The Straight Dope

Go Back   Straight Dope Message Board > Main > Great Debates

Reply
 
Thread Tools Display Modes
  #1  
Old 08-28-2002, 12:53 AM
Teelo Teelo is offline
Guest
 
Join Date: Aug 2002
My insurance will be high!! Argh!

Alright, living in Alberta, Canada, I will have a big whoping ass insurance bill. Why you ask? Well many of you probably know!
Because I am a teen, and male, the insurance companies all think that I am a huge accident waiting to happen. I can't blame them either, lots of us teen males do stupid things while driving.
The insurance a year would be an astounding, 4000$/ year.
Thats right, no extra "0" in there.
Taking Drivers Ed classes has given me a 3 year head start. This means that, if I started off without drivers training and went 3 years without any accidents, I would have less to pay because I am less of a threat, so me paying a higher price would be unneccessary.
The classes I took lower it to about 2400$, better, not fantastic though.

My debate is, whether the insurance should start off low, and then if an accident insues, the insurance goes up. Which gives everyone one chance not to mess up,
Or,
Keep it high and slowly lessen the price as time goes on having no accidents. And slowly prooving you are a good driver.


I have thought that the government wants less kids to be on the road (being a danger and all), so having high prices will make it impossible for them to drive.
Its likely right? I believe that giving us a chance is the right way to go, what do you think?
Reply With Quote
Advertisements  
  #2  
Old 08-28-2002, 01:40 AM
WV_Woman WV_Woman is offline
BANNED
 
Join Date: Jun 2002
Posts: 825
Keep it high and slowly lessen the price as time goes on having no accidents. And slowly prooving you are a good driver.

I can't speak for anyone else's insurance company but that's kind of what mine does.

When WV_Man married me, our auto insurance (liability only, as we refuse to go into debt for a car) automatically went down. Apparently Nationwide thinks that if you're married, you're automatically more responsible.

Then it went down again when we turned 23. Why 23 is a magic number, I dunno.

I also remember one random decrease since 1998 that had nothing to do with marriage or birthdays.

If it helps, in the past 4 years we have had 2 car accidents, one was our fault (a teeny tiny scratch on someone's bumper) and one was the other guy's fault. No speeding tickets, ever, and no DUIs or anything like that.

As far as teens and driving go, you asked my opinion so here it is: I think the driving age should be raised to at least 18. Why? Because teenagers, in general, think they are invincible and they are reckless.

Anecdotal evidence time: there were 94 kids in my graduating class. Of the number that were handed cars when they hit 16 (probably about half of the class, as I graduated with a bunch of spoiled brats), roughly 1/3 of them totalled their first cars before they hit 17. Two damn near died. And those are the ones who TOTALLED the cars ... that's not to mention those who got into slight/moderate/nasty wrecks.

I'm not saying this to insult teenagers ... I have a very strong feeling that had I gotten my license that young, I probably would have hurt myself pretty bad. I was flighty and easily distracted.

Giving teens a chance SOUNDS great, but what do we do when they take their "chance" and kill themselves or someone else?

No, not ALL teenage drivers are After School Specials waiting to happen. (I'd say out of my high school buddies it was about half and half: half were good drivers and the others were downright dangerous.) But it could be argued that they DO have a greater chance of getting themselves hurt or killed ... if they didn't, insurance companies wouldn't charge out the butt for them.

I was 20, almost 21 when I got mine. My daughter will not be getting hers until she is AT LEAST out of high school, nor will she be allowed to ride around with her friends who *do* get handed cars when they hit 16.
Reply With Quote
  #3  
Old 08-28-2002, 05:21 AM
lucwarm lucwarm is offline
BANNED
 
Join Date: Sep 2000
Posts: 2,789
Re: My insurance will be high!! Argh!

Quote:
Originally posted by Teelo

My debate is, whether the insurance should start off low, and then if an accident insues, the insurance goes up. Which gives everyone one chance not to mess up,
Or,
Keep it high and slowly lessen the price as time goes on having no accidents. And slowly prooving you are a good driver.
For what it's worth, I like your approach, assuming it's actuarily viable. Essentially, you are saying that auto insurance companies should be prevented from discriminating according to age, but should instead dramatically raise the rates of those who develop poor driving records.

It would be interesting to see what proportion of crashes are caused by those who have speeding tickets, previous crashes, etc.

