Auto insurance claims down, but rates aren’t

Auto insurance claims down, but rates aren’t

Drivers are making fewer auto crash claims to their insurers creating, dare I say, “windfall” profits. The insurers are baffled why the drop, especially since they do such sophisticated statistical models to predict claims and payouts. I’m baffled too, since we’ve been told over the past five years that we need to ban people from talking on cellphones because they cause so many accidents. Plus we’ve been told we need to ban all kinds of other technology from the car, too, like iPods and GPS and satellite radio and DVD players, because they’re also distracting, as is eating while driving and even talking to passengers. (Not sure if they’ll be able to ban that one.) Of course, teen drivers are causing a lot of accidents, we’re told, because, well, they’re teens. And then there are those massive SUVs which apparently cause accidents by being big behemoths no one can see around and take great anthropomorphized delight in crushing the puny sedans around them.

Yet, like I said, there aren’t more accidents, but fewer. Huh. Could it be that all those warnings in the mainstream media was all just a bunch of ratings-generating, ad-selling hype perpetrated by nanny-government activists and pandering politicians?

But Mr. Renwick said there’s no mistaking the buzz. Industry-wide, auto-collision claims fell from 6.91 claims per 100 insured vehicles in 2001 to 5.91 claims per 100 insured vehicles in 2005, according to the Property Casualty Insurers Assn. of America.

... In the past, insurers have seen claim filings rise and fall, but they’ve never seen such a protracted trend. And, unlike in past eras when improved margins led insurance companies to cut premium rates, rates today are falling only modestly, if at all.

Speaking of those “windfall” profits and premiums that aren’t coming down, since government actually sets those rates, at least here in Massachusetts, this is a case where politicians should intervene to end the gouging of the consumer. I would prefer a free-market system of competition among insurers, but absent that, the politicians should stop counting the donations from the auto-insurance industry’s lobbyists for a moment to give their constituents a break. Yeah right, I couldn’t keep a straight face while typing it.

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