I would be leery of any regulation that would control how a company decides to make price adjustments. It’s not like none of the clients couldn’t just get another insurer if they were unhappy.
Would you be less leery if you remembered it’s a government mandated product?
Two ways that actually fails...
Many insurers won’t quote at all if they see claims in the previous three years. Or they’ll quote so high you won’t switch. Either way, you’re in for a mandatory three years at not just higher rates, but artificially inflated higher rates by demographic data that says you’ll pay.
(They’ll essentially trap you at their buddy. Their buddy does the same for them. Wink wink.)
Secondarily, all insurers are moving to these “algorithm based” models AND they already share claim and coverage data. It’s becoming unavoidable. Just like the so called “credit score”. Certain things just shouldn’t be allowed in the algorithm.
Not sure if you’ve quoted coverage recently but it’s a shared database. VIN and done. They know everything about the vehicle, you (now including income level and other information easily gleaned from other demographic data, like address, etc), and such. It’s really rare to have a human involved in a serious manual underwriting process. It’s just a computer score.
They’ll even pull the description of your house and photos of it if you’re quoting homeowners.
(It’s often Google Street View photos, too. Two separate companies wouldn’t quote my house due to lack of Google photos in a rural area. One said flat no. The other said they could send a third party photo company in three weeks. Hmm. I get poorer service because Google cars don’t drive my street? Yeah... you can eff right off and cancel the coverage quote request... bye now.)
Merged databases means they’re not really different companies with different research and data competing. They’re just different storefronts and marketing slapped on the same product. The computer is deciding using data from a shared database. The call center person you’re talking to when you call isn’t a licensed insurance professional. They just enter data and the computer spits out the price and policy.
Which NFL quarterback and commercials do you like? Haha. Those commercials and golf tournaments aren’t cheap. Pay up!
Kinda like the news that Intuit just purchased CreditKarma. They want the data from a credit scoring company to merge it with their lending company. Much easier than paying a third party for it.
Insurers also use credit scores already, by the way. Should say, GEICO be allowed to buy Experian or TransUnion?
It’s the next natural database merge... why not? Your insurer needs access to your payment history and asset information to know you’re responsible, right?
I don’t mind them covering losses and pricing accordingly but I do mind if the neighbor pays less because he has a smaller savings account for identical coverage.
Regulators of a mandatory product can regulate the crap out of that, and ban it, all week long, and twice on Sunday. You don’t have the option not to purchase, especially with the games mentioned above.
Beware. I know about that claim game because one well known insurer turns in towing claims to the shared database. No accident or real loss involved. Don’t buy the cheap towing coverage with auto insurance. It’ll turn into that three year lock in.
Let’s just say they know how to scam customers, because they’ve scammed a million or two.
I’m sure if cornered, they’d say it was a mistake. But good luck getting it out of the database... their agents don’t know about it. They’ll turn in a “ticket” with someone. That person will respond saying they didn’t do it, the underwriter did. Good luck reaching the underwriter. Or for that matter a regulator who cares.
Did I mention the agent is already mad that you’re leaving? That’ll speed up return calls! Haha.
Months to remove garbage like that. If at all. Agent can’t fix it. Back room can’t fix it. And we say “merge” but it’s not a true database merge. It’s a lookup and copy. Once it’s gone you have to hound the call center person to re-query at the competition. They don’t know how. Or don’t have access to. Another ticket. Another back room that might be able to or not.
Or won’t because now they really don’t trust you. Who calls and knows how our databases work?! LOL.
“You didn’t meet the standard algorithm model... based on bad data in our shared database. We Don’t know how to remove it. Here’s your new inflated price for government mandated coverage from every underwriter.”
^^ That’s already here. ^^
Aren’t computers great?