If it turns out that a big proportion of crashes are caused by teenagers with clean records, then I suppose there is a rationale for hitting them with big rates. Although it still sucks.
Reply With Quote
  #4  
Old 08-28-2002, 09:05 AM
Larry Bee Larry Bee is offline
Guest
 
Join Date: Jun 2001
One problem I can see with starting off low and then hitting them with a huge raise if they cause a accident is that they are under no obligation to drive/take out insurance again.
If they're still alive.
Reply With Quote
  #5  
Old 08-28-2002, 09:39 AM
dantheman dantheman is offline
Guest
 
Join Date: Dec 2000
I'm assuming that $4000 (and $2400) is in Canadian currency - how much is that in American dollars?
Reply With Quote
  #6  
Old 08-28-2002, 11:42 AM
december december is offline
BANNED
 
Join Date: Mar 1999
Location: New Jersey
Posts: 7,493
As an actuary, I do insurance ratemaking here in the states. I do not know how things work in Alberta. In particular, is insurance provided solely by the government or do private companies compete?

If the government is the sole provider, they can adjust rate relativities as they like. It's arguably more fair to base the differential solely on driving record, because you can't do anything about your age or sex. Your driving record is more-or-less under your control

OTOH it's statistically true that young men do have higher claims costs. Unfortunately, there's no way to distinguish between individual drivers' accident likelihoods. Rates have to be made on a group basis. You may be a safer driver than some other young man, but there's no way for the insurance company to know that.

When companies compete, it's essential for them to take age and sex into effect. If a company sold relatively cheap insurance to young male drivers, all the young men would buy insurance from them. The company would rapidly go bankrupt.

You can't change the system. The only thing you can do, Teelo is to drive carefully and not have an accident.
Reply With Quote
  #7  
Old 08-28-2002, 11:46 AM
horhay_achoa horhay_achoa is offline
Guest
 
Join Date: Jul 2001
I started a thread on this a while back.

http://boards.straightdope.com/sdmb/...threadid=77659



December. Why cant you change the system? If the government made it illegal for insurance companies to use age and sex as a factor, then all insurance companies would be in the same boat.
Reply With Quote
  #8  
Old 08-28-2002, 12:47 PM
Spit Spit is offline
Guest
 
Join Date: Oct 2001
I think insurance should start off high, then taper off.

Higher than it is now. I mean REALLY high. How does $5000 per year (US) at 16, then going down to $2000 at 23 sound? Maybe even a higher premium at 16.

Why you ask? Simple....I have seen too many kids die.

In fact, two days ago one died, and another is brain dead. The driver walked away, and will have to live with the guilt of a stupid teenage mistake for the rest of his life.

Interestingly enough, the teen who is on life support was involved in another accident in May of this year. Prom night.

He wrecked a car, and his 16 year old girlfriend was killed.


So raise those insurance rates! If lawmakers don't have the courage to raise the driving age, hit them where it hurts! Maybe it will keep a few kids alive.
Reply With Quote
  #9  
Old 08-28-2002, 12:49 PM
Zakalwe Zakalwe is offline
Charter Member
 
Join Date: Jul 2000
Location: Tallahassee, FL
Posts: 4,661
Quote:
Why cant you change the system? If the government made it illegal for insurance companies to use age and sex as a factor, then all insurance companies would be in the same boat.
Tell you what, horhay_achoa. Start an insurance company and do it your way. Lus know when you go broke, it won't be long, otherwise, please stop beating this horse, it's dead already.
Reply With Quote
  #10  
Old 08-28-2002, 01:12 PM
horhay_achoa horhay_achoa is offline
Guest
 
Join Date: Jul 2001
Quote:
Originally posted by grem0517


Tell you what, horhay_achoa. Start an insurance company and do it your way. Lus know when you go broke, it won't be long, otherwise, please stop beating this horse, it's dead already.
All I did was respond to a thread that some one else started. Geez!

I don't want to start an insurance company. Besides, I would go broke the way things are set up now. That doesn't mean things could not be set up differently though.
Reply With Quote
  #11  
Old 08-28-2002, 01:56 PM
december december is offline
BANNED
 
Join Date: Mar 1999
Location: New Jersey
Posts: 7,493
Quote:
Originally posted by horhay_achoa
December. Why cant you change the system? If the government made it illegal for insurance companies to use age and sex as a factor, then all insurance companies would be in the same boat.
It's hard to see what could be added to the points made on your other thread.
Reply With Quote
  #12  
Old 08-28-2002, 03:17 PM
Mr2001 Mr2001 is offline
Guest
 
Join Date: Dec 1999
Keeping rates high to keep kids off the road is no way to save lives: you can't become a better driver if you don't drive.

