Bonkers EU insurance logic

[Dave2002]

I'm not very sure which side I favour on this issue. But I think it worth unpicking some of the assumptions about risk among men and women drivers. It is no doubt absolutely true that men have more accidents. But some of them do undertake more risk on behalf of society as a whole. There are more men than women among the ranks of delivery drivers, long-distance travelling salesmen, ditto lorry drivers, policemen, firemen etc who are compelled by work pressures to hare around the country at silly speeds. This is undertaken to provide cheaper services to women just as much as men. There is therefore at least some argument that women should bear the cost of such risk equally with men.

As somebody seems to have said, we are all in it together!

Insurance companies are in the business of supplying a service to mitigate risk depending on circumstances. Otherwise, why not have a reductio ad absurdum argument in which anyone can simply purchase universal insurance - say a one off payment - which covers any risk, any time, any place? Don't bother to take any data about known risk factors into account - wouldn't that be fair?

I agree absolutely that discrimination based on prejudice is undesirable, but I don't believe that it is necessarily discrimination to take into account known and (hopefully) reliable data when assessing risk for insurance purposes. The point about referring to the Female Cancer insurance in my original post is that it discriminates against me - though arguably I could try to purchase it - but I think at present I'm unlikely ever to receive a payout in the unlikely event that any insurance company actually provided me with such insurance.

[ahinton]

All this talk of insurance reminds me that I couldn't help but wonder, having not even had a scam call or other approach about PPI, whether I might be able to claim back the premium that I hadn't paid on a PPI policy for which I'd never applied but the documents for which I received via "ordinary" mail some time ago - not to mention whether or not or to what extent it might have been immoral of me to try - but that's not strictly on-topic, so let's return to that!

MrGG has already pointed out the perils of trying to obtain most kinds of insurance as a professional musician; mindful of this, I've always described myself for insurance purposes as a music archivist (which is not untrue) as I found some years ago to my astonishment that even the classification "composer" is quite a high risk one with most insurers (though not so high as for performers). Whilst I think that certain actuarial treatments can result in unfairness, there do have to be such discriminations in the field of insurance otherwise, as you suggest, the very notion of insurance would be largely undermined.

[Dave2002]

Surely since the enforcement of the "fair" equal treatment for female drivers, then insurance for male drivers should have gone down slightly.

[Rolmill]

For example, the LAPD had that sort of 'statistical analysis' when they were beating down Rodney King.

I don't see the relevance of this analogy - it confuses reaction to the past with prediction of the future. When the police arrest or restrain someone they do so (hopefully!) on the basis of an action already performed (or perhaps planned) by that person, otherwise they are abusing their powers - as in the Rodney King scandal. Insurance, though, is about trying to predict future trends on the basis of the best evidence obtainable, which is inevitably dominated by historical statistical analysis.

As a matter of interest, how else would you want insurance companies to price their offerings? Or to put it another way, what other factors should be prohibited from the risk analysis in your opinion? Age, address, occupation, claims history - all could be deemed discriminatory. But this stance would, as Dave2002 points out, eventually lead to universal, non risk-profiled standard costs - where everyone pays for everyone else's risk factors. Hardly seems fair.

[MrGongGong]

But this stance would, as Dave2002 points out, eventually lead to universal, non risk-profiled standard costs - where everyone pays for everyone else's risk factors. Hardly seems fair.

What on earth has "fair" got to do with it ?
As Ahinton points out, given that I don't drink and drive, don't take drugs why should I pay more when others who also describe themselves as "musicians" decide to do those things ? Everyone IS paying for everyone else ......... what substances mr Doherty decides to ingest is hardly related to the fact that we both happen to use electricity in the music we make ...... why is that "fair" ?

Insurance is a bit of a joke anyway, its something most of us sadly have to use BUT is often simply a way of some folks making huge amounts of money out of collective insecurity

[Dave2002]

I had forgotten that in some countries within the EU car insurance goes with the car, not the driver. I don't know how they work out what the premiums are going to be, but as far as I can remember the drivers, presumably assumed to be legally permitted to drive, are largely irrelevant. This was the situation in Sweden some time ago.

[Beef Oven]

As a matter of interest, how else would you want insurance companies to price their offerings?

Ok, I'll answer your question. Price determined by all relevant factors save for race and gender; with age being brought into the pipeline for the next step in non-discriminatory factors.

[Rolmill]

What on earth has "fair" got to do with it ?
As Ahinton points out, given that I don't drink and drive, don't take drugs why should I pay more when others who also describe themselves as "musicians" decide to do those things ? Everyone IS paying for everyone else ......... what substances mr Doherty decides to ingest is hardly related to the fact that we both happen to use electricity in the music we make ...... why is that "fair" ?

You (and ahinton) may be atypical of musicians, and therefore "dragged down" by your occupation in the insurance rankings - but that is because statements like "I don't drink & drive or take drugs" are unverifiable, whereas the insurance pay-outs associated with musicians as a group can be quantified. I don't see why the fact that the insurance industry's methods are imperfect should lead to the conclusion that all attempts to categorise applicants by risk factors are pointless or unfair; why should fairness be dismissed as an aspiration, just because it doesn't work for you in this instance?

