Updated: Federal Insurance Office Seeks Comments on Auto Insurance Affordability

By Andrew G. Simpson | April 17, 2014
Michael McRaith
Federal Insurance  Office Director

  • April 16, 2014 at 2:07 pm
    Comp Guy says:
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    This seems like further efforts to shift cost and responsibility as part of the grand shift the wealth movement. In California we have a low cost bare limits policy sold to the low income population. With limits around 10-15 thousand per policy all it does is make some of the populatin feel they have met there obligation to be insured. In reality the rest of us with any assets to protect have to pay for increased underinsured mothorist coverage to actually have protection.

    • April 16, 2014 at 3:55 pm
      Agent says:
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      In Texas where I am as well as in California, there are a lot of illegal aliens. These people have no idea what insurance is and almost never have it. They buy some old clunker for cash and then start driving. They invariably have at fault accidents. U/M comes into play all the time. Texas is a compulsory liability state, but there are a lot of uninsured motorists out there. One totaled my new car 5 years ago, no license, no insurance and my U/M claim was about $60,000 for BI & PD. I saw a sign on a Hispanic owned agency in town that proudly says – No license, no problem in both English and Spanish. HMM!

      • April 16, 2014 at 4:42 pm
        JR Insurance Guy says:
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        • April 16, 2014 at 5:49 pm
          Agent says:
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          How so JR? If any blue collar or low income driver can get a car, they should have to get insurance even if it is for minimum limits. We have companies operating that sell month to month policies which in my opinion should be banned since the insured gets it for the one month and it promptly lapses in the second month for non-payment. Meanwhile, they get their license renewed and car inspected so it looks legal. At the time of the accident, the insurance is long gone.

          • April 17, 2014 at 12:49 pm
            JR Insurance Guy says:
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          • April 21, 2014 at 11:02 am
            Whodathunkit? says:
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            J. R., are you suggesting the proper rating criteria for auto insurance is income, not probability of loss?

          • April 21, 2014 at 12:57 pm
            Agent says:
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            So JR, are you saying that low income/blue collar worker should not have to qualify for Auto Insurance by scoring, driving record, accidents, claims? Also, in an urban area, there are a lot more cars, congestion and more chance to have accidents and or claims. I agree that scoring should not be the dominant factor in pricing Auto and blue collar people should get a reasonable price if they have an otherwise good record, but urban areas almost always have higher rates than suburban or rural areas.

        • April 21, 2014 at 3:33 pm
          Trust me I am not a liberal says:
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          JR–it is idiotic, liberal thinking such as yours that has gotten this country to where it is now….and getting worse every day. You should be ashamed of yourself.

          • April 21, 2014 at 3:38 pm
            Libby says:
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            I think all he did was point out that illegal aliens driving without insurance was not the same as blue collar workers getting hosed on insurance premiums because they are low income. That was what the article is about, not illegals driving without insurance.

      • April 18, 2014 at 10:07 am
        SWFL Agent says:
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        • April 21, 2014 at 2:27 pm
          KY jw says:
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          You appear to be alone in your opinion. Although, with only a few dislikes it’s not a strong response. That’s actually very interesting. I’m rather ambivalent on this topic. I see your point, but I doubt it would achieve the goals you want. That’s just me though.

          • April 21, 2014 at 2:50 pm
            FFA says:
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            Not True JW. I was in the biz when Il passed mandatory insurance. Preferred Carrier rates jump in the first year. A whole bunch of fly by night carriers came to be. Took premium Never paid claims.

            I wish the Govt would just BUT OUT OF PRIVATE BIZ.

          • April 21, 2014 at 3:07 pm
            Agent says:
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            FFA, Texas has had compulsory Liability for many years, but there are still a lot of idiots running around uninsured or they will get it for a month or two and then lapse it. The end result is the Uninsured Motorist coverage rates taking a jump because so many claims are paid off of it. It is amazing that these U/M people seem to have the most at fault accidents. If I were running around without insurance, I would be more careful to not have an at fault. They don’t and constantly failed to yield or run a red light and plow into someone causing another U/M claim. I also try to sell higher limits on U/M since there is such an exposure and vehicles are often totaled and Medical is so expensive on a claim. GEICO, Farmers and Allstate continue to quote minimum limits on the coverage which is the height of stupidity. I guess they get into their E&O a lot.