I know a 20 year old who hasn't gotten her license yet because no one has taken the time to practice driving with her. I haven't given her lessons because frankly, I don't trust someone who's never driven with my brand new car. (Well, also because it would be illegal and she wouldn't be insured.)

The feel of the road, the sense of your car's position, the ability to quickly scan your driving environment.. these are all things that come with practice. She isn't going to get any better at driving if she just sits there without driving a car, just like reading books about bike riding won't teach you how to ride a bike.

If insurance rates were prohibitive for minors, the only effect would be to raise the age of the inexperienced drivers. Instead of fearing teenagers on the road, you'd fear 25 year olds who are finally able to afford insurance.

That said, one way to lower your rates is to get a cheap car. (A cheap car is a great idea for new drivers anyway, since they're bound to back into a stump, grind the gearbox, burn out the clutch, etc.) And if your parents have a good history with their insurance company, you can usually get quite a discount by putting your car on their policy.

BTW, my insurance is over $4000/yr in US dollars, and I'm not a teenager. Count yourself lucky.
Reply With Quote
  #13  
Old 08-28-2002, 06:27 PM
Teelo Teelo is offline
Guest
 
Join Date: Aug 2002
December: I will take your advice and drive carefully.
Mr20001:Why is your insurance so high? Do you have every coverage? Or perhaps more than one vehicle?

Anywho, also in driving school, our teach gave us a sheet which showed the ages of people who had the most accidents, It was its highest point at 16-17 and as the years went by, it went down. For males and Femals. The female one was a little lower on everyone. Just a little bit.

Also, to the people who think that keeping insurance high will save lives, it doesn't! Look at how many people die anyway with the high insurance costs...Will lowering it make teens be even more reckless? It's possible.
What I think should be done is have driving school mandatory for every new driver. That would certainly give a better chance of fewer accidents.
Reply With Quote
  #14  
Old 08-28-2002, 06:35 PM
SteverinoAlaReno SteverinoAlaReno is offline
Guest
 
Join Date: Aug 2001
Quote:
Originally posted by Mr2001
Keeping rates high to keep kids off the road is no way to save lives: you can't become a better driver if you don't drive.
Sure it is. As you get older, you get wiser, calmer and a little more aware of your own mortality. You also become more responsible, for a variety of reasons. So, when you do start driving, you'll be less likely to cause an accident.

As has been pointed out, teens cause more than their share of accidents. So, putting fewer teens on the road will have a greater effect on the accident rates than, say, putting fewer 30-somethings on the road.
Reply With Quote
  #15  
Old 08-28-2002, 11:08 PM
Riboflavin Riboflavin is offline
Guest
 
Join Date: Jan 2000
If the insurance companies were forbidden to use age and sex to determine rates by the law, then they'd base insurance rates more strongly on the number of years you've been driving, which would still hit young drivers harder, and they'd raise rates overall. If you somehow factored age out completely, I suspect you'd end up with insurance companies mostly ditching auto insurance and you'd have most people unable to legally drive or a tax-subsidised insurance company. Since insurance companies have lobbiests, and the 16-18 demographic is not exactly a prime concern for politicians (the younger part can't vote, and the older ones tend not to), while the older drivers and taxpayers (who would foot the bill for whatever scheme you propose) are more of a concern, it's unlikely that any law along those lines would manage to pass in the US or Canada.

I don't really see what the problem is - teenage drivers are far more likely to get into accidents than any other age group. Insurance is based on the probabilities of unfortunate events happening, and it seems perfectly reasonable to me to let the group of drivers who are significantly higher-risk than others bear the costs associated with their driving. Also, the point of insurance rates is not really 'to save lives', but to cover the expenses in accidents, so arguing about whether changing insurance rates would change accident rates is rather pointless.
Reply With Quote
  #16  
Old 08-28-2002, 11:51 PM
Mr2001 Mr2001 is offline
Guest
 
Join Date: Dec 1999
Quote:
Originally posted by Teelo
Why is your insurance so high? Do you have every coverage? Or perhaps more than one vehicle?
I have full coverage (necessary for getting an auto loan), I'm under 25, and I have an unfortunate driving record. I also filed a $900 uninsured-motorist claim a couple years ago when someone backed his Jeep over my MR2; although I wasn't at fault, apparently it still counts against me.

