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In an efficient market insurance premiums are essentially zero sum. The more that one person pays to offset their own risk, the less everyone else pays. Safe d
by AbrahamParangi 2y ago
In an efficient market insurance premiums are essentially zero sum. The more that one person pays to offset their own risk, the less everyone else pays.
Safe drivers subsidize unsafe drivers and this subsidy can and should be reduced when possible with better predictive information.
- saagarjha 2y agoPerhaps the market should not strive for optimal efficiency then.
- IncreasePosts 2y agoWhy? You'd probably have better outcomes for everyone with more information. Unsafe drivers might start reigning in their bad habits because it is costing them money every month, and safe drivers will save money. Seems like a win-win. I'd love it if my dash cam could do ALPR and send a video to the registered insurance agency when I see some absolutely ludicrous driving.
- klyrs 2y agoIn this model, what incentivizes safe drivers to have insurance? And then when a "safe driver" wipes out in a freak snow storm and racks up a million dollars in damages that they can't afford to pay, where's the win-win?
- lotsofpulp 2y agoThe same thing that incentivizes them right now, legal requirements to maintain a certain minimum amount of auto liability insurance in order to be able to legally drive. Which, by the way, is currently far less than a million dollars in every jurisdiction I know. https://www.autoinsurance.org/car-insurance-requirements/ https://www.autoinsurance.org/car-insurance-requirements/
- simcup 2y agomay i introduce you to the jurisdiction of germany? 7.5m for personal injury, 1.3m for property damage and 50k for ?financial loss? (ger:reiner vermögensschaden) [1][2]. granted that's in euro so exchange rates are to be considered [1] https://www.bussgeldkatalog.org/deckungssumme-kfz-haftpflicht/ https://www.bussgeldkatalog.org/deckungssumme-kfz-haftpflich... [2] https://www.gesetze-im-internet.de/pflvg/anlage.html https://www.gesetze-im-internet.de/pflvg/anlage.html edit: as a point of comparison, i can't find it at moment but i think i remember my last car insurance was covering 100m for personal insuries
- lotsofpulp 2y agoThat’s amazing, the US plays around in $10k to $50k ranges.
- simcup 2y agoout of curiosity: how much are you guys paying per month? i had, at that moment, 7 years of no accidents and the 9/1999 version of [1] and was at ~25euro/month [1] https://www.adac.de/rund-ums-fahrzeug/auto-kaufen-verkaufen/gebrauchtwagenkauf/gebrauchtwageninfos/details/58/renault-scenic-1996-2003/ https://www.adac.de/rund-ums-fahrzeug/auto-kaufen-verkaufen/...
- lotsofpulp 2y ago$50 per month for $500,000 of liability only insurance for 5,000 miles per year. Since it is only liability insurance, the type of car I have does not matter. I have 20 years of no accidents or insurance claims. I assume countries where healthcare is covered more extensively, such as Germany, have lower premiums? Although, I think Germany is health insurance covered healthcare, so I wonder if a German health insurance company would sue the auto insurer of an at fault driver to recover healthcare costs. In that case, it would be similar to the USA.
- simcup 2y ago
- IncreasePosts 2y agoThe incentive would be being able to pay very little to get coverage which insures you even for the circumstances where a safe driver would crash. Wouldn't a safe driver who was considering unwisely dropping coverage be more likely to drop coverage if coverage was expensive(because they are subsidizing unsafe drivers), as opposed to if it was cheap?
- edflsafoiewq 2y agoIt smooths the costs out over time, ie. you regularly pay a fixed amount instead of having random huge bills you may not be able to cover.
- 01HNNWZ0MV43FF 2y agoIf I can't have any privacy I'll shoot myself, which is a worse outcome for me
- IncreasePosts 2y agoI'm not justifying the specifics of your own car ratting you out behind your back, merely the idea of having more data would let insurance companies segment users based on driving habits.
- quantified 2y agoAs Eric Schmidt of Google noted long ago, your privacy is already dead. License plate readers are all over the place. Please don't shoot yourself, and good luck to you.
- 01HNNWZ0MV43FF 2y agoEric Schmidt can eat poop
- saagarjha 2y agoBecause of the obvious privacy implications, as well as the negative impact it has on the perception of driving. When you enable very precise insurance billing you get all sorts of weird behaviors like “I don’t want to drive through there because I’ll take a hit on my rate” or “slowing down to stop in a way people expect me to is consider a mark against me by the insurance provider, so I will do something surprising”. I think Tesla has (or used to have?) a “driving score” and it often incentivized bad driving that was locally “good” but bad in the context of everyone else on the road.
- kevin_thibedeau 2y agoTheir modeling will penalize safe drivers who have to deal with non ideal scenarios. The OBD2 accelerometer modules are a bad idea when you live in an area where traffic and road design requires bursts of acceleration to make turns. You're going to be lumped in with the bad drivers when the data is not comprehensive enough to separate good from bad. Nor will they put in the effort to ensure fair driver ratings with thorough analysis of the data they do have.
- lotsofpulp 2y agoRestricting insurers from using relevant data to calculate risk premiums is not the way to subsidize people who live in an area where traffic and road design are subpar. If there is an unfair situation that needs to be rectified with a subsidy, it is best for the subsidy to transparent to prevent corruption. For example, the knowledge of this subsidy can help propel political change to remedy road design so that some people are not driving in unsafe road designs.
- deleted 2y ago[deleted]
- kube-system 2y agoThis already happens (probably more accurately) via other metrics. If you live in an area with poorly designed roads that cause more claims, you will be charged more because of your zip code.
- BeFlatXIII 2y agoThat should also be illegal.
- muaytimbo 2y agoIn an efficient market safe drivers wouldn't be compelled to subsidize unsafe drivers.
- 0cf8612b2e1e 2y agoI pay for insurance to avoid the chance of catastrophic loss. No matter how safe I operate, an innocent accident (instigated by myself or another) could still lead to financial ruin.
- loeg 2y agoThis binary classification into safe and unsafe does not match the signal, which is incredibly noisy.
- Craighead 2y ago[dead]
- jordanb 2y agoFirstly, the entire port of insurance is to spread risk. If the the market for insurance is "too efficient" at determining who is high-risk and who is not, then it is no longer fulfilling its social function. Secondly, you seem to be implying that only aggressive drivers are getting flagged by the data. But the computer doesn't know if you accelerate and brake hard because you're an aggressive driver, or if your circumstances require it. Maybe you have to commute to your job in heavy stop-and-go traffic with difficult merges. Finally, this kind of surveillance changes behavior in ways that may make things less safe. If you're driving down a street and a ball bounces out from behind a parked car do you slam on your brakes out of fear that there is a child chasing after it, or do you think that hitting the brakes might make your premiums go up so you just hope that there isn't a child coming.
- kube-system 2y agoAlso, the surveillance is bad because of the inherent breach of privacy.
- pc86 2y agoI think these systems are bad and I think vehicle manufacturers piping data directly to insurance companies should be illegal whether you consent or not. That being said, "but privacy" has always struck me as a weird argument. There is no reasonable expectation of privacy when a vehicle with a particular license plate is at a particular intersection or on a particular public street. Some jurisdictions extend some privacy rights to whether or not a particular person is driving it but many don't. So when it's in public, the location of your car is not "private" information. How is acceleration, braking, or other engine telemetry data private?
- kube-system 2y agoThe right to privacy is not boolean. There is a spectrum of reasonable expectations of privacy. Also, the right to privacy in public is not necessarily zero. The varying degree of rights to privacy in public are less than in private settings, but often greater than zero. While your insurer may, by happenstance, see your license plate while you are driving around, they certainly are not following you 100% of the time. The degree to which your location is tracked when your license plate is plainly visible, is different than degree of privacy expectation when that location is being automatically recorded. > So when it's in public, the location of your car is not "private" information. It's just not that simple. It would be nice and convenient if "private" was a boolean value. But it is very much a float type: https://en.wikipedia.org/wiki/United_States_v._Jones_(2012) https://en.wikipedia.org/wiki/United_States_v._Jones_(2012)
- klyrs 2y ago> Safe drivers subsidize unsafe drivers and this subsidy can and should be reduced when possible with better predictive information. Okay, that's an interesting perspective, let's explore. A policy that can be unilaterally cancelled at any time, and forces you to put cameras in your car, could be the most efficient insurance ever. As long they manage to predict that you'll be in an accident in time to electronically cancel your policy, they'll never need to pay out more than refunding your premium.
- AbrahamParangi 2y agoCar insurance companies are already generally legally required to give notice in writing 30 days before cancelling your policy, even for material changes in risk. Let’s try to stick to the real world.
- klyrs 2y agoYou're the one proposing to change real world policies. I find it really interesting that I'm speaking directly from the libertarian playbook and the anti-insurance folks in the conversation are telling me to trust the government regulations. Especially when those very government regulations would be eviscerated by the proposed changes.
- AbrahamParangi 2y agoYou are unable to think precisely enough to have this conversation.
- ethagknight 2y agoInsurance premiums also fund salaries, bonuses, massive ad campaigns, high end office leases, and more. If we just had a simple common slush fund (like amongst a large family self-insuring), our insurance would be far cheaper. The data harvesting boosts profitability but does not necessarily equal lower premiums.
- lotsofpulp 2y ago>If we just had a simple common slush fund (like amongst a large family self-insuring), Like a mutual insurance company? https://en.wikipedia.org/wiki/Mutual_insurance https://en.wikipedia.org/wiki/Mutual_insurance >A mutual insurance company is an insurance company owned entirely by its policyholders. It is a form of consumers' co-operative. Any profits earned by a mutual insurance company are either retained within the company or rebated to policyholders in the form of dividend distributions or reduced future premiums.
- 01HNNWZ0MV43FF 2y agoThey can learn about my safety per mile from my odometer and my spotless driving record, not my real time location