          • April 21, 2014 at 3:46 pm
            FFA says:
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            With the Fly By Nights coming and going, there is a lot of stress on the Ill Guarantee Fund. Just cost the tax payer plenty of money.

          • April 22, 2014 at 5:58 pm
            Agent says:
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            FFA, the one that still gets me is the agency in my town that has a sign on their window – No License, No Credit, No Problem. Of course, they write those month to month policies that are no good if a claim happens, but they get plenty of Hispanics there along with low income entitlement people who need it for license, registration, inspection and then they are out of there.

        • April 21, 2014 at 4:40 pm
          Agent says:
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          Hey SW, customers still need to be educated on buying proper limits even if we think they are responsible. I have a customer who is very well off, owned a bunch of property and before I wrote him, he had minimum limits U/M and didn’t know it. After I pointed out the discrepancy on coverage and explained what could happen to him or his wife, he bought proper limits and an Umbrella.

  • April 16, 2014 at 2:21 pm
    Agent says:
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    More income inequality BS from the Feds. By all means, let’s do no underwriting to establish premiums for Auto Insurance. They could ask one question like Obamacare, do you smoke and then be granted a low premium and a subsidy so they could get it for free.

    • April 16, 2014 at 2:38 pm
      Deebs says:
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      Agree with your comment. Like the good doctor, on the hill, retorted in the ending of the movie “Bridge Over The River Kwai, “Insanity”

  • April 16, 2014 at 4:51 pm
    TX Agent says:
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    I agree with “Agent” comments entirely. As for the blue collar worker…he can afford his cigarettes, beer, cable TV, and $50 for the weekly UFC fight but he can’t afford his insurance. Heck, his kids get free lunches and he doesn’t pay anything in income tax.

  • April 16, 2014 at 5:52 pm
    FFA says:
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    Is this the end of credit scoring for car insurance? Or is this oBama AutoCare??? will premiums spike for the majority of people? will Carriers pound down commissions? Is this the beginning of the end for agents / Brokers????

    • April 21, 2014 at 11:42 am
      Agent says:
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      Hi FFA. I am sure you remember the days when Auto Insurance was priced on moving violations, accidents and claims experience. When credit scoring started to be used, it added another element to the structure. Now, many companies rate right down to the zip code the customer lives in. If they have poor experience in that zip code, the premium is higher. I can only imagine what the experience is in many of the inner city neighborhoods with all the crime, lack of coverage etc. Pulling clue reports with claims and violations as long as your arm will generally net out a high premium.

      • April 21, 2014 at 12:34 pm
        Ron says:
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        • April 21, 2014 at 2:56 pm
          FFA says:
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          Credit Scoring is Bull . It kicks a man when he is down.

          • April 21, 2014 at 3:34 pm
            Agent says:
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            I agree FFA. With as much job loss as there has been and very little job creation, the credit score has to take a hit with foreclosures, people behind in their bills all the time. I have asked many of my carriers if they would modify their scoring rating for people that are long time customers if there is no activity and the premiums are paid. Some have said they would take the highest score of the past 3 years. Of course, now Obama has been in there for 6 years so that theory went out the window.

        • April 21, 2014 at 3:48 pm
          Ron says:
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          • April 21, 2014 at 4:29 pm
            FFA says:
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            Blame goes where Blame belongs. I think it was Met that first started the practice. With a Federal Ins Commis appointed by Obama – with the guy being from IL, the next round of rate spikes will be on OBama minus weather related matters. What on earth is the guy thinking appointing someone from IL. We would be better off with Sebelious.

            None the less Ron, I am sure there is actuarial data to support Credit Scoring so my opinion is just that – my opinion. My Credit Score suffered due to an illness. Now my auto & home rates are going to go up because I have a pile of med bills. It just perpetuates the problem of digging my self out. I feel like I am being kick when I am down.

            And how much money would you like to wager they completely ignore Tort Reform? We all know Liability drives the rates. OBama ignored it with the PPACA. Logic stands to reason he will ignore it again. And one more time – A former Il Ins Commissioner???

          • April 21, 2014 at 4:30 pm
            Libby says:
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          • April 21, 2014 at 4:35 pm
            FFA says:
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            Hi Libby… I am in Illinois. There is no flexibility with anything on the personal lines side. To Bad. So Sad. Pay the increase or be cancelled. Since December, all my carriers have tightened their belts hard. One is saying that in June, they are rerunning all credit scores and taking the highest – no more grand father in the better score.

