Pay-as-you-go Insurance: What are your thoughts?

[VifferFun]

I don't get how it can't be as simple as a transferable licence plate. Each person is issued a licence plate just like they're issued their licence in the first place. The licence plate can reflect the types of vehicles they're licenced to drive and that insurance would cover any vehicle they drive/ride. If it's true that the majority of the insurance charge is in the liability of hurting the person/operator of the vehicle or other vehicles then it shouldn't matter much what the person is actually driving/riding... I mean I pay just as much insurance for my POS corolla as my friends do in brand new SUV's....

The car you drive actually does have an impact on your premium (based on the CLEAR Rate Groups which I explained in my sticky). SUV's have excellent Accident Benefits rates, so the premium for a new SUV could be comparable to your old Corolla.

The problem with the license plate idea is that we wouldn't know how whether to rate you on a $10K Corolla, an $80K Yukon, or a $300K Lamborghini. You are licensed to drive all of these vehicles, but each poses a different risk to the insurer.

In North America, we insure the vehicle and not the operator; however, I agree that insuring the operator rather than the vehicle has many benefits; however, there are drawbacks as well. Would you want married couples to each buy their own insurance policy to drive a single vehicle? If you insured the operator rather than the vehicle, then households with more operators than vehicles would pay significantly more.

[13lotusflowers]

The car you drive actually does have an impact on your premium (based on the CLEAR Rate Groups which I explained in my sticky). SUV's have excellent Accident Benefits rates, so the premium for a new SUV could be comparable to your old Corolla.

The problem with the license plate idea is that we wouldn't know how whether to rate you on a $10K Corolla, an $80K Yukon, or a $300K Lamborghini. You are licensed to drive all of these vehicles, but each poses a different risk to the insurer.

In North America, we insure the vehicle and not the operator; however, I agree that insuring the operator rather than the vehicle has many benefits; however, there are drawbacks as well. Would you want married couples to each buy their own insurance policy to drive a single vehicle? If you insured the operator rather than the vehicle, then households with more operators than vehicles would pay significantly more.

Well what if my rate was based on my most expensive to insure vehicle... I would have to pay insurance on it anyhow, so that should be the rate.

And yes, I would want married couples to buy their own insurance policy to drive a single vehicle. I don't see why they get a benefit as it's two people sharing one vehicle. I drive my car maybe 5 times a month as my bf does most the driving, but I don't see much a discount because of that.

Who cares if it's one car or three... there is two people causing the risk... just maybe at different times... they get the benefit of not having to pay for the actual extra vehicles, but when it comes down to it, they probably drive their vehicle multiple times more than one person anyhow and should pay the higher premium to insure it.

My person can not be in the multiple vehicles causing the additional risk, I shouldn't have to pay the addition just for having extra vehicles. I've already paid the expense to have them and maintain them.

[LiNK666]

Don't like the idea of a database keeping records of where I travel.

Won't happen, not in canada.

Imagine, the guy keeping records sees that I'm at his house while he's not.... imagine that... he'd come at me with a shotgun with I'm entertaining his wife.

[eastcoast_gsx]

Don't like the idea of a database keeping records of where I travel.

Have a cell phone... if so your SOL I am afraid.

[mazdubb]

I agree that we need to overhaul the way we're insured here.

There should be a small change to where an operator could only be insured on one vehicle and all other vehicles owned and insured are charged for the vehicle only.

I don't think the insurance companies should have access to minor convictions on our driving records either. More often then not it just gives them an excuse to raise rates. Which encourages anyone who gets a ticket to fight it until the death in court which ends up costing us all more money in our taxes.

[mikem]

What's next, insurance company's offering to not increase your rates provided you install a device that governs the speed of your vehicle to the posted limit or puts it into "limp home" mode should you exceed your allotted annual mileage.

[VifferFun]

Well what if my rate was based on my most expensive to insure vehicle... I would have to pay insurance on it anyhow, so that should be the rate.

And yes, I would want married couples to buy their own insurance policy to drive a single vehicle. I don't see why they get a benefit as it's two people sharing one vehicle. I drive my car maybe 5 times a month as my bf does most the driving, but I don't see much a discount because of that.

Who cares if it's one car or three... there is two people causing the risk... just maybe at different times... they get the benefit of not having to pay for the actual extra vehicles, but when it comes down to it, they probably drive their vehicle multiple times more than one person anyhow and should pay the higher premium to insure it.

My person can not be in the multiple vehicles causing the additional risk, I shouldn't have to pay the addition just for having extra vehicles. I've already paid the expense to have them and maintain them.

With a married couple, only one of the two people can be using the car at the same time. There are many more married couples than there are single people owning multiple vehicles. Helping those fortunate enough to own multiple vehicles as opposed to families with a single vehicle is not socially or environmentally acceptable.

It would be nice to come up with a good way to charge a single premium for people who own multiple vehicles, but I'm still not sure at the moment. You can't charge based on the "highest value", because the purchase value of a vehicle does not represent its risk to an insurer. Each vehicle is rated three ways:

a.) You likelihood of being hurt in the vehicle
b.) The likelihood of your vehicle being stolen
c.) The cost to replace/repair your vehicle

An expensive vehicle might also be a safe one. A cheap vehicle might also be a death trap.

