State Farm Pulling Out of Florida

[Crabcake Johnny]

True - but it also poses a catch-22. People on those neighborhoods can't afford the insurance - can't have a car.

No car? Now you're on public transportation which makes getting a good job a nightmare since it has to be along a bus route.

High auto insurance rates in "bad" areas just helps poor people stay poor.

 

[SportsNut]

High auto insurance rates in "bad" areas just helps poor people stay poor.

Now that was the one thing that Congress missed today with their 816 Mil pork-pkg, auto insurance subsidies... I knew there was one thing they missed.

Ins is a lot about personal responsibility. Poor does not afford an excuse for irresponsibility... in fact I have known some very poor ppl (mostly older) that knew all about, and practiced responsible behavior... unfortunately we have departed from rewarding those that should be rewarded, and have all too long ago began making "irresponsible" pay off....

 

[Crabcake Johnny]

Health insurance doesn't ask about your credit, income or anything else. A lot of rates are just state - not zip code based so poor people in bad areas get the exact same rates as rich people.

Maybe someone can show me that a poor person is a worse driver? Unlikely.

 

[SportsNut]

Maybe someone can show me that a poor person is a worse driver? Unlikely.

Desperation seems to know the zip codes by heart.

Do you think that a financially desperate person is apt to take more chances...? Be a larger risk...? Apparently there is something to this... cause you know ins cos aren't about to turn away "good premiums"... aka profitable business.

Lets see... what is coming to mind is the situation last year... sitting at a stoplight, and an older Buick runs into the back of me... maybe 10 mph, streets were wet from a light drizzle. Two young females with a baby in the back seat, (fortunately in a car seat). I got out, checked them, all ok... I said wait right here... While I am on the phone with police, I notice the car speeding away from the scene... Give chase, catch them at the next light... driver says "I am going to check with my mama to see what I posed to do". Of course I informed her that she "posed to be sittin her azz back at the scene of the accident"...

Bottom line is, within 30 mins, the car is called into police as stolen. They know how to take NO responsibility for their actions... consequently, this is part of why ins costs the "honest poor" more money.

Back to your original question... about poor and bad diver... This gal was no doubt poor, and she was a shitty driver, and that was that.

It is no different than one of those potential health ins clients you deal with... when you ascertain they are high risk for a near claim, you say next. What if they are poor, or need ins...? Insurance morals have left the bldg...

 

[eric rose]

Health insurance doesn't ask about your credit, income or anything else. A lot of rates are just state - not zip code based so poor people in bad areas get the exact same rates as rich people.

Maybe someone can show me that a poor person is a worse driver? Unlikely.

The issue is not that they are or are not a worse driver. The issue is that they have a higher propensity for a claim. Theft and vandalism are much more common in urban areas. Poorer cities tend to have more people living and driving in a smaller more congested area.

The vicious cycle really takes off with uninsured motorist coverage. More people drive uninsured because they can't afford the already high rates. Claims paid due to an uninsured driver will inevitably raise rates higher causing more people to be unable to afford insurance. The cycle just goes on and on.

When I started writing P & C business I was dead set against using a credit score, insurance score or a financial management score for rating purposes. As it turns out the actuaries are right. My loss ratios trend right in line with their tiering. I'm not happy about it but it is accurate.
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Actually the problem is that some rates are not high enough.

Rates for coastal risks are being propped up by the inland folks, and rates are artificially low for those coastal risks.

Of course the politicians, being the cowards that they are, won't support sound rates, bowing to "political pressure". If they would quit messing with it, the free and open market will solve the problem.

If you choose to live in an eight million dollar oceanfront property, and choose to insure it, you should pay a premium comensurate with the risk, no?

You are dead on Moonlight! There is no such thing as a bad risk, but there sure as heck is such a thing as insufficient premium for that risk. State Farm has been unable to get adequate rates approved for their risk. They would have no reason to do this if they could charge rates high enough to remain profitable.

 

[Russ]

State Farm explains decision....State Farm explains decision to leave Florida | state, decision, tallahassee - News - Northwest Florida Daily News

 

[djs]

Maybe someone can show me that a poor person is a worse driver? Unlikely.

Rich or poor has nothing to do with driving habits. Now, if you take credit into account, you will find a direct coorelation, like it or not. California doesn't use credit, but I can see the benefit of doing so.

P&C agents tend to get bonuses for profitability. The fastest way to lose profitability is to write policies at used car lots that provide loans to those who probably shouldn't be trusted with a loan (i.e., several repos already). I lost my shirt on this for a while.

Finally figured out that personal responsibility tends to transcend all parts of a persons life, whether it's credit or driving. Many rich people have bad credit and are bad drivers. Many poor people are excellent drivers and have good credit.

I know if you look at single individuals, this doesn't necessarily track, but if you look at several, it does.

Sort of like why does an auto insurance company care if you got a speeding ticket (which they don't pay)? It's shown that this raises the odds significantly of an accident that they will have to pay.

Why do they raise your rates if you get into an accident? Not to pay for the accident you had (they have to pay that regardless), but the odds of you getting into another accident are much higher!

Dan