I understand why the first three factors raise my rates. But come on, do they think that because an idiot crushed my hood two years ago, I'm some kind of idiot magnet who's going to cost them more in the future?
Quote:
Originally posted by SteverinoAlaReno
As has been pointed out, teens cause more than their share of accidents. So, putting fewer teens on the road will have a greater effect on the accident rates than, say, putting fewer 30-somethings on the road.
I see no reason to believe those accidents are caused by age, when there's a perfectly good, non-discriminatory explanation: lack of driving experience. Of course a 16 year old is likely to be a bad driver... he's had his license for less than a year. I wouldn't trust anyone with so little experience to drive my car, whether he's 16 or 30.
Quote:
Originally posted by Riboflavin
If the insurance companies were forbidden to use age and sex to determine rates by the law, then they'd base insurance rates more strongly on the number of years you've been driving
Sounds good to me.
Reply With Quote
  #17  
Old 08-29-2002, 10:41 AM
SteverinoAlaReno SteverinoAlaReno is offline
Guest
 
Join Date: Aug 2001
Quote:
Originally posted by Mr2001


I see no reason to believe those accidents are caused by age, when there's a perfectly good, non-discriminatory explanation: lack of driving experience. Of course a 16 year old is likely to be a bad driver... he's had his license for less than a year. I wouldn't trust anyone with so little experience to drive my car, whether he's 16 or 30.

Let's see the statistics on first-time drivers of age 21 vs age 16. I might agree that driving experience plays a part in the accident rate for teens, but immaturity and recklessness play a much larger part.
Reply With Quote
  #18  
Old 08-29-2002, 11:25 AM
horhay_achoa horhay_achoa is offline
Guest
 
Join Date: Jul 2001
Quote:
Originally posted by SteverinoAlaReno


Let's see the statistics on first-time drivers of age 21 vs age 16. I might agree that driving experience plays a part in the accident rate for teens, but immaturity and recklessness play a much larger part.
Not all teens are immature and reckless. That is the point.

It's like saying that black people should be charged more to buy a gun because statistically blacks commit more violent crimes.

http://www.ojp.usdoj.gov/bjs/glance/race.htm
Reply With Quote
  #19  
Old 08-29-2002, 12:09 PM
Liberal Liberal is offline
Guest
 
Join Date: Nov 1999
Insurance companies are a lot like you in one sense. They can't walk outside and pull money from a tree, and they have to pay out money for the immature and reckless teens.
Reply With Quote
  #20  
Old 08-29-2002, 06:51 PM
SteverinoAlaReno SteverinoAlaReno is offline
Guest
 
Join Date: Aug 2001
Quote:
Originally posted by horhay_achoa


Not all teens are immature and reckless. That is the point.
No one ever said all teens are reckless. The fact is that on average, teens are more reckless than any other age bracket, and so their insurance rates are higher. THAT is the point.

Quote:
It's like saying that black people should be charged more to buy a gun because statistically blacks commit more violent crimes.

http://www.ojp.usdoj.gov/bjs/glance/race.htm
A cheap and emotionally-charged obfuscation of the issue. It's an invalid analogy, to boot. Stick to the issue of insurance.
Reply With Quote
  #21  
Old 08-29-2002, 09:21 PM
Mr2001 Mr2001 is offline
Guest
 
Join Date: Dec 1999
Quote:
Originally posted by SteverinoAlaReno
Let's see the statistics on first-time drivers of age 21 vs age 16. I might agree that driving experience plays a part in the accident rate for teens, but immaturity and recklessness play a much larger part.
Not the same age groups, but this UMich study (PDF) compares the effects of age and driving experience on accident rates, for ages between 18-25 and driving experience between 1-2 years.

According to the study:
  • Age-related factors level off around age 23 (not 25, when insurance companies typically drop rates)
  • An 18 year old driver with two years of experience is about as likely to have an accident as a 20 year old driver with one year of experience
  • A 19 year old driver with two years of experience is about as likely to have an accident as a 25 year old driver with two years of experience
Reply With Quote
  #22  
Old 08-30-2002, 01:35 PM
Teelo Teelo is offline
Guest
 
Join Date: Aug 2002
Quote:
Originally posted by Mr2001


I understand why the first three factors raise my rates. But come on, do they think that because an idiot crushed my hood two years ago, I'm some kind of idiot magnet who's going to cost them more in the future?