[CruisnGrrl]

you can insure the driver for their habits and still collect a base rate for the vehicle. when i lived in saskatchewan my base rate for my blazer with full coverage was 50$ a month. this didn't change regardless of tickets. the cost to renew my licence changed depending on my tickets, etc.

[VifferFun]

you can insure the driver for their habits and still collect a base rate for the vehicle. when i lived in saskatchewan my base rate for my blazer with full coverage was 50$ a month. this didn't change regardless of tickets. the cost to renew my licence changed depending on my tickets, etc.

I am aware of the Government Insurance in Sasakatchewan (since I price insurance in that province as well). The Government offers the mandatory road coverages, and then you are free to go to the private sector to purchase your optional coverages (i.e. Collision and Comprehensive). My company actually has quite a large book of business in Saskatchewan, because we are cheaper on the optional coverages than SGI.

SGI doesn't need to be careful about risk segmentation because they have a monopoly on the insurance market for mandatory coverages. In the private sector it is different; if one company undercharges for people with convictions, then they will inevitably end up with a growing client base of unprofitable people who are being undercharged for their convictions. In Saskatchewan, people with convictions are not surcharged because the people without convictions are subsidizing them by paying more.

[GreyGhost]

For all the people worried about being tracked, there are a couple ways to make that less of an issue and still get the insurance company the info they want.

1)Have the system insert random errors into the data so it shows that you were somewhere within a few blocks, but not exactly where you were. This should be good enough for rating.

2)Do not correlate time and position data. Have one part of the device record when it was used and another part where it was used (but have no time data in the second part). The insurer would end up with a map that looks like a cell tower coverage map that shows where you drive most, but they would have no idea when you were in each location. For speed tracking, it could log the speed and location, but not the time. Again, not useful in court as evidence.

The problem with the whole system is if it is involuntary, people have significant big brother concerns, if it is voluntary, the majority of the people in the program will likely be low risk people hoping for lower rates. The high risk people know why they got that rating and likely will not want to be monitored. If too many low risk people sign up, they will all be moving down the rate tables, so by definition, those without a monitor must move up. I agree that it could be a godsend for people with multiple bikes that like to cruise around, but can't afford insurance on all of them at the same time though.

[jailbreak]

Pay As You Go may be a nice option; however, with all the rest of the crap listed such as they see how fast i'm going or how i'm riding/driving sounds horrible

[FiReSTaRT]

My own wife doesn't know my whereabouts all the time. I shudder at the very thought of a private enterprise and/or the government knowing them. If too many sheeple sign on for this, people with privacy concerns, even if they're low risk operators will be price-prohibited from driving.

[13lotusflowers]

With a married couple, only one of the two people can be using the car at the same time. There are many more married couples than there are single people owning multiple vehicles. Helping those fortunate enough to own multiple vehicles as opposed to families with a single vehicle is not socially or environmentally acceptable.

It would be nice to come up with a good way to charge a single premium for people who own multiple vehicles, but I'm still not sure at the moment. You can't charge based on the "highest value", because the purchase value of a vehicle does not represent its risk to an insurer. Each vehicle is rated three ways:

a.) You likelihood of being hurt in the vehicle
b.) The likelihood of your vehicle being stolen
c.) The cost to replace/repair your vehicle

An expensive vehicle might also be a safe one. A cheap vehicle might also be a death trap.

Okay, fine, not on highest value, on highest risk... you should have caught my drift, I'm not the insurance stats analysist, you are... you should get where I was going with it...

And as far as the discount to one vehicle with multiple users, what I was saying is they'll all take turns to drive the one vehicle and likely still be using it as much as me and my bf use our 5. Mom will go out and as soon as she returns dad will run out and take kids to wherever and come back and teenage daughter will take it out for the night. I might use my car to go to work, and bf to go to get groceries, but we've still only used two vehicles twice in one day and the family has used it three times and we pay more becuase we own five vehicles.

There's really more married couples owning only one vehichle than there are people owning one? I find that so hard to believe as I've rarely encountered any family that doesn't have at least two vehicles.

I really hate the benefit given to a bunch of people that shack up legally for a short period of time. But that's a whole other rant.

[VifferFun]

The problem with the whole system is if it is involuntary, people have significant big brother concerns, if it is voluntary, the majority of the people in the program will likely be low risk people hoping for lower rates. The high risk people know why they got that rating and likely will not want to be monitored. If too many low risk people sign up, they will all be moving down the rate tables, so by definition, those without a monitor must move up. I agree that it could be a godsend for people with multiple bikes that like to cruise around, but can't afford insurance on all of them at the same time though.

You really understand the way that insurance rates are set. You are indeed correct that the rates for involuntary clients would end up increasing in order to decrease the rates of the voluntary clients while remaining premium neutral. This kind of makes sense, because the involuntary clients are more than likely trying to hide something.

I like your suggestions to help overcome the Big Brother concerns.

Before people jump on me, once again I reiterate that I am not advocating the idea, but rather seeing what people think. My company is not considering such a plan, nor is it even in our long-term scope.

[VifferFun]

My own wife doesn't know my whereabouts all the time. I shudder at the very thought of a private enterprise and/or the government knowing them. If too many sheeple sign on for this, people with privacy concerns, even if they're low risk operators will be price-prohibited from driving.

As GreyGhost pointed out, the insurer would not care about your specific whereabouts, but rather your general whereabouts (and it wouldn't have to be correlated with time). We would just want to know whether the majority of your driving is in the downtown corps, your suburb, a city far away, etc.

[Chuck U. Farlie]

How is this pay-as-you-go? Would I be given a bill each month based on my previous months usage? If I didn't use my car at all for a month, would my next months bill be close to $0?

As outlined above there doesn't seem to be anything that makes it pay-as-you-go, rather it seems a way for the insurance company to know exactly how you use your car and therefore exactly how to rape you.

[FiReSTaRT]

As GreyGhost pointed out, the insurer would not care about your specific whereabouts, but rather your general whereabouts (and it wouldn't have to be correlated with time). We would just want to know whether the majority of your driving is in the downtown corps, your suburb, a city far away, etc.

There is a big gap between what the insurance industry is officially interested in and what is really collected. The kind of data that is collected through this program includes the whereabouts of my vehicle(s) at all times. There is huge market for such data, including the government, marketing companies and organized crime. The government can subpoena the data, while the other players can buy the data, either unofficially from the insurer or by an employee who could use some extra income. You have to realize that this goes beyond Big Brother.

[VifferFun]

Okay, fine, not on highest value, on highest risk... you should have caught my drift, I'm not the insurance stats analysist, you are... you should get where I was going with it...

I understood what you meant, but an insurer can't simply say that with your policy, "you can drive any vehicle with a risk factor of 5.3 or less". The client would have no way of knowing the risk factors of specific vehicles.

And as far as the discount to one vehicle with multiple users, what I was saying is they'll all take turns to drive the one vehicle and likely still be using it as much as me and my bf use our 5. Mom will go out and as soon as she returns dad will run out and take kids to wherever and come back and teenage daughter will take it out for the night. I might use my car to go to work, and bf to go to get groceries, but we've still only used two vehicles twice in one day and the family has used it three times and we pay more becuase we own five vehicles.

I understand your argument, and I'm not saying that you are wrong. Typically, the claims experience of married couples are not terrible, even though they might use the car more as you suggested. We don't care so much about how much the car is used, but rather the likelihood of a claim being made.

There's really more married couples owning only one vehichle than there are people owning one? I find that so hard to believe as I've rarely encountered any family that doesn't have at least two vehicles.

That's not what I said. I said there are more instances of a single vehicle shared by multiple operators than there are instances of multiple vehicles being used by a single operator.

I really hate the benefit given to a bunch of people that shack up legally for a short period of time. But that's a whole other rant.

It is the benefit of sharing a vehicle: whether you are married to the person, roommates, parent-daughter, etc . . . it doesn't really matter. Offering a single premium to people who own multiple cars rather than multiple people who own a single car is not a good idea for the environment. Vehicles are wasteful enough as they are . . . there is no need to encourage every living person to have their own, or to even own multiple vehicles.

[VifferFun]

How is this pay-as-you-go? Would I be given a bill each month based on my previous months usage? If I didn't use my car at all for a month, would my next months bill be close to $0?

As outlined above there doesn't seem to be anything that makes it pay-as-you-go, rather it seems a way for the insurance company to know exactly how you use your car and therefore exactly how to rape you.

The document that I read labeled it as "Pay-as-you-go". Given the information that I have posted, I agree that it doesn't appear to be as such. What I think it means is that people who use their cars less will pay significantly less than people who use it a lot. Currently, we cannot distinguish between these two groups because the vast majority of high-mileage clients lie on their insurance application.

If such a system were ever implemented, I could see the possibility of charging a premium per km of usage, which would definitely make it Pay-as-you-go. Rather than paying $1500/yr for a policy where you drive about 20,000 kms a year, we could charge you $0.065/km in the Spring/Summer/Fall, and $0.105/km in the Winter (due to the higher probability of a claim). If you only drive your car 5000kms in the winter and 5000kms in the Spring/Summer/Fall, you could get by with paying $850/yr instead of $1500/yr.

[VifferFun]

There is a big gap between what the insurance industry is officially interested in and what is really collected. The kind of data that is collected through this program includes the whereabouts of my vehicle(s) at all times. There is huge market for such data, including the government, marketing companies and organized crime. The government can subpoena the data, while the other players can buy the data, either unofficially from the insurer or by an employee who could use some extra income. You have to realize that this goes beyond Big Brother.

I'm not arguing that there aren't privacy concerns. As GreyGhost pointed out, there are ways of circumventing the problems. The insurer is not interested in pin-point accuracy of your locations driven.