Quote:
Originally Posted by Rich76_911s
Insurance companies on the other hand have calculated and lmited risk. They know all the probablilities and they continually raise prices. Then on the odd chance that they do have to pay for something they get a team of lawers and try to find any loophole to screw you. Yet not one Republican or Democrat has done a damn thing about it.
|
You really have no idea what you are talking about. I used to work in the actuary department at an insurance company (the people that set rates). Your post assumes all risks are static. They are not. Sometimes they change slowly, sometimes very, very rapidly. A different kind of car becoming popular or a new law or a new economic reality can influence people's behavior instantly. Rates are charged based on loss experience--what the insurance company actually paid out. They try to be proactive and charge adequate rates when they see risk going up, but most state regulators will not allow them to raise rates until they have proven the losses materialized--in other words, they have to lose money before they can raise prices. This means that most rates follow trends.
The simple answer is that rates go up when actual claims go up.