          • April 21, 2014 at 4:37 pm
            FFA says:
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            Libby, on a different note – Boston & Foghat are touring together. Saw them on Sat night. Rocked the house hard! Was worth the time & money.

          • April 21, 2014 at 4:50 pm
            Libby says:
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            Holy cow! Boston & Foghat! That sure brings back memories. I’m a Fool for the City!

            So your underwriters can’t give discretionary credits on personal lines?

          • April 21, 2014 at 4:55 pm
            Agent says:
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            Hey FFA. I take it you are not too happy with the choice of anyone from Il being an Insurance Commissioner. Why are we not surprised? They could have pardoned Blago and put him in charge and we would get about the same result. On a related article on today’s edition of IJ, the carriers are all making good money, but the rate hikes keep coming along and a lot of it is due to credit scoring which is fueling a lot of it. One of my carriers said there were about 30 tiers of pricing in their system and the computer assigns the premium the clients receive. Also, there is little, if any flexibility with Personal Lines underwriting like there is with Commercial. What you see is what you get. I have had several discussions with underwriting to mostly no avail. Meanwhile, we have the GEICO’s of the world promising $400 savings on nonstop advertising. Funny thing about those GEICO quotes. They tend to disappear when they run reports on the prospective clients.

          • April 21, 2014 at 5:14 pm
            Agent says:
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            Hey FFA. If you like your Auto Insurance, you can keep it. If you like your agent, you can keep him. Never mind if your rates go up. You will like your insurance once you find out what is in it. Isn’t that a great promise? Where have I seen something like that?

          • April 21, 2014 at 5:29 pm
            FFA says:
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            Libby, there has never been nor will there ever be any flexibility in Personal Lines pricing.

            If that show comes to town, put it on the list to do. Foghat did about a 15 min instrumental that shook the rafters. Both were doing new and old material. The new stuff was every bit as good as the new stuff.

            Agent – any one that is not from Il would be a better option. yes, even Blago would be. Say what you will about Blago – things got done. The hospital built with pay to play is a much better facility then was there to begin with. He got Open road Tolls done. Now under Quinn, there are two seasons – Winter & Road Construction. Sad – the gov that is in jail was a better option then Quinn..

          • April 22, 2014 at 8:31 am
            Libby says:
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            I’ll admit, I haven’t done personal lines since 1985. Don’t miss it, either.

          • April 22, 2014 at 9:01 am
            KY jw says:
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            Too bad about the pricing limits in IL. Strangely, we have a law on credit scoring in insurance (in Kentucky). If your credit was adversely affected by one of a list of problems, you can protest (is that the right word?) your score and the insurance company will adjust your score to a better rate (most of the time).

          • April 22, 2014 at 9:14 am
            Ron says:
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            KY jw,

            This applies to multiple states. If your insurance has been negatively impacted by certain conditions (military deployment, illness, divorce, etc.) you may request credit to not be used. In that case, the factor used based on that variable will be set to “1″ meaning no impact on premium.

            However, as I stated, less than 30% of people’s premiums are negatively impacted by their insurance score and more than 45% for whom this practice benefits.

            It sounds like our anti-government friends Agent and FFA want the government to step in to correct this terrible injustice. Typical Republican hypocrites.

          • April 22, 2014 at 1:41 pm
            FFA says:
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            Ron Says “t sounds like our anti-government friends Agent and FFA want the government to step in to correct this terrible injustice. Typical Republican hypocrites.”

            You been hanging around long enough to know that I advocate Govt Butting out Completely. You call other people reading comprehension into question. Maybe you should sharpen your skills. Just to be clear in plain English – I DO NOT WANT A FEDERAL INSURANCE COMMISSIONER. Especially one from Illinois. This state is a mess. And now one of the players that let it go to hell is in the federal position.

          • April 22, 2014 at 1:52 pm
            FFA says:
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            And to finish my post Ron, I am not so much anti govt as I am Anti Illinois Politician.

            4 years ago, I rated a Multi State Risk – IL, Missouri & Tenn. The Workers Comp Rate in Tenn was $8.00, Miss $12.00 and Il was $24.00. Is that the line of thinking you want in a Federal Position that has a direct impact on your business?

