Insurance: What the Fr*ck!

[CruiserClass]

Time was they only OFFERED auto insurance to officers. Enlisted policies came later.
It’s a pretty low thing to do though.

Yup. I was still active duty when they changed it.

 

[TomDirt]

Dave Ramsey gets a lot of flack in some circles, and his advice is not great for the well-off top 10%. For the other 90% of adults in the US, they would be better off following his advice about getting out of debt, saving money, live within your means, etc. That's his audience.

He might sound a little corny, but there's a lot of common sense there too. Like whenever you walk into the bank, you notice they have nicer furniture than you do. When my mortgage is paid off, I will also stop paying for their furniture. I certainly use my credit card whenever I'm purchasing from someone I don't know, but I pay it off 2X a month, so interest isn't accumulating. Most adults in this country haven't truly been out of debt since they were teenagers and had no credit. That's another bad habit our grandparents didn't have. He mentioned how he walked into some local furniture business where they asked him what his FICO score was; (clearly they profit from finance more than from the furniture); he laughed and said "I haven't borrowed in decades".

 

[WNCHSTR96]

Dave Ramsey is great for people who don't want to actively manage their finances, are very risk averse, and/or have little financial self-control. This does come at a cost, however. I use a rewards credit card for everything, both for the rewards and for the fraud protection. I would not be able to travel as often or as comfortably without travel cards. Airline status, lounge memberships, baked in travel insurance, miles accumulated, etc. Easily saves me a few thousand bucks a year. I'm debt free other than a mortgage, which is foolish to pay off given the interest rate on the note vs the gains on the same money safely growing elsewhere. I'm too risk averse to leverage debt much beyond that, but everyone's financial tolerance is different and mine is about a 3.5 on a 1/10 scale.

Anywho, back to USAA:

Lawsuit accusing USAA of favoring military officers over enlistees certified as class-action case

The decision by a San Diego federal judge could affect up to 200,000 policyholders

www.sandiegouniontribune.com

It’s not the first time insurance has discriminated against certain people. Many, many, years ago Geico, Progressive, Allstate, and State Farm (and maybe a few others) were featured in an undercover investigation where the news team went to get insurance on something like a 2010 Honda Accord (something like that) and used people of different race and education. The difference in rates even though it was the same car in the same city was enough to start a serious investigation. They even noticed higher rates for people who made less money or who had the same job/salary but didn’t have a degree! Progressive and Geico were the biggest culprits, the major insurance companies like State Farm didn’t really discriminate as bad, but they all did in some way. Nowadays it seems more and more base on your zip code and make and model of vehicle as the prevalent factor. I was with State Farm forever but switched to USAA back in 2011. They are great but the rate hikes over the years have had me looking other places, the problem is everyone has higher rates now! I could save an hundred bucks but it’s not worth it to me to go insurance shopping every year. The whole system is a scam and we are being robbed in my opinion. What’s even more embarrassing is that I have only 2 vehicles (2012 & 2007) both paid off but am carrying full coverage! Talk about throwing away money! Old Dave Ramsey would be yelling at me!

 

[CVP33]

I’m sure that there is a causal relationship to low income, low credit score, low education correlating to higher accident rates. Same for elderly. Doesn’t necessarily mean it’s discrimination if there are correlating factors. We run a fleet of 350 tractor trailers. 10 years ago we installed LYTX due to a growing number of accidents. I can tell you that post Covid there has been a real, trackable increase in incidents. I can also tell you that the events where injury lawyers were involved and the income was declared as a reason for the lawsuit, lack of health insurance, lack of work etc.- since putting LYTX on we’ve had 30+ incidents, 10 lawyered up, all lost once we show in cab footage.

 

[fordrat]

I have for say what they call full coverage but that’s what it is if you ask the agent they will tell you what they refer to as full coverage anyway It has a lot to do with your age and where you live and drive mine cost me $191. Every month for my and my wife’s car (progressive)

 

[MDJAK]

It’s not the first time insurance has discriminated against certain people. Many, many, years ago Geico, Progressive, Allstate, and State Farm (and maybe a few others) were featured in an undercover investigation where the news team went to get insurance on something like a 2010 Honda Accord (something like that) and used people of different race and education. The difference in rates even though it was the same car in the same city was enough to start a serious investigation. They even noticed higher rates for people who made less money or who had the same job/salary but didn’t have a degree! Progressive and Geico were the biggest culprits, the major insurance companies like State Farm didn’t really discriminate as bad, but they all did in some way. Nowadays it seems more and more base on your zip code and make and model of vehicle as the prevalent factor. I was with State Farm forever but switched to USAA back in 2011. They are great but the rate hikes over the years have had me looking other places, the problem is everyone has higher rates now! I could save an hundred bucks but it’s not worth it to me to go insurance shopping every year. The whole system is a scam and we are being robbed in my opinion. What’s even more embarrassing is that I have only 2 vehicles (2012 & 2007) both paid off but am carrying full coverage! Talk about throwing away money! Old Dave Ramsey would be yelling at me!

While I don't doubt what you say, I'd be interested to know how Geico did that when they have never had agents to visit to my knowledge, and I've been with them for over 40 years, probably closer to 50. I've seen that happen with undercover people going to banks for mortgages, etc. It def sucks.

Now that my daughter has gotten into 3 accidents in the past 3 years, our insurance has gone through the roof. I checked State Farm, applied online. it came back that they don't insure one of my type vehicles. I can only assume it was the Cayenne. That, or being honest, which you have to be, about her accidents made us too risky for their taste.

I'm paying close to 6k a year for Raptor, Cayenne, and Highlander, 1k deductible, and full coverage, including rental.

 

[CruiserClass]

I’m sure that there is a causal relationship to low income, low credit score, low education correlating to higher accident rates. Same for elderly. Doesn’t necessarily mean it’s discrimination if there are correlating factors.

Is it discrimination, but discrimination is not inherently good or bad. It just means understanding the differences between choices and making a decision based on those metrics. Without getting in the weeds, I think most folks think 'oppression' when they here 'discrimination' without realizing that something as simple as taking cake when pie is also available is still discrimination despite having zero legal or ethical implications.

They can legally include your credit score as part of your risk assessment, with the idea that if you suck at financial decision making you probably suck at other decision making. If that's valid or not is irrelevant, the regulators bought it. I don't know if they can include education or income. At least not overtly. I'm sure they can figure it in as part of the zip code dynamic if they feel it's relevant and get the same effect over large numbers of clients even if a few get screwed harder than the others.

 

[CruiserClass]

He might sound a little corny, but there's a lot of common sense there too. Like whenever you walk into the bank, you notice they have nicer furniture than you do. When my mortgage is paid off, I will also stop paying for their furniture.

That's one of my biggest issues with Ramsey. I make more money by not paying off my mortgage then I would paying it off. If you're willing to save and invest, you'll almost certainly be richer in 30 years *not* paying it off. I could pay it off today if it benefited me to do so, but it doesn't.

Even on something as safe as FDIC insured savings, I've got a 2% spread on what I pay the bank vs what the bank pays me. Add in tax benefits (including property tax in my state, where I get a deduction for having a mortgage) and the spread is wider. I'm not sure who's buying who's furniture in that case. Some sort of secret Santa arrangement?

Now if instead of saving that money you'd put it in strippers, blow, and jetski rentals for the strippers while on the blow...pay off your mortgage.

 

[New recaros]

That's one of my biggest issues with Ramsey. I make more money by not paying off my mortgage then I would paying it off. If you're willing to save and invest, you'll almost certainly be richer in 30 years *not* paying it off. I could pay it off today if it benefited me to do so, but it doesn't.

Even on something as safe as FDIC insured savings, I've got a 2% spread on what I pay the bank vs what the bank pays me. Add in tax benefits (including property tax in my state, where I get a deduction for having a mortgage) and the spread is wider. I'm not sure who's buying who's furniture in that case. Some sort of secret Santa arrangement?

Now if instead of saving that money you'd put it in strippers, blow, and jetski rentals for the strippers while on the blow...pay off your mortgage.

The lowest a 30 year mortgage has be 30 years is 2.65%. That would mean you would have to be making 4.65% at you bank. No way, what FDIC Insured investment gets you a 2% spread?

 

[TomDirt]

Another advantage of paying off the mortgage is that you are no longer subject to the whims of insurance carriers. Many places are seeing ridiculous policy increases, especially Florida. I like the option to tell them You're Fired if I choose.