I find it quite ironic that Commissioner Watters wants “driving history” to be given more weight in setting auto rates while at the same time administratively prohibiting the use of credit scoring, which is a significantly better predictor of losses than driving history. I suspect she does not really understand the process.
How could anyone in their right mind sya that rates in MI are “excessive” with the financial info included at the end of the article:
“According to the reports, 98 percent of every auto insurance premium dollar in 2001 was used to pay claim losses. For homeowners insurance, carriers spent 109 percent of each premium dollar on claims that same year. Premiums for homeowners insurance have been exceeded by the sum of losses and expenses in Michigan each year from 1995 through 2001.”
So the industry barely covers its losses on auto (not considering commissions and underwriting expenses) and can not cover its losses on homeowners…and that makes rates excessive???
A google search about State Farms profit showed an article (published 2/28/04) in the Wall St. Journal which stated the company made $2.8 BILLION in 2003. So there is a descrepancy with this article.
How can that much profit be made and nearly every dollar going to claims? Granted, state farm may have faired better than the industry overall, but not by that much. I just chose them since that is my company. I am very angry with the system. (now straying from the article) It is one thing to cause an accident/not be insured/and not pay for damage but to make it a crime not to contribute to excessive profits, is wrong. A story (www.sooeveningnews.com, police and fire) on 4/13 said a man was jailed solely for no proof of insurance. Just because it is a law does not make it fair. Insurance companies can charge whatever they want. Just because there is competition does not mean profits are minimal. If they all charge more, then all will be reasonably competitive with each other. If it is a law, then the profit allowed should be regulated. Start by capping the salary of the c.e.o. If this sounds like communist thinking, then the law at present reminds much of some communist countries where daily life deals with unfair and unjust payoffs to police just to go about business as usual. I have a clean record, agent says doesn\’t matter what I drive or how much I drive (already at min. level) and it is over $300 for 6 mos. of the minimum coverage the state requires. Live in a rural area, lucky to make $7/hr. If I ever win lottery, it won\’t be the material things that make it great. It will be the peace of mind that at least I did not work long and hard for the money I am forced to give to the insurance company, contributing to billions in profit.
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DUH!!!!!
I find it quite ironic that Commissioner Watters wants “driving history” to be given more weight in setting auto rates while at the same time administratively prohibiting the use of credit scoring, which is a significantly better predictor of losses than driving history. I suspect she does not really understand the process.
How could anyone in their right mind sya that rates in MI are “excessive” with the financial info included at the end of the article:
“According to the reports, 98 percent of every auto insurance premium dollar in 2001 was used to pay claim losses. For homeowners insurance, carriers spent 109 percent of each premium dollar on claims that same year. Premiums for homeowners insurance have been exceeded by the sum of losses and expenses in Michigan each year from 1995 through 2001.”
So the industry barely covers its losses on auto (not considering commissions and underwriting expenses) and can not cover its losses on homeowners…and that makes rates excessive???
A google search about State Farms profit showed an article (published 2/28/04) in the Wall St. Journal which stated the company made $2.8 BILLION in 2003. So there is a descrepancy with this article.
How can that much profit be made and nearly every dollar going to claims? Granted, state farm may have faired better than the industry overall, but not by that much. I just chose them since that is my company. I am very angry with the system. (now straying from the article) It is one thing to cause an accident/not be insured/and not pay for damage but to make it a crime not to contribute to excessive profits, is wrong. A story (www.sooeveningnews.com, police and fire) on 4/13 said a man was jailed solely for no proof of insurance. Just because it is a law does not make it fair. Insurance companies can charge whatever they want. Just because there is competition does not mean profits are minimal. If they all charge more, then all will be reasonably competitive with each other. If it is a law, then the profit allowed should be regulated. Start by capping the salary of the c.e.o. If this sounds like communist thinking, then the law at present reminds much of some communist countries where daily life deals with unfair and unjust payoffs to police just to go about business as usual. I have a clean record, agent says doesn\’t matter what I drive or how much I drive (already at min. level) and it is over $300 for 6 mos. of the minimum coverage the state requires. Live in a rural area, lucky to make $7/hr. If I ever win lottery, it won\’t be the material things that make it great. It will be the peace of mind that at least I did not work long and hard for the money I am forced to give to the insurance company, contributing to billions in profit.