since when did corporations start being honest? financial statements don't really mean much - it's not a truthful and accurate picture of how much or where hundreds of millions of dollars are really flowing.

and no, to my own disappointment, i don't cheat or screwover any of these corporations. because it's the law. how convenient.

if you have the money to spare, why not save yourself potential future headaches and give em your real zipcode?

it's just money. peace.

 

I agree. I would rather be safe than sorry and just give the propper zip. However the insurance co's aren't loosing cash. Just because they loose money on claims doesnt mean they are loosing money overall. You said yourself that they gain money on investments and hedging strategies.

It's similar to saying that we should feel bad for the retail industry because they loose money when they stock up their store. Of course we know that they make money when the sell the stuff later. Overall the insurance industry is making money (except for the ones who go out of buisiness). Now, of course, just because an industry is turning a profit doesnt make it right to rip them off. So it all comes down to a question of ethics, and nobody on this board can help you with that.

 

[QUOTE=Intrepid175,Apr 27 2005, 08:42 PM] No offense, and maybe I'm just ignorant, but I'm not sure I'm buying this "poor ol insurance company, loosing their collective arses just to take care of ours" line!

I'm sure there are times when the profit/loss statement goes into the red zone but overall, in the long run, those guys are making money hand over fist.

 

I've heard of "losing" money, but I'm not sure what "loosing" money means. Is that when you take your money to an adult establishment?

 

Better?

 

hey i_heart_my_DB8

i think it's probably ok as short term strategy, but if you plan to permanently settle down, work and live down in So. Cal, you should change to local zip.

like are you renting? whose name is the lease under?
you work? what is the w9 address? how about 1040 filing address?
do you own your own place and claiming any tax benefit?

judge yourself carefully and make the decision.

 

When i finished writing this and read it that it is insurance 101....more than you might ever want to know....My experience and knowledge is applicable to Calif specifically, but some of it applies to other states.

Rest assured that carriers make money on what they sell at the rates they charge, including when fraud happens. they are in business to transfer and accept your risk for your payment of the premium, which is an estimate of their costs over the coming policy period. they have full time statistical staff(actuaries) to figure that stuff out to the "N"th degree and change rates all the time. They are in business to make money and they do, sometimes on rates and investments and sometimes just on investments.

What they provide in return is coverage, which you may or may not need. that has value and you will become aware of it should you end up having a loss that is covered. If you don't use the insurance, you have still had the coverage, it was there (used or not).

This transfer of risk for a premium payment is a basic underlying assumption of insurance . When fraud happens it just adds to the cost of everyones coverage....everyones.

It is human nature to try and beat the system for some...IRS,speed laws,parking laws,shoplifting, etc...included insurance fraud. Fraud costs are built into the system, again i think on the order of 30%, I have heard other statistics, but that one is an average.

Carriers do loose money, sometimes they leave a given marketplace due to that problem and sometimes they simply raise their rates. They all watch each other to see who does what...when, to remain competative.

Auto insurance in Calif is extreemly competative, mostly due to heavy regulation and current laws. Rates for exactly the same coverage do not vary more than 10% and if you have other coverage with that carrier you can save a little more (5-10%).

Change a coverage and you change the premium....many people exagerate their savings to justify their purchase....Service also varies as do contracts of insurance coverage....if you are saving money in a big way you are getting less.... that is an individual choice like who does your taxes, where you obtain your medical services, and what you have for dinner....all the same but cost vary.

There is always the example of the company that does not want to write a line of business...compare their rates and you will see they are not competative in that segment of the market.

Everything in Calif cost alot of money, thus insurance, gasoline, maintenance, the cost to repair or replace...etc... is tied in to that...as are insurance premiums.

Advice from agents varies as well, some care and some do not. Some have experience and some do not...there is alot of bull and rumors floating around too...Some sell and service and some just sell...and some are independent and some are company employees....representation is what you want...someone on your side. All company employees represent their boss first...so an independent agent might be a better choice, depending on your situation, as they represent the insured first...then the company.

There is alot of misinformation and rumor associated with insurance. losses are really beyond anyones control as they happen naturally. Fraud is more preventable/manageable as part of those expenses.

The insurance industry(company side) employs alot of bean counters and wiz kid MBA corporate types that manage it all...theyare not risk takers and not insurance people...in that sense of the word...not judgement is employed as far as underwriting...just statistics....based on bottom line.

In the end carriers take in the money of the many to pay the losses of the few, charge for that service and include a profit...that is called the "law of large numbers" on which insurance is based since the days of Lloyds Coffee House.

 

Well, I decided to do a little research myself, and it turns out that a study was done in MA a few years back and compared losses in that state against the national average. It turns out that for auto insurance, the loss ratio is 65% from 1996-2000. Obviously a little outdated, but the point remains. For every dollar in premiums received, they pay out 65 cents in claims. The most updated national average was in 2001 when auto insurers took in $129 million in premiums and paid out $93 million in losses, a ratio of 72%. They are still making plenty of money, if they weren't, they wouldn't be in business. Not sure what a 106.3 rating means, could be including more than auto insurance. Most companies aren't in the business of losing money. Shareholders tend to not like that too much.

 

If you knew what those numbers meant you would realize how awful they are. The loss ratio doesn't take any other expenses into account (i.e. overhead costs). Employees salary, buildings, claims vehicles and centers, costs of processing paperwork and endorsements, agents commissions, etc. Those are not included in your loss ratios. The 106.3 combined ratio I gave accounts for those things. They might have paid out 72 cents for every dollar on claims, but then they also had 34.3 cents per dollar worth of expeditures, which is where I come up with 106.3. Meaning they do lose 6.3 cents on every dollar.

 

Yes it's fraud.

If you ever get in an accident and you injure someone else, yourself or your car....once the adjuster finds out that you've been loop holeing the system to save a couple of bucks and that the car is not insured at the correct zip code......your screwed and you'll be paying out of pocket and dealing with a possible law suit from your insurance company...

It's not worth it if you ask me.

Better to live life within the limits of the law and have peace of mind than to live it on the edge and hope you die before the inevitable happens.

JMO