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A comment on Why car insurance in America is too cheap. Parent comment

Re:Why car insurance in America is too cheap by BMc2020 on Saturday February 03, 2024 @05:02PM (#39245201)
As for those refunds, Californians are still waiting for about $3.5 billion of the $5.5 billion that Consumer Watchdog estimates policyholders are owed for pandemic-era overcharges.

The matter still hasn’t been fully resolved, say the state’s insurance officials, who argue that rate hike decisions aren’t interfering with unfulfilled rebates.

“These are separate processes,” said Michael Soller

Don't forget fraud isn't covered in econ 101.

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Re:Why car insurance in America is too cheap by kristjansson on Saturday February 03, 2024 @05:57PM (#39245627)
TBF, that’s overcharged in a very insurance-specific sense, not a mustache-twirling fraud sense. Effectively they didn’t adjust prices fast enough to the actual changes in risk, which on the whole seems like something best dealt with ex post, not ex ante.
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Re:Why car insurance in America is too cheap by sangnoir on Saturday February 03, 2024 @08:35PM (#39246651)
> Effectively they didn’t adjust prices fast enough to the actual changes in risk, which on the whole seems like something best dealt with ex post, not ex ante.

If the insurers could have it their way, they wouldn't have to adjust at all (for overcharging), while avoiding undercharging ahead of time. Oversight is necessary to counter misaligned incentives.

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Re:Why car insurance in America is too cheap by kristjansson on Sunday February 04, 2024 @09:18PM (#39256560)
Right, this is a reasonable compromise between stability/profitability of risk-buyers and fair pricing for risk-sellers. Prices are unconstrained at transaction, but outsized profits can be clawed back.

The point is no part of this is _fraud_.

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Re:Why car insurance in America is too cheap by sokoloff on Sunday February 04, 2024 @03:39AM (#39248641)
How would they adjust prices for policies already sold and used, in the event the price for those policies was too low? Issuing refunds after the fact works in a way that issuing bills does not.
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Re:Why car insurance in America is too cheap by Ferret7446 on Saturday February 03, 2024 @07:28PM (#39246213)
It is, it is just an adjustment in the cost of business (either positive or negative depending on whether it's coming from the business or the customer).
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