Quizzes & Puzzles1 min ago
Horrific Rise In Insurance
I insured my daughter to drive my car when she was at home. At the time she was teaching drama to school children and was described as being a teacher. When I came to re-insure the car she was happily back where she wanted to be, regularly working on stage and TV. She has had her licence for 12 years and has never had a problem but because her profession was now described as "actress" my premium sky rocketed. Does anyone understand why this should be?
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Whether it is prejudice or not is debateable.
It could be argued (as was recently undertaken by the EU in the case of differing premiums for male and female drivers) that to assess the risk of any group by means of gender, age, sexual orientation, occupation, or race (or indeed just about anything else) is prejudicial (that is, the companies are prejudging the risk of all members of a group based on their experiences of a few).
However, insurers need to assess risk. It's what they do to set their premiums. So unless they are going to charge all their policyholders the same amount regardless of their age, driving experience, the car they drive, their driving record and so on, they need to be able to group people into risk categories. Just about any way this is done is prejudicial. It's quite obvious that some young inexperienced drivers will have an incident free record. But many won't. So all of them are placed in a higher risk category. Insurers cannot wait to see how their driving history turns out before setting their premium and only bump it up if they have accidents.
It could be argued (as was recently undertaken by the EU in the case of differing premiums for male and female drivers) that to assess the risk of any group by means of gender, age, sexual orientation, occupation, or race (or indeed just about anything else) is prejudicial (that is, the companies are prejudging the risk of all members of a group based on their experiences of a few).
However, insurers need to assess risk. It's what they do to set their premiums. So unless they are going to charge all their policyholders the same amount regardless of their age, driving experience, the car they drive, their driving record and so on, they need to be able to group people into risk categories. Just about any way this is done is prejudicial. It's quite obvious that some young inexperienced drivers will have an incident free record. But many won't. So all of them are placed in a higher risk category. Insurers cannot wait to see how their driving history turns out before setting their premium and only bump it up if they have accidents.
It's not prejudice shoota it's underwriting. Insurance companies have access to vast databases of stats and they know the risks of any aspect of insurance, occupation being one, location being another, past driving record, etc etc. That's why they want an arm an a leg for teenagers because they know that they hit things, simple. Would any of us in low risk categories be happy to subsidise the higher risk ones? Nope? thought not.
If insurers succeeded in assessing risk perfectly no one would get insurance since the premium they paid would simply cover the claims they were going to make, plus the insurers' profit on top. The industry would be ruined. So there is only so far one can sympathise with the risk assessment bit. Maybe the question is what to take into consideration and what not. Perhaps the main driver (no pun intended) for deciding these things ought not be one's profession but one's past record ?
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My reason given is the correct one,as per the professional examinations of the Chartered Insurance Institute.
Just think for a moment and consider the vast sums that would have to be paid if four passengers were say professional footballers (earning over £10000 per week,who could not play football again.
Then compare that with say four teachers eg.
Just think for a moment and consider the vast sums that would have to be paid if four passengers were say professional footballers (earning over £10000 per week,who could not play football again.
Then compare that with say four teachers eg.
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