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Male Teen Drivers

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Dassault Papillon
By Dassault Papillon | Aug 7 2015 6:16 AM
In the United States, having a male teen driver will cause his family's car insurance costs to skyrocket. A female teen driver will only increase it somewhat.
I can understand that male teens drivers are generally more likely to get into wrecks, but many are responsible drivers, while many adult/female teen drivers are horrible drivers.
I say that insurance should be blind and that there should be no abnormal increase in insurance cost until the accidents and traffic violations actually start happening to a person.
What's your opinion?
Voice
By Voice | Aug 7 2015 6:23 AM
Dassault Papillon: What I think:

Yes, there should be equality in all aspects of insurance. Also, I do not think that rates should increase after an accident. After all, you use insurance to help pay for accidents.
admin
By admin | Aug 7 2015 1:19 PM
Dassault Papillon: Insurance companies charge premiums on the basis of risk. Demographics may not be a perfect way to assess risk, but what else? I think demography is fair enough in this instance.
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Blackflag
By Blackflag | Aug 7 2015 1:46 PM
admin: Demographics may not be a perfect way to assess risk, but what else?
Drivers training score, or if you don't like that then nothing at all.
admin
By admin | Aug 7 2015 1:52 PM
Blackflag: Nothing at all is significantly worse at predicting risk than demography.

Driver training score is equally misleading, because a young person is unlikely to take the test drunk. However, young males are far more likely than any other group to drive drunk. Driver training scores simply don't measure risk-taking behavior, which insurance companies are in the unfortunate position of needing to predict.

It's like this: insurance companies could assume everyone is equally likely to engage in risk taking behaviour. As such, EVERYONE would pay the maximum premium, and everyone would be penalized for the irresponsible actions of a very few. There would be no problem with that, other than that people would pay a ton of money in insurance. To make it affordable, insurance companies lower the premiums for those they think won't pose so much of a risk. Which makes sense. They're just working off expected costs and profits.

It's not just for driving... probably the most obvious example here is life insurance. Smokers pay more. That's because the insurance company expects to have to pay out for them sooner, and thus lose the time value of money. Therefore they need to incorporate this into their premium. Some smokers do live ages despite smoking, but it's not the norm, so you can't blame the insurance company for covering their risk.
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Dassault Papillon
By Dassault Papillon | Aug 7 2015 2:01 PM
admin: I do not think that I would be a particularly skilled driver. However, it's extremely unlikely that I would ever drive drunk (and it's quite unlikely that I'll ever get drunk in general). Also, I would not drag race or text while driving.
I'd like to think that I wouldn't take noticeably greater risks than a female driver of my same age group. So why should I be charged with higher insurance than an 18 year old girl?

The only difference between myself and a 30 year old driver would be a much lesser amount of experience on my part.
Dassault Papillon
By Dassault Papillon | Aug 7 2015 2:03 PM
Honestly, though, if only I were born 10 years later I wouldn't even have to drive. They're developing autonomous cars now and by 2020 they'll have several models on the road.
admin
By admin | Aug 7 2015 2:05 PM
Dassault Papillon: That might be because you're an exception. Nobody's gonna admit to their agency "I intend to drive drunk", so the agency has to make an educated guess on who they trust. To do that, they use statistics. Are young males more likely to crash than young females? Apparently. Therefore, premiums are higher for that group.

You have to understand, the alternative is not lower premiums for you, it's higher premiums for the girls (and everyone else). The risk still needs to be managed by somebody, and if the insurer has no idea what their risk portfolio is, their only solution is to assume everyone is really dangerous.
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Dassault Papillon
By Dassault Papillon | Aug 7 2015 2:06 PM
Dassault Papillon: Though I do admit that I might get mad on the road and do something idiotic. But other than that...
admin
By admin | Aug 7 2015 2:06 PM
Dassault Papillon: This is true. I don't drive so I'm largely going off what I pick up from my dad's policy work at the AA.
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Dassault Papillon
By Dassault Papillon | Aug 7 2015 2:07 PM
admin: If it's higher premiums for the girls, what's wrong with that? A more equal distribution of what everyone has to pay is better.
admin
By admin | Aug 7 2015 2:10 PM
Dassault Papillon: What's wrong is that it's more unfair. Here you're not dealing with exceptions, here you're penalizing one group for the actions of another group.
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Blackflag
By Blackflag | Aug 7 2015 2:14 PM
Nothing at all is significantly worse at predicting risk than demography.
You are right, nothing is worse. Judging who is going to be a good driver and get good rates based on demographics just shows how eff'd up society has become.
Dassault Papillon
By Dassault Papillon | Aug 7 2015 4:14 PM
admin: Yes, but being "part of a group" doesn't mean that you are punished for what the other members of your group do even if you didn't do it. That's absolutely unfair.
admin
By admin | Aug 7 2015 5:43 PM
Blackflag: Nothing isn't the only thing that's worse. Your turn of phrase isn't really logically saying what you think it's saying.
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admin
By admin | Aug 7 2015 5:46 PM
Dassault Papillon: That's the nature of buying ANYTHING based on a future risk. If you buy bets on horses, you'll note that horses are priced differently - the gambling people are hedging against the risk of particular horses winning. You might think it's unfair that you pay more for your chosen horse just because everyone else liked that horse too, but that's just how risk-based products work.
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Blackflag
By Blackflag | Aug 7 2015 6:43 PM
admin: Maybe I misread something, but the OP is claiming that beginning drivers get different premium rates depending on their sex? If so, then I am pretty sure my statement fits.
admin
By admin | Aug 7 2015 6:46 PM
Blackflag: Nothing is also worse than ANYTHING positive, but that logically doesn't imply anything positive is bad. You could say nothing is worse than achieving world peace, or nothing is worse than fighting poverty, but that does not imply that nothing is the only thing worse, and therefore, that this positive thing is in fact negative.
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Blackflag
By Blackflag | Aug 7 2015 6:50 PM
admin: Myths of the 21st century post-modern liberal: Discrimination can be positive
admin
By admin | Aug 7 2015 6:57 PM
Blackflag: It can, but this clearly isn't discrimination.

If you were running a business painting houses for people, you wouldn't simply charge one price for any home. You'd charge based on how much work you expect the project to be. That's not discriminatory to large-home owners, that's simple economics. You get what you pay for. Why then is it so hard to imagine that an insurance company sets their premiums based on what they expect to pay out for any given cover? Older cars are likely to cost them more. Insecure cars will likely cost them more. And so on. That builds them their risk portfolio and allows them to set policies accordingly. There may be rare exceptions, like a house painter may under or overestimate the work required to paint a house, but they are what they are, exceptions. Insurance companies have a very good understanding by now of how to manage their risk and demography is simply the best tool they have for matching crash statistics to individual risk profiles. It's not discriminatory, that's just how costs work in any business transaction.
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