In steering, an insurance company directs persons to specific garages or auto body shops when they make a claim for repair, U.S. Senator Richard Blumenthal (D-Connecticut) charged. Blumenthal thinks that steering is actually a safety risk.
“Allstate’s insurance pricing has become untethered from the rules of risk-based premiums and from the rule of law,” J. Robert Hunter, the CFA’s Director of Insurance charged in a press release.
The practice is called price optimization, and what it really means is that insurers single out those drivers willing to put up with high prices and charge them more. The software lets them spot which individuals aren’t going to switch policies.
A man named Bill Portz found this out the hard way, Lieber noted. Portz and his neighbor simply called his insurance company to ask if they had a claim after Portz’s truck hit his neighbor’s wall. Neither person filed a claim, but Portz’s premium went up by $200 a year.
Like health insurance, auto insurance is fast becoming a political issue that is attracting big money and political action committees. Auto insurers are increasingly spending big money to ensure favorable treatment from politicians and the courts.
Google is already making $110 million in advertising revenues from three auto insurance companies: GEICO, Progressive, and State Farm alone, TechCrunch noted. The potential profits from insurance will drive Google to improve its marriage of data and insurance.
Perhaps the only thing worse than getting into a car accident is having to deal with a personal injury attorney. Many of these litigators are highly dedicated professionals, but the horror stories you’ve heard about ambulance chasing shysters have more basis in reality than you might like to know
In other words, Walmart is targeting yet another fixture on Main Street, the insurance agency. The discount giant is also desperately trying to add new sources of revenue after its profits fell by nearly 25% in the last quarter of 2013.
The total value of auto insurance premiums issued in the United States in the third quarter of 2013 was $40.9 billion. That was an increase of a little over $1 billion from the same period in 2012 when the industry had $39.1 billion worth of premiums.