[Beef Oven]

What on earth has "fair" got to do with it ?
As Ahinton points out, given that I don't drink and drive, don't take drugs why should I pay more when others who also describe themselves as "musicians" decide to do those things ? Everyone IS paying for everyone else ......... what substances mr Doherty decides to ingest is hardly related to the fact that we both happen to use electricity in the music we make ...... why is that "fair" ?

Insurance is a bit of a joke anyway, its something most of us sadly have to use BUT is often simply a way of some folks making huge amounts of money out of collective insecurity

Do you get a discount for being a boring-Volvo owner?

[Rolmill]

Ok, I'll answer your question. Price determined by all relevant factors save for race and gender; with age being brought into the pipeline for the next step in non-discriminatory factors.

I don't understand your comment about age I'm afraid - what do you mean by "the next step in non-discriminatory factors"?

Leaving that aside, you seem to be saying that:
1. Even if there is a verifiable link between gender/race and average insurance pay-out costs, it should be ignored because to acknowledge that link would be discriminatory.
2. Only race and gender should qualify for this treatment.

I disagree with 1, because I don't see that the anti-discrimination cause gains much from denying what is so; I accept, of course, that there may be disputes over the validity of the statistical analysis (as LMP pointed out earlier).

I think 2 is simply illogical - why only select these two factors for special treatment? House insurance is more expensive in some parts of the country than in others, why isn't that geographical discrimination? As I get older, eventually my car insurance costs will increase, irrespective of whether I remain a sensible, competent driver - isn't that age discrimination?

Anyway, I'm off to bed - can't believe I've spent part of the evening arguing about insurance....

[Beef Oven]

I don't understand your comment about age I'm afraid - what do you mean by "the next step in non-discriminatory factors"?

Leaving that aside, you seem to be saying that:
1. Even if there is a verifiable link between gender/race and average insurance pay-out costs, it should be ignored because to acknowledge that link would be discriminatory.
2. Only race and gender should qualify for this treatment.

I disagree with 1, because I don't see that the anti-discrimination cause gains much from denying what is so; I accept, of course, that there may be disputes over the validity of the statistical analysis (as LMP pointed out earlier).

I think 2 is simply illogical - why only select these two factors for special treatment? House insurance is more expensive in some parts of the country than in others, why isn't that geographical discrimination? As I get older, eventually my car insurance costs will increase, irrespective of whether I remain a sensible, competent driver - isn't that age discrimination?

Anyway, I'm off to bed - can't believe I've spent part of the evening arguing about insurance....

Pleasant dreams, and lock all lockable doors and windows, or your home insurance will not be valid.

[MrGongGong]

I don't see why the fact that the insurance industry's methods are imperfect should lead to the conclusion that all attempts to categorise applicants by risk factors are pointless or unfair; why should fairness be dismissed as an aspiration, just because it doesn't work for you in this instance?

For those of us who don't conform to the "norm" these kinds of things seem to never work in any instance !
Try being a self employed musician with a child who is a student and deal with student finance , try getting a mortgage and so on
but i'm not going to waste my life worrying about these things unduly
just that when the idea of "fairness" comes up in relation to insurance i'm reminded of Clarence

http://www.clarence.org.uk/index.html

This is NOT "fair" , ethical or anything else of the kind

[Rolmill]

For those of us who don't conform to the "norm" these kinds of things seem to never work in any instance !
Try being a self employed musician with a child who is a student and deal with student finance , try getting a mortgage and so on
but i'm not going to waste my life worrying about these things unduly
just that when the idea of "fairness" comes up in relation to insurance i'm reminded of Clarence

http://www.clarence.org.uk/index.html

This is NOT "fair" , ethical or anything else of the kind

I agree with all of this (especially re Clarence Adoo, a terrible situation notwithstanding his inspiring story); but, again, I don't believe that specific counter-examples (i.e. those outside the norm, as you put it) invalidate the general basis for offering insurance.

But I suspect we won't agree on this....so, drive carefully and don't forget to lock up when you leave the house.

[ahinton]

I agree with all of this (especially re Clarence Adoo, a terrible situation notwithstanding his inspiring story); but, again, I don't believe that specific counter-examples (i.e. those outside the norm, as you put it) invalidate the general basis for offering insurance.

But I suspect we won't agree on this....so, drive carefully and don't forget to lock up when you leave the house.

Whilst it is inconvenient that performers, be they musicians or otherwise, are considered high insurance risks and even composers are thought to be relatively high risk (and, as I mentioned, I have a way around that for myself), actuarial research and the calculations upon which they are based must either be accepted or formally challenged, so I do not see the insurance market as "discriminatory" in the sense in which that word is often used as a pejorative; as no two people are necessarily of the same risk for everything, one may as well take such an argument to an absurdist conclusion by observing that everyone's insurance rating "discriminates" against everyone else's.