            Watching person after person get screwed by fly by night carriers – no doubt under this guys watch as its been going on at an increased pace since mandatory ins became law in IL – make me wonder if IL thinking is going to infect the entire country.

            Remember – Blind Faith in your leaders can get you killed. (BS aka The Boss)

          • April 22, 2014 at 2:18 pm
            Ron says:
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            FFA,

            I made no, zero, zilch, nada reference to a federal insurance commissioner. Where did that come from?

            I was referring to yours and Agents posts against credit-based insurance scoring.

            Are you for or against credit-based insurance scoring? That is a product of the free market that has been banned in some states by the government or modified in other states by the government.

            If my reading comprehension is correct, you are against credit-based insurance scoring. That equates to government intrusion into insurance.

            You know me well enough to know that I do not blindly follow anyone, especially any politician.

          • April 22, 2014 at 2:35 pm
            FFA says:
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            Reference to the Fed Ins Commis came from the article itself.

            I am against Credit Based rates. I am aware the free market brought it on. I referenced Met as being the one that brought it out. Met is not the Govt. The free market needs to do away with it. Some CEO somewhere along the lines is going to realize this and “Nitch” things out.

          • April 22, 2014 at 3:02 pm
            Ron says:
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            FFA,

            Do you honestly believe the free market will get rid of credit-based insurance scoring ? Insurance companies are not forced to use it and there are a small few who do not.

            If you have seen the statistics that I have indicating the predictability of credit-based insurance scoring and how it has increased profitability for insurance companies, you would know that only the government can stop or control the practice. I assure you it is no coincidence that over 90% of insurance companies use it where it is allowed.

          • April 22, 2014 at 3:27 pm
            FFA says:
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            Ron, I believe that Credit Scoring is here to stay.

            I believe that someone in a major player within the industry is going to figure out that just because someone has bad credit does not make them a bad driver and will have his/her R & D team come up with a “Test Product” to see how it flies.

            Current market conditions are screaming for it.

            As much as it pains me to say – I believe PPACA is here to stay. People gotta stop wasting the Supreme Courts time and resources costing joe tax payer more of their tax money. After all we need money to go bomb the Ukraine.

            I also believe the Govt on any level just dont give a damn about people other then themselves. The more Il politicians that invade DC, the worse you and I are.

            I also believe there is a .00000000000000000000000000000000000000000000000000001% chance the mylasian jet liner was abducted by Aliens. Until its found, you cant rule that out.

            Just my beliefs. I am too old for you to change my mind. I respect your right to have your opinion.

          • April 22, 2014 at 3:30 pm
            Destro says:
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            Man, I would love to see Boston live. I would have really loved to see them during their early years when they just started touring, but alas I was born in the 80′s and missed out on the music revolution of the late 60′s, the 70′s and early 80′s. Although I can’t be too downtrodden about that as I’ve been to countless live music shows from some of the most incredible bands around today that receive extremely little if any publicity.

            The best bands are the ones you don’t hear on the radio (that rule does not apply to classic rock).

          • April 22, 2014 at 4:02 pm
            FFA says:
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            Destro, if that line up comes to your town I would recommend it. Show was about three hours total. Was in a little 900 seat venue. Foreigner filmed their PBS show there about 18 months ago. They are coming back in September.

          • April 22, 2014 at 4:35 pm
            Libby says:
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            Check out their schedule here:

            http://calendar.boston.com/performers/show/10648-foghat

            FFA – Did you see them at the Acada?

          • April 22, 2014 at 5:32 pm
            FFA says:
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            Libby, yes. In that house. Its much closer to me then anything in Chicago. The Realto in Joliet is another fav of mine. There is also the Rosemont Theater thats a little bigger. But Caught – in the past – REO & John Cougar there. Missed Van the Man last year…
            At the Arcadia, I have seen Kansas, America (my wife choice), Bodeans, Eddie Money & Toto a few weeks back, Nazerath, and now the Boston / Foghat show. Believe it or not, Englebert Humperdink is on my list. Having an issue as I want to take my mom. No one from anywhere can tell me when the show will be over as I need travel time to get her back to the home before her curfew.

            Their variety goes on and on and on. They play no favorites on what type of music / entertainment comes in.