I'm sorry to hear that, life can be a bitch eh?
Reply With Quote
  #23  
Old 09-01-2002, 09:36 AM
MrPeabody MrPeabody is offline
Guest
 
Join Date: Oct 2001
One thing to consider, you canít base rates only on frequency of accidents you must also consider the severity of the claim. I own an insurance agency and I see what money comes in and what is paid out in claims

When you compare a sixteen year old female and a sixteen year old male, my agency statistics show accident frequency is similar, but the amount paid out in the maleís behalf is almost five times greater.
Using an example, when a sixteen year old girl has an accident she is more likely to be alone in the car backing out of a parking spot or hitting a curb. But it only takes one sixteen year old boy traveling at 94 miles an hour with four people in the car, hitting another car killing four people, to skew the rates for the entire age group.

Most males drive just as well as most females but the few huge losses they suffer skew the rate upward for the entire group.
Reply With Quote
  #24  
Old 09-02-2002, 02:37 PM
Fear Itself Fear Itself is offline
ɯǝlqoɹd ɐ ǝʌɐɥ ǝʍ 'uoʇsnoɥ
Charter Member
 
Join Date: Apr 1999
Location: Flavortown
Posts: 34,325
In my opinion, the entire insurance industry is headed for a meltdown. The value of claims paid will continue to increase, necessitating spiralling premiums. But the there is a limit beyond which the public can no longer pay increases, no matter what the penalties, the money just isn't there. Is it realistic to expect them to stop driving, and bring their lives to a halt? No, they will continue driving, without insurance. There will be more uninsured motorist claims, increasing costs and fueling the claims/premium spiral. Ultimately, something has to give, and if drivers continue to leave the system, it is going to be the insurance companies. I predict widespread bankruptcies withing the next ten years, or, at the very least, fewer companies writing car insurance policies at astronomical rates that only the very wealthy can afford. The rest of us will just go outlaw.
Reply With Quote
  #25  
Old 09-03-2002, 09:37 AM
GingerOfTheNorth GingerOfTheNorth is offline
Guest
 
Join Date: May 2001
Having been an Insurance broker in Alberta primarily for 13 years, let me tell you how it works.

Your rates are based on your age, gender driving record. The rates are determined by others of your age, sex, and driving record in the past. Insurance is a financial arrangement and that is why the statistics are used they way that they are. It is not discriminatory for the insurance company to charge you exactly the same amount as they would for another person of your age, gender, and driving record.

Alberta has very high rates for males under the age of 25. That is due to the fact that there are a lot of males under the age of 25 that speed around the back roads while drunk, and smash up their cars and trucks, and cause damage to other people's property. I know, because I was with some of these guys when I was under the age of 25.

There is no way that Insurance companies are going to expose themselves to high financial loss by underwriting young men at a lower rate because they think that maybe they won't have accidents. It doesn't work that way. Insurance is there so that the losses of the few are paid for by the premiums of many. Insurance will be there to pay out when you have an accident purely because so many people pay into it.

Hold on for a few years. It drops drastically. Try to get to a broker that deals with Wawanesa, or ING Western Union - they will look at younger men with clean records or driver training, so long as you've been in a Facility market for a year or two. If you give me your location, I will find a broker for you that I have dealt with in the past.

Do not discount the fact that a caring broker will do everything they possibly can to help you out, if they're any good at their job. I have kids that I helped out years ago that still send Christmas cards.
Reply With Quote
Reply



Bookmarks

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is Off
HTML code is Off

Forum Jump


All times are GMT -5. The time now is 07:24 PM.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2017, vBulletin Solutions, Inc.

Send questions for Cecil Adams to: cecil@chicagoreader.com

Send comments about this website to: webmaster@straightdope.com

Terms of Use / Privacy Policy

Advertise on the Straight Dope!
(Your direct line to thousands of the smartest, hippest people on the planet, plus a few total dipsticks.)

Publishers - interested in subscribing to the Straight Dope?
Write to: sdsubscriptions@chicagoreader.com.

Copyright © 2017 Sun-Times Media, LLC.