3 ms·
This is assuming that auto insurance isn't a competiitve industry. If a company attempts to raise rates because of a trend that doesn't actually exist, they wil
by jonfw 7y ago
This is assuming that auto insurance isn't a competiitve industry. If a company attempts to raise rates because of a trend that doesn't actually exist, they will inevitably not be competitive with companies that recognize that the trend doesn't exist, and thus it won't change prices for the consumer.
If the insurance companies could arbitrarily raise rates due to a trend that doesn't exist, than they would have already done so. These companies know their margin and they don't bid above that if they want to be competitive.
- autoexec 7y ago> If a company attempts to raise rates because of a trend that doesn't actually exist, they will inevitably not be competitive with companies that recognize that the trend doesn't exist, that assumes that all companies involved aren't doing the same thing. Corporations figured out a long time ago that when one of their competitors does something that makes them more money at the expense of their customers they could start doing the same thing to their own customers and profits increase for everyone without risking prices being driven down by a truly competitive market. The insurance industry in particular is has a long history of shady practices from good old fashioned collusion and price fixing to new techniques like data mining to charge customers different rates depending on where they live, what jobs they have, or how often they're willing to change insurance companies.
- jonfw 7y agoIf you have reason to believe that the insurance industry is colluding to artificially inflate prices, that's a criminal accusation. If you want to make criminal accusations you start with evidence. In my view, the insurance industry looks competitive, which means that even though these shady practices happen they can't effectively dictate the entire market.