            Chicago Burbs are filled with these neat little venues. Arcadia seems to get their share. Hoping Nuge shows up there. 20 – 30 min drive is much better then the commute to Chicago. Never know whats hiding in the shadows.

      • April 21, 2014 at 6:00 pm
        FFA says:
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        Agent, I pre date CLUE… I was doing this before accident would show up on the MVR.

        • April 21, 2014 at 6:16 pm
          Agent says:
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          Me too FFA. We would ask the client about tickets and accidents and have them sign the app. Some time later when the MVR showed up, they had conveniently forgot about the moving violations and the accident they had so they got their price increase. If the incident was serious like a DUI, a cancellation was issued for failure to disclose. It didn’t happen often, but it is amazing how bad people’s memory of their driving history is.

        • April 22, 2014 at 10:55 am
          Agent says:
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          Hi FFA, did you notice that when we have a discussion on business, Ron has no hesitation to jump in and insult us. He thinks he knows the Personal Lines business for the whole country and how companies underwrite and operate and he has yet to submit a Personal Lines account to underwriting with any company or have to deal with a customer who has been adversely affected by a rate increase. I represent 5 standard companies not including Progressive (which is a different story for another day). We put identical info in on a customer and it is amazing the difference in the quotes since all of them have their own tier rating and weighting on score, tickets, accidents.

          • April 22, 2014 at 11:11 am
            Ron says:
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            Agent,

            As I mentioned in the past, I have worked as a personal lines producer, underwriter (for a national carrier), product manager (for a regional carrier – 9 states) and now a broker (with a national agency network). I know personal lines up and down, with the exception of claims, and I will make you look like a fool if you challenge me.

            Quote what I stated that is incorrect (not factual) and cite your source.

            In my experience, most (not all) agents have little to no understanding of underwriting and/or pricing. They are sales people, not insurance people. It is especially evident when the discussion of credit-based insurance scoring comes into play. If you cannot have the difficult conversations with your clients when they have rate increases now, why do you think credit-based insurancce scores should not be used. If you get rid of those, you will be too busy explaining rate increases to 70-75% of your book to sell anything. How would that be for your business?

            The reason you get different quotes is because they each have their own strategies for growth and target deomgraphics. Then they create their rating algorithms accordingly. Do you understand now?

            This is not the 1940s when you started your agency. I think it is time for you to retire and let somone who has a 21st century understanding of insurance take over.

          • April 22, 2014 at 1:58 pm
            FFA says:
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            Agent, He will get it figured out one of these days.
            If I could retire, I would. Over $17,000 in checks to the tax man this year alone. I get no say on how to spend that money.

            Workers Comp fraud been running unchecked in this state for decades including under this guys watch. No one at the DOI, IL has done a damn thing to stop it. Now he takes his plan to a national level.

          • April 22, 2014 at 3:35 pm
            Libby says:
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            Ron – you are right about most agents, and even underwriters, not knowing how to rate. It’s because it’s all done by computer now. For those of us that grew up back in the day when we manually rated, we understand what’s involved and can actually read a rating worksheet! It’s one of the first thing I teach my account managers. It’s imperative they understand rating if they want to successfully negotiate pricing.

        • April 22, 2014 at 4:45 pm
          Agent says:
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          Hey FFA, can you see Ron trying to explain target demographics or rating algorithims to a customer who got a large rate increase due to a falling credit score? By the way, rates did not jump 70-75% before credit score was used to rate Personal Auto. Rates have jumped because companies keep trying to build a better mouse trap and trying to write only the cream of the crop. Kemper is famous for narrowing their focus so much that only a perfect customer is acceptable to them. No wonder they have fallen so much in the past few years. There are no perfect customers out there, only customers that need our help.

          • April 23, 2014 at 8:14 am
            Ron says:
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            Agent,

            If you cannot explain a rate increase for any reason, GET OUT OF THE BUSINESS!! It is part of your job. You brag about how much money you make and the retirement you will have when you sell your agency. Stop complaining about the difficulties!! Nobody cares!!

            Unlike you, I know my limitations. I am a techincal, analytical insurance professional, NOT a salesperson. You are a salesperson and NOT a techincal, analytical insurance professional. You sell to people using simple languauge where I need to understand the complex, technical part of insurance.

