quote:

Originally posted by eROs.au Insurance companies charge a person a different rate from someone else because of a difference in sex or age. Do you think this is ethically ok? Hypothetically, if it was proven that black people cause more accidents and cost the insurance companies more than other races, would it be "ok" to charge them more insurance? If not, what is the difference between discriminating sex or age, and race? /finish rant from a young male

Well what exactly is the alternative?

Suppose they charged everyone the same rate. In that case, people in statistically low-risk groups would be paying a much higher rate, in order to pay for the costs incurred by the high-risk groups. But, if this is the case, the benefits of insurance for those in the low-risk groups are going to necessarily be quite low relative to the costs. So any intelligent low-risk individual is going to react by getting the lowest possible amount of insurance, or none at all.

When they do, the current rates will no longer pay for the expenses of the insurance company (and profit), so they will have to raise rates considerably across the board. Then, even more people will be at a poor cost/benefit ratio, and will opt out to the extent that they can, while others may not be able to afford it even if they wanted it. So you end up with most people uninsured, and those who are insured paying just about as much as the most expensive rates now.

Since the logical outcome of discrimination is better even for those discriminated against than the outcome of no discrimination, I believe such discrimination is ethically warranted to the extent that it is supported by valid statistical evidence, regardless of the particular criterion being used to discriminate.

Nope, and you're right, it's discrimination.

Until you get in an access/get a ticket/whatever, you should have a clean slate. I guess the problem is that you're working backwards from the start: you're younger and have less experience when you begin driving, and thus there is a higher chance that something might happen. However, that doesn't mean shit, and it doesn't mean you should be held liable for this stereotype, even if it's true.

Basically, insurance companies are some of the craftiest corporations, and often have the local governments in their pocket.

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Originally posted by DJ Shibby Nope, and you're right, it's discrimination. Until you get in an access/get a ticket/whatever, you should have a clean slate. I guess the problem is that you're working backwards from the start: you're younger and have less experience when you begin driving, and thus there is a higher chance that something might happen. However, that doesn't mean shit, and it doesn't mean you should be held liable for this stereotype, even if it's true. Basically, insurance companies are some of the craftiest corporations, and often have the local governments in their pocket.

Why don't you put yourself in the shoes of these companies? After all, they are a business and are there to make money. It's unfair, but at the same time, when inexperience drivers get into big accidents, these insurance companies have to pay the money to buy a new car, or even fix the big damages.

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Vernato

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Originally posted by Arbiter ...is supported by valid statistical evidence, regardless of the particular criterion being used to discriminate.

That's pretty much the answer right there.

All I can say is, been there, done that, good luck and purchase your vehicle wisely based on said statistics or have your wallet ready.

___________________
"...End? No, the journey doesn't end here. Death is just another path...one that we all must take.
The grey rain-curtain of this world rolls back, and all change to silver glass...and then you see it...
...white shores...and beyond...the far green country under a swift sunrise."

quote:

Originally posted by eROs.au Insurance companies charge a person a different rate from someone else because of a difference in sex or age. Do you think this is ethically ok? Hypothetically, if it was proven that black people cause more accidents and cost the insurance companies more than other races, would it be "ok" to charge them more insurance? If not, what is the difference between discriminating sex or age, and race? /finish rant from a young male

Car insuragnce usually goes by age,sex and location and it's all very discriminatory. As for race, maybe there is some numbers behind that however I think that whites are more likely to get drunk, drive and crash than blacks and asians . This is maybe stereotype but if true insurnce companies might be discriminatory against whites.

Alright, time for your friendly neighbourhood Chartered Insurance Professional to step in.... (the below was already posted in the core... sorry for the repeat)...

Your insurance premium is essentially a function of your RISK RATING multipled by the total amount of insurance.

RISK RATING is a number assigned to you that represents the likelihood that you will suffer a loss or be liable for someone else's loss that will require the insurer to pay claims. The RISK RATING is an actuarial calculation based on a number of weighted factors both statistical and individual. In nearly all North American jurisdictions the following factors are considered:
- Age (statistical)
- Sex (statistical)
- Marital status (statistical)
- Territory/where you reside (statistical)
- Vehicle class, make, model (statistical)
- Annual mileage (statistical)
- Use - business/personal/leisure/etc (statistical)
- Claims history - last 4 years (individual)
- Driving record - last 5-10 years depending on jurisdiction (individual)
- Insurance history - last 6-10 years (individual)
- Claims/driving/insurance history of other listed drivers (individual)
The formula to used to arrive at the RISK RATING is perscribed by legislation in all North American jurisdictions and depends on the state/province.

This risk rating is then multiplied by the total amount of insurance requested in each area of coverage (collision, comprehensive, liability, accident benefits/personal injury protection, uninsured motorist, unidentified motorist). The total amount of coverage is the limit of coverage for each area of coverage less the deductible for same. Additional amounts are then charged for any endorsements (additional coverages) you request, usually at a flat rate per coverage, ie: $20 for loss of use, $50 for waiver of depreciation, etc.

The colour of your vehicle, lease vs. finance, or amount of airbags are not factors in determining premium. The make and model of your vehicle can be factors in determining your premium with regard to theft coverage as some vehicles are more frequently stolen. The price (list price new) affects your collision and comprehensive premium in as much as more expensive vehicles must be insured for a higher amount.

Finally, to answer the race question... to the best of my knowledge - all North American jurisdictions have legislation that prevents insurers from asking the race of applicants on their application for insurance. As such, the insurance industry can neither track statistics or charge premium based on race.

*** disclaimer - the above applies to North America only.

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Originally posted by RickyM you're just a shit version of Moral Hazard. At least he knows what he's talking about.

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Originally posted by pkcRAISTLIN lol, i love it when moral feels the need to lay the smack down

Would you sell a one-million dollar life insurance policy to a 90 year old for the same price as a 18 year old? Hell no you wouldn't! Otherwise, your company would be bankrupt within a week.

Statistics don't lie, and it is perfectly logical and justified to discriminate based on group statistics.

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Originally posted by Capitalizt Statistics don't lie, and it is perfectly logical and justified to discriminate based on group statistics.

Exactly, and if there's a coorelation where young, white males statistically have more drunk-driving charges than other races then it's not discriminatory, it's just fact.

___________________
"...End? No, the journey doesn't end here. Death is just another path...one that we all must take.
The grey rain-curtain of this world rolls back, and all change to silver glass...and then you see it...
...white shores...and beyond...the far green country under a swift sunrise."

Insurance policies are priced according to their calculated risk. Smokers are charged more than non-smokers for health insurance because there are more inherent health risks associated with smokers. Older people are charged more than younger people because statistics show that they are generally more costly to insure. While there may be some cheating here and there, as a general rule the price of the policy is supported by volumes of pages of actuarial statistical information. You're barking up the wrong tree.