How Do "They" Figure Out
My Car Insurance Rates?
Important Words:
Actuary: An individual that passed statistics.
Insurance Executive: An individual that failed statistics.
Farmers Insurance Executive: An individual that hates people that did not fail statistics.
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The Insurance Industry uses a complicated formula to determine rates called "Risk Modeling". This takes the following into consideration:
1. Age of the Driver: Statistically 16 year olds have a 100% chance of being in a car accident. The numbers are the same for those over age 65. Thus, having Grandpa drive the kids to high school is probably not your best idea.
2. Ticket History: Those that get tickets do so because they like to take risk. Risk means accidents and thus, they pay a higher rate for their car insurance.
3. Accident History: In insurance, the best predictor of what will happen in the future is what already happened in the past.
4. Type of Car: Some cars are a greater "theft" risk and others just seem to get in more accidents or acquire more speeding tickets. But remember, cars don't hit pedestrians in the crosswalk, people do.
5. Distance to Work: For some reason, most "problems" occur on the way to and from work. This is a result of many things happening....
a. The good shows start at 6:00; and your too cheap to buy TIVO.
b. You honestly thought that the shoulder was a "passing lane"
c. "Jedi Mind Tricks don't work on police officers...they're "Todarian".
Either way you look at it, you are a commuter on his way to or from work...not some freak of nature with an unnatural amount of "mitichloryians" in his blood... dodging Tuscan Raiders in a pod race.
6. Credit Scoring: For some reason, people with really bad credit are also a greater risk to the insurance company. This too can be explained:
a. The casino closes at 3 in the morning.
b. The divorce isn't "final" until the "ex" leaves an imprint on the front bumper.
c. You can make more "money" if you sell your car in pieces instead of all at once.
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