            As much as I am aware that I would not be as successful an insurance agent as you are, you need to be aware that you would not be as successful as an underwriter or product manager as I have been. You are way too emotional.

            Where did I say anything about rates jumping 70-75%? You have got to have the worst reading comprehension of anyone I have encountered. I said, 70-75% of people either benefit or are unaffected by credit-based insurance scoring.

            Rates jump when losses and/or expenses jump, period. You really have no clue about how insurance works, do you?

          • April 24, 2014 at 10:06 am
            Agent says:
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            Ron, if you are not a salesperson, why did you proudly proclaim you were a successful producer? In your analytical brain, you would have a very difficult time trying to sell. Have you ever tried to sell using examples of what might happen if they didn’t have a certain coverage at the time of an accident? Customers don’t need a bunch of technical information and rating algorithims about their insurance to make up their mind. The customer just needs good information and putting their trust in the agent that they are properly covered for their exposure. It is no wonder you have removed yourself from dealing with real consumers. You don’t have the stomach for it.

          • April 24, 2014 at 2:24 pm
            Ron says:
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            Agent,

            Apparently you also need a lesson in tense.

            I WAS (past tense) a successful producer because I just gave the customer the standard word tracks to make the sale.
            I AM (present tense) much more analytical and technical to the point it would be difficult for me to sell because I would be underwriting the risk and asking so many questions the client would get up and leave.

            I do not have the stomach for sales, but you do not have the intelligence and deep insurance knowledge for underwriting, product management or brokering. It is all about knowing your strengths and weaknesses and leveraging them effectively. It looks like we both did that very well and are each sucessful.

    • April 21, 2014 at 5:38 pm
      Agent says:
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      FFA, I for one would like to see the statistics on how many Auto accidents were caused by inattentive driving, namely cell phone use and texting while driving. Carriers are picking up a lot of accidents due to cell use now. The cell addicts out there are a lot like alcoholics and say they can handle it, but can’t. The Marijuana crowd thinks the same way. Saw a story today of a man in Colorado that killed his wife after eating Marijuana candy got at the local legal shop. The wife was on the phone with the Police for 12 minutes and this guy just shot her in the head. He was totally out of it when he did her in. But we know that Marijuana only harms a young person’s brain, don’t we?

      • April 21, 2014 at 5:57 pm
        FFA says:
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        The kid that rammed my wife was admittedly on the cell phone. He admitted to the cop that this was his second Cell Phone Accident.

        I dont see nay marijuana caused accidents on the local police logs. Lots and lots of drunk drivers. Heroine & meth are often cited too.

        • April 22, 2014 at 10:17 am
          Agent says:
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          FFA, they don’t have to be smoking the weed at the time of the accident for it to be a factor. I wonder what would result if they did a blood test after the accident to see if a person was high, had impaired judgment etc.

          • April 22, 2014 at 10:47 am
            Libby says:
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            Agent. The weed expert. LOL!!!

          • April 22, 2014 at 10:56 am
            Ron says:
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            Sounds like we show also make cell phones illegal based on the number of fatalites caused by cell phone use while driving. We can also add alcohol, reading, makeup, eating, children and any other distraction that leads to accidents. We could have Agent’s utopia.

          • April 22, 2014 at 10:57 am
            Ron says:
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            Coorection: should also make…

          • April 22, 2014 at 1:53 pm
            KY jw says:
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            Don’t all police already do blood tests after accidents?

            I can remember working in a hospital when cops brought in people in handcuffs to have blood drawn for testing. I thought all law enforcement did that.

          • April 22, 2014 at 2:00 pm
            FFA says:
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            JW, It is optional in IL. If the offender says no, so be it. Police have to have just cause to ask that question. Weed stays in the blood for at least 30 days. So, you could smoke and have an accident 29 days later and still have it in your system.

          • April 22, 2014 at 2:37 pm
            FFA says:
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            Ron – Cell Phone Use by a driver in a car that is under power on the road is Illegal in IL.

        • April 24, 2014 at 10:01 am
          Agent says:
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          The guy that rammed me 8 years ago had no license, no insurance, a list of moving violations as long as your arm, accidents, along with warrants out for his arrest for drug violations, intent to distribute etc. It took up two pages to list them all. The rookie cop at the scene didn’t run him through the computer and let him go. This guy should have been taken to lock up, prosecuted and sent to prison. I just happened to be in the wrong place at the wrong time.

      • April 23, 2014 at 11:47 am
        Agent says:
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        Hey FFA, did you notice Ron’s post above? It is easy to see why he failed as a Producer and had to get a job in a Broker’s office. I have had to explain rate increases to insureds for 30 years and he has not had to do one and is ill equipped to do so since he doesn’t have the personality for it. He can hide behind his desk in his ivory tower and never have contact with a customer since the agent has to do it. I have dealt with Brokers like him sending me renewals with rate increases that were unjustified. I have had to ask them questions like- is this the best you have? Don’t you represent anyone else that will quote the risk? Sometimes they do and send an alternate quote that is better. They didn’t try until I objected thinking they could get by with the original quote. It never occurred to them that the customer might object and go somewhere else for coverage.

        • April 23, 2014 at 12:17 pm
          Ron says:
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          Agent,

          Wrong again!! I was a successful producer, but knew that I was limited unless I stated my own agency. I did not have the desire to do so. I have spoken to many insureds about rate increases and had no difficlulty doing so because of my insurance background.

          As an underwriter, retention is not the top goal, profitability is. The fact that you believe any renewal increase is not justified further supports my position that you know very little about insurance. It may be unjustified in your mind, but that does not make it so.

          Even as a broker I do have some contact with insureds, especially rate increases. It is our phone number, not the agent’s, on the policy since we have the contract with the company. Believe me, they call.

          Stop trying to make assertions about things you have zero knowledge. you know, me, my career, politics, economics, insurance, etc. Keep with what you know, how to be a boss and selling.

          • April 23, 2014 at 2:42 pm
            FFA says:
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            My explanation is rates go up because rates go up. Factors involved but not limited to the ridiculous jury awards and the snakes we call lawyers. Then I go one and on about the BS state we live in and how that state allows such bs to happen. Then I start to complain about my rates. Crack a joke or two and then get them laughing. Be sides Mr Insured, when do rates ever go down?

            It works for me.

          • April 24, 2014 at 9:56 am
            Agent says:
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            Wrong again Ron! There are no limits to how well a producer does except for the limitations you put on yourself. You obviously were in the wrong end of the business with your underwriting mentality and apparently didn’t like interacting with customers or developing new business. Tell me something, how do you have profitability if you don’t retain business? 100% of nothing is still nothing. I would think retention leads to profitability if it is done right. By the way, I don’t want my insureds calling a broker if at all possible since they may have to talk to someone like you.

          • April 24, 2014 at 2:32 pm
            Ron says:
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            Agent,

            There are limits when the agency owner is paying you a salary with production goals just to keep my job. Obviously I was in the wrong situation at the time, but it was my first insurance job and did not know how other producers were paid elsewhere. By the time I discovered how much I could have been making as a commissioned producer, I was making good money as an underwriter and had a family to support. I could not take a job without guaranteed income.

            Profitability comes from writing and retaining the right risks.

            Trust me, I cringe every time I speak to an agent like you as well. I prefer to speak with the insured because they do not act like they know what they are talking about and actually listen.

          • April 24, 2014 at 2:39 pm
            Ron says:
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            Agent,

            In addition, “There are no limits to how well a producer does except for the limitations you put on yourself”, is such a douche line. Can I make $10 million a year as a producer? If not, then there are limits. If so, please name one producer who makes that kind of money.

      • April 25, 2014 at 6:03 pm
        Agent says:
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        Correction Ron, you were never a successful producer because you don’t have the personality for it. Trust is very big in insurance sales and I cannot feature any potential customer buying anything from you since you are not worthy of trust.

    • April 22, 2014 at 12:20 pm
      Agent says:
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      FFA, a little off subject, but what do you think of the State of Illinois spending $100 million on the Obama Library as being introduced by your Speaker Madigan? The last time I checked, Illinois was in hock for about $100 Billion on their state Pension Plan and had $6 Billion in unpaid bills. Why doesn’t Obama use his private stash from the last campaign to fund his library or get his big donors to do it as other President’s have done? No problem, just raise the taxes on the citizens again to fund this.

      • April 22, 2014 at 2:01 pm
        FFA says:
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        Thats is a question many people in IL want answered. How do they justify that kind of expense when bills are not being paid.

        • April 22, 2014 at 3:27 pm
          Agent says:
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          FFA, I am sure you scratch your head wondering if there are “any” politicians in Illinois that have common sense about the dire state of finances in that state. Do they expect Obama to bail them out because he got his start there? Maybe that is the plan. Go belly up, ask for a bailout and then spend it on the library. I can see now what would be in the foyer. A replica of the Obamacare bill and the 20,000 pages of regulations. It would resemble the twin towers or at least the Sears tower.

          • April 23, 2014 at 2:43 pm
            FFA says:
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            On the news last night, they were talking about having the Dem Nat Convention in 2016 here. Stated a cost of $32mil for that.

          • April 24, 2014 at 3:39 pm
            Agent says:
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            Hey FFA, Congratulations to Chicago and the 100th anniversary of Wrigley field. Have you given up on the Cubs this year yet or is there still hope? The Rangers have righted the ship some and swept the A’s over the weekend so they are now in first place in the West.

            How about that Yankee pitcher getting caught with pine tar clearly visible on his neck and getting ejected? That is about the heighth of stupidity since just about anyone in the lower or upper deck could see it. I must admit, I haven’t ever seen a pitcher try that.

      • April 24, 2014 at 3:33 pm
        Agent says:
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        Ron, oh thee of little understanding. I have dozens of friends who have been very successful producers and I am including myself in that category. Instead of settling for a cubicle at a brokers office with a set salary, we were out there beating the bushes and bringing it in. There are highs and lows in selling and you do have to accept rejection well if a customer does not buy even if you have a better plan for him. However, if you can close 2 out of 3 times in this business, the highs far outweigh the lows. The best moments are getting the name on the bottom line and a check in your hand for a deposit or down payment. I fully funded myself in one year with commissions earned and never looked back. I made enough in 5 years to purchase the agency with my partner who had also done very well selling. I know this is a foreign concept for you as an underwriter or you wouldn’t have made the snotty remark about $10 million per year.

        • April 24, 2014 at 3:54 pm
          Ron says:
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          Agent,

          I am not exactly sure where you are going with this post. Congratulations on becoming a successful agent. I mean that sincerely. It just was not in the cards for me. I have built a successful career for myself from being an underwriter, then product manger and now as a broker. Can you not just recognize that people can be successful and hard working without owning a business or have a career as a producer?

          Not everyone is so driven by money as you. I just want to pay my bills, raise a family, then retire comfortably. I do not need nor desire a luxurious life.

        • April 25, 2014 at 10:07 am
          Libby says:
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          Agent – do you always have to be so condescending to those that didn’t make the same career choice as you did? If we did, we’d all be scratching and clawing for the same piece of business. It’s good that the world is diverse and we are not all the same. What a boring place it would be if that were the case.

          Embrace diversity instead of ridiculing it.

          • April 25, 2014 at 6:06 pm
            Agent says:
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            Libby, when a man insults me over and over, he does not deserve my respect. He lords it over everyone who does not have a CPCU and in my mind, that means Can’t Produce, Can’t Underwrite.

  • April 18, 2014 at 8:49 am
    lonestar says:
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    This is a very stupid thought process. This mentality is like saying we should lower new car prices by 50% because some people don’t have the money to buy a new car. Or, let’s make gas .50 cents a gallon for people that don’t have money to buy gas for their car. Come on people. Everyone has to pay to play. If you cannot afford gas or car insurance for your car, guess what: Don’t drive your car! It is time to stop the entitlement mentality. Plenty of hardworking people out there pay there own way. Don’t insult these people with more handout agenda. Okay, time to be disliked by the east coast and west coast people that think that government should do everything for those that don’t want to do for themselves.

    • April 21, 2014 at 11:15 am
      insGuy says:
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      It’s not just about money. It’s about lowering our standards so that everyone can participate. Why do think our school system barely makes the top 50 world wide. Let’s lower our standards, so every one can pass and so everyone can go to college.

      Also, the wealth shift isn’t to people of lower incomes. Dems & Repubs alike, regardless of what they say on election day shift the wealth to the people with power, and the people who GIVE THEM MONEY.

  • April 18, 2014 at 1:51 pm
    Jack33 says:
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    Don’t come to Michigan if you want to be able to afford anything. Our insurance rates are insane, due to outrