I get that some risks are fairly constant (e.g. theft), but premiums could be better correlated to actual risk.
Similarly, the cost savings from increasing my deductible just isn’t there. Going from $1000 to $2000 should be more savings than a handful of dollars per year, since that will save insureco on just about every single claim.
There’s no way they’re charging me $100+/month if my risk of a claim is 2-3% per year.
But insurers' models are complicated. One factor to consider here is that the population with $1000 deductibles isn't the same as the population with $2000 deductibles. For example, some of the latter group have a higher deductible because they're financially stable enough to afford a $2000 emergency expense, but others have it because they're financially unstable enough to need the cheapest coverage they can get. There's a strong negative correlation between an individual's financial stability and their risk to an insurer, so in net, it wouldn't surprise me if the latter group is riskier on average.
Also, even if raising your deductible reduces your expected claim costs by more than a handful of dollars per year, insurers in most of the US aren't required to pass that savings on to you - they can price coverage based on your willingness to pay (see [0] and [1]). On the bright side, auto insurance is arguably about the closest thing there is to a perfectly competitive market in the US - your insurer has lots of competitors, and if they're overcharging you relative to your risk, it's easy to find a better deal elsewhere.
[0] https://www.naic.org/cipr_topics/topic_price_optimization.ht...
[1] https://www.npr.org/2015/05/08/403598235/being-a-loyal-auto-...
Our government policy (Ontario Canada) is to ask insurers how to reduce premiums, then the government lets them reduce/cap benefits and premiums go up anyway.
It’s one of the many markets we would open to more competition. A lot of US insurers would salivate at our rates.
Which is more then enough because most of the insurance pricing is determined by sales and administration costs and not by price of risk itself.
But there is no way I would opt in for even MORE surveillance. I won't even let my wife install the google or amazon home automation devices. I hate what the internet has become.