lewkowski]

http://www.foxbusiness.com/personal-...watchdog-says/

A Consumer Federation of America report released Monday accuses auto insurance companies of unfairly penalizing low-income drivers.
By law, insurers aren't allowed to ask about income. The CFA report says insurers are using a number of other factors -- such as ZIP code and education -- as proxies for income, and charging poor drivers much more as a result.
The report drew a sharp response from the auto insurance industry.
“As anyone who watches television commercials knows, auto insurance coverage is widely available in every U.S. state,” says Robert Hartwig, Insurance Information Institute president. “Drivers should shop around if they feel as though their current auto insurer is not meeting their needs, or charging too high a price.”
In fact, the CFA analysis comes right on the heels of a report from the National Association of Insurance Commissioners trumpeting another year of decline in overall auto insurance expenditures. (See “The cheapest states for car insurance rates.”)
So is insurance getting cheaper, or more expensive?
The company you keep
Our gilded age of computing offers companies the ability to slice and dice data to predict behaviors.
Amazon.com uses it to show you music you might like, and car insurers use it to set your rates. If drivers like you -- sharing your occupation, ZIP code, credit history or dozens of other rating factors -- file more claims, you will pay more for car insurance.
So, assuming you live in the right ZIP code and fall into the right buckets, you're probably paying less than someone who doesn't. (We strongly suggest everyone shop around, of course.)
The wide-ranging CFA report cites as an example a single man with a spotless record, age 30, driving a Ford Taurus 20 miles each way to work. With an MBA degree and an address in an affluent St. Louis suburb, his rate was $558 a year. The CFA then changed his rating profile to find the effect of:
Less education, a $71 increase
Unemployment, an $84 increase
Moving to an urban ZIP code, a $347 increase (See “How your ZIP code drives up your car insurance.”)
A gap in coverage, a $638 increase
Installment payments, $60 (See “Payment plans can increase the cost of your insurance.”)
None of those factors means the Taurus owner is a worse driver.
Where the money is
Every insurance company sets its own rates, deciding how much each factor raises the risk of a claim being filed. But by law, each insurer must apply that rating formula to every driver equally within that state. For example, insurers can't levy a surcharge for speeding tickets on drivers in some ZIP codes but not in others.
The nonprofit CFA says insurance companies get around the rules by charging more for rating factors and coverages likely to be shared by low-income drivers. Their analysis found some insurers charged more for bare-minimum policies than for those with more coverage. In some cases, insurers grossly overpriced coverage for drivers carrying minimum levels of coverage by many thousands of dollars, CFA says. In states where credit is a legally allowed rating factor, drivers with poor credit histories pay as much as 25% more, the CFA says.
Insurers argue that factors such as occupation and credit clearly are correlated to the risk of a claim. The CFA says that kind of thinking leaves good drivers unfairly paying rates they don't deserve and can't afford.
“It is difficult to avoid the conclusion,” the CFA report says, “that major insurers are far more interested in selling auto insurance to higher-income families.”
Is pay-per-mile the answer?
The CFA suggests several possible remedies:
-Lowered mandatory liability limits in some states
-More state-run insurance programs for drivers below an income threshold
-More aggressive examination of rating factors by state regulators, who must approve each company's formula for calculating rates
-Development of pay-per-mile programs
Every state except New Hampshire requires some minimum level of liability coverage, but those levels change from state to state. Even that limited coverage can be very expensive. Our own CarInsurance.com survey of bare-minimum rates found annual premiums ranging from $342 in Wisconsin to $1,422 in Washington, D.C. (See “The cheapest insurance possible.”) About 14% of drivers go without any coverage at all, according to the Insurance Research Council.
The CFA points out that technology developed to provide usage-based insurance -- that is, insurance rates based on the driver's recorded mileage and driving habits, pioneered by companies such as Progressive and State Farm -- could serve equally well in implementing pay-per-mile systems. Low-income families drive only about half as many miles as those in the highest brackets, the CFA notes.
The original article can be found at CarInsurance.com:
Car insurers overcharge poor, watchdog says

Read more: http://www.foxbusiness.com/personal-...#ixzz1lFfT0Z6w


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What a load of garbage. Of course the poor are going to pay more for auto insurance. They are larger risks. The whole location issues is retarded as well. Certain zip codes have more theft and more accidents this seems incredibly obvious.

Next thing people will be complaining that the poor pay higher rates on loans....

[Ominous Gamer]

hey look, its another uneducated rant by lewk about the poor and/or insurance, and its found its way into D&D yet again.

[Lewkowski]

hey look, its another uneducated rant by lewk about the poor and/or insurance, and its found its way into D&D yet again.

Uneducated? If you don't want to be proven wrong again in an insurance discussion you could just not post. Its quite simple.

[Nessus]

hey look, its another uneducated rant by lewk about the poor and/or insurance, and its found its way into D&D yet again.

At least let the eat the poor crowd chime in with their agreement first, they sometimes come up with fun stuff!

[Ominous Gamer]

Lewk, I've don't think we've had a thread yet were you have managed to back up your poor people are horrible claims with a single shred of evidence.

[Aimless]

Wait, are poor people much higher risks wrt auto insurance? Can I get an answer from someone who isn't an insurance salesman?

[Lewkowski]

Lewk, I've don't think we've had a thread yet were you have managed to back up your poor people are horrible claims with a single shred of evidence.

Only since you don't actually accept any evidence I've provided. Poor are more likely to steal, poor are more likely to do crime in general. Poor neighborhoods tend to be more violent. Schools in poor districts tend have terrible results (even when money gets poured in via federal dollars). Poor folks tend to smoke, drink and play the lottery more often.

But of course empirical evidence will never sway you. Just like empirical evidence that there is a correlation between credit score and risk is constantly dismissed by you and other liberals on this board.

[Nessus]

Wait, are poor people much higher risks wrt auto insurance? Can I get an answer from someone who isn't an insurance salesman?

Ostensibly the non-functioning substance abuse addicts are concentrated among the poor, but I wouldn't place great confidence in their ability to acquire a functioning automobile in the first place. Other than that, hmm. The stereotypical red-neck seems like someone who'd be both risk-prone and poor, but we'd need actual statistics to make any usable analysis.

[Aimless]

Only since you don't actually accept any evidence I've provided. Poor are more likely to steal, poor are more likely to do crime in general. Poor neighborhoods tend to be more violent. Schools in poor districts tend have terrible results (even when money gets poured in via federal dollars). Poor folks tend to smoke, drink and play the lottery more often.

But of course empirical evidence will never sway you. Just like empirical evidence that there is a correlation between credit score and risk is constantly dismissed by you and other liberals on this board.

Lewk, aren't you a pretty sedentary, religious conservative man? Do you know any statistics about correlations between various bad things and sedentary lifestyles, religious affiliation, or conservative beliefs?

[Aimless]

Ostensibly the non-functioning substance abuse addicts are concentrated among the poor, but I wouldn't place great confidence in their ability to acquire a functioning automobile in the first place. Other than that, hmm. The stereotypical red-neck seems like someone who'd be both risk-prone and poor, but we'd need actual statistics to make any usable analysis.

What'd be even more interesting is to know whether or not this situation is actually good for anyone.

[Aimless]

Btw would you support regular police raids on the houses of people earning below a certain level? Or, you know, just monthly screening arrests of black/latino men under 30?

[Lewkowski]

Btw would you support regular police raids on the houses of people earning below a certain level? Or, you know, just monthly screening arrests of black/latino men under 30?

Not so much. Keep in mind I'm for a vigorous police force that goes after murderers, rapists, thieves and other violent crimes. I'm not for laws against drug use, gambling, prostitution and the like. Most police raids are involved with the War on Drugs and so to answer your question, no.

[Aimless]

But why not? Drug users are statistically much more likely to engage in crime.



Also, would you be in favour of insurance premium markups based on religious affiliation, number of hours spent sitting, and conservative voting?

[LittleFuzzy]

Wait, are poor people much higher risks wrt auto insurance? Can I get an answer from someone who isn't an insurance salesman?

They are apparently more likely to file a claim. I've suggested a rationale *logic only, no empirical evidence* for that before which Lewk constantly disputes with nothing more than what I've got. I think it's because if anything happens they HAVE to file a claim, no possibility of trying to handle even minor issues without involving insurance. Lewk thinks the idea that someone might try to pay for something themselves rather than involve the insurance company is insane, despite the fact that he and I both know what the future rate hike will be like once a claim actually gets filed.

[Nessus]

What'd be even more interesting is to know whether or not this situation is actually good for anyone.

That's a consideration outside the scope of FYGM.

Also, I like Fuzzy's idea, which is probably a demerit

[Lewkowski]

But why not? Drug users are statistically much more likely to engage in crime.



Also, would you be in favour of insurance premium markups based on religious affiliation, number of hours spent sitting, and conservative voting?

Since drug use a crime that's rather circular logic....

As for your second question, if a correlation can be found between those activities I'm not seeing a problem. Of course trying to get that kind of data would be be kinda difficult and I'm not convinced those attributes would be a stronger correlation then zip code, driving history and vehicle type.

[Lewkowski]

They are apparently more likely to file a claim. I've suggested a rationale *logic only, no empirical evidence* for that before which Lewk constantly disputes with nothing more than what I've got. I think it's because if anything happens they HAVE to file a claim, no possibility of trying to handle even minor issues without involving insurance. Lewk thinks the idea that someone might try to pay for something themselves rather than involve the insurance company is insane, despite the fact that he and I both know what the future rate hike will be like once a claim actually gets filed.

Fuzzy do you think in general poor people are more likely to make some bad decisions? Do you think in general poor people are going to be more likely to have payment issues?

Once again I have to wonder just why people can see the obvious connection between smart choices and benefits but refuse to admit the possibility that poor people are where they are based on their bad choices.

[Nessus]

To echo Minx's earlier question, is the #1 reason for personal bankruptcy in the US still medical bills?

[Lewkowski]

To echo Minx's earlier question, is the #1 reason for personal bankruptcy in the US still medical bills?

Personal bankruptcy isn't the best measure of poverty FYI.

That being said I like how you ignore the possibility that bad choices could of led to that medical bankruptcy filing.

Could unhealthy habits like overeating and smoking led to the medical condition?

Could poor performance at work have led to being fired and losing medical benefits?

Could poor decisions leading to being under educated have led to jobs that didn't provide medical benefits?

And of course some folks get hit with diseases to no fault of their own but why do you immediately assume the majority of the cases involved no bad decision making?

[Nessus]

Personal bankruptcy isn't the best measure of poverty FYI.

I agree.

That being said I like how you ignore the possibility that bad choices could of led to that medical bankruptcy filing.

I did no such thing, but I will excuse this error on your part as you've attested to hearing voices in your head on a regular basis, conversations fantastique are something to be excepted, non?

And of course some folks get hit with diseases to no fault of their own but why do you immediately assume the majority of the cases involved no bad decision making?

Do you then assume the opposite?

[Ominous Gamer]

Thanks Lewk, cause of your supreme intelligence today I learned that my dad's colon cancer was a result of overeating and smoking, and him losing medical benefits was because of his poor work performance.
Here I was thinking that they haven't yet been able to classify the cause of colon cancer, and that the mergers that shut down local distribution cost him his job.

See, this is when I chime in with the usual: you're a dumbass. Cause your "gut feelings" create these factitious scenarios that you have no evidence for, and when that is pointed out, you either disappear, ignore the thread, or claim its a special case.

[Lewkowski]

Thanks Lewk, cause of your supreme intelligence today I learned that my dad's colon cancer was a result of overeating and smoking, and him losing medical benefits was because of his poor work performance.
Here I was thinking that they haven't yet been able to classify the cause of colon cancer, and that the mergers that shut down local distribution cost him his job.

See, this is when I chime in with the usual: you're a dumbass. Cause your "gut feelings" create these factitious scenarios that you have no evidence for, and when that is pointed out, you either disappear, ignore the thread, or claim its a special case.

So I'm curious at what percentage of medical bankruptcy fillings you think are due to poor choices a person has made. I'm not asking for research, just give me your gut guess based on your knowledge of the world.

[Aimless]

Just a quick break from studying to point out that not only are medical bills the most common cause of personal bankruptcy in the US, most of those who go bankrupt are regular middle class folks with medical insurance. In other words it doesn't tell us as much very much about the uninsured or the uninsurable.

I don't have access to the full paper atm, but this study would be of interest:

http://www.ncbi.nlm.nih.gov/pubmed/19501347

Some of the findings are summarised here:

http://allie8020.hubpages.com/hub/un...ruptcy-filings

The new study by David U. Himmelstein, Deborah Thorne, Elizabeth Warren and Steffie Woolhandler used a novel method to analyze medical bankruptcy. They obtained 118,308 bankruptcy petitions filed in the United States between January 25, 2007 and April 11, 2007. A random national sample of 2,314 bankruptcy filers were surveyed and interviewed; their court records were also abstracted.

The study revealed these findings:

The highest out-of-pocket health care costs were associated with non-stroke neurological illnesses, such as multiple sclerosis (mean $34,167). Other diagnosis with high out-of-pocket health care costs were diabetes ($26,971), injuries ($25,096 ), stroke ($23,380), mental illnesses ($23,178) and heart disease ($21,955).

For 48% of medical debtors, hospital bills were the largest single out-of-pocket expense. Prescription drugs for 18.6%, doctors’ bills for 15.1% and insurance premiums for 4.1% of other debtors were the largest expense. Nursing homes and medical equipment where the largest expense for the remainder of medical debtors.

Loss of income associated with the illness also contributed to financial problems related to medical bills. In 37.9% of medical debtors, the illness resulted in the patient's family member losing or quitting a job; in 24.4% of debtors, the illness led to getting fired.

Unpaid medical bills due to unaffordable health care costs contributed directly to the bankruptcy of 92% of medical debtors.

Of course this came as a surprise to me because I assumed most people get fired due to excellent performance by investment bankers.

[Aimless]

Btw, having a sedentary lifestyle is strongly associated with worse health.

[Lebanese Dragon]

Btw, having a sedentary lifestyle is strongly associated with worse health.

Might we even say it causes worse health, compared to the health that same person would have had, if they were active.

[Lewkowski]

Btw, having a sedentary lifestyle is strongly associated with worse health.

Of course. So if someone is obese and has heart disease who's fault is it?

[Aimless]

A sedentary lifestyle--eg. featuring lots of car-riding and working in an office--is a risk factor even in the non-obese.


But if you really disapprove of obesity and heart disease you should probably advocate for a less stressful life with a lot more leisure time and money not to mention more walkways

[Enoch the Red]

A sedentary lifestyle--eg. featuring lots of car-riding and working in an office--is a risk factor even in the non-obese.


But if you really disapprove of obesity and heart disease you should probably advocate for a less stressful life with a lot more leisure time and money not to mention more walkways

The underlying implication throughout this logical chain is that Lewk is guilty of casting stones at poor people, when there is simultaneously a chance he's also engaging in behaviors that aren't necessarily conducive to healthy living.

I think while that might be a fair criticism of Lewk, (it's hard to say without knowing the ins and outs of Lewk's personal life) it's certainly falling short of addressing Lewk's point, which is that people should bear the brunt of responsibility for their own actions. I don't think Lewk would be opposed to paying a higher rate for health/life insurance if it was determined that his lifestyle could be described as at or high risk. It certainly doesn't sound like he's trying to hold himself to a different standard to that which he would have the world hold others.

[LittleFuzzy]

Fuzzy do you think in general poor people are more likely to make some bad decisions? Do you think in general poor people are going to be more likely to have payment issues?

Once again I have to wonder just why people can see the obvious connection between smart choices and benefits but refuse to admit the possibility that poor people are where they are based on their bad choices.

I think they're more likely to be in a situation which forces worse choices on them. I don't think they have inherently poorer decision-making ability. I also think they suffer proportionally worse from making a poor choice because they have less to draw on to counter negative consequences. And yes, sure, they're more likely to have payment issues. They've got less money, saying they have less ability to pay is a tautology. It also applies to insurance rates in general and not just lump sum payments.

[Illusions]

I think while that might be a fair criticism of Lewk, (it's hard to say without knowing the ins and outs of Lewk's personal life) it's certainly falling short of addressing Lewk's point, which is that people should bear the brunt of responsibility for their own actions.

Another of his points though is that poor people are poor because they make more bad decisions than people who are not as poor as them. This seems untrue, and as Fuzzy points out, that its more likely due to the fact that if a person makes a poor decision, those without money are less likely to be able to absorb the consequences. A rich person and a poor person can both, through poor decision making, total their car, but its most likely going to be the poor person who is going to experience the most amount of hardship, in regards to things like paying medical bills, paying for insurance and insurance bill increases, paying to get a new car, finding a mode of transportation to work, paying for fines, etc. This can equally apply to drinking, smoking, eating fast food, gambling, taking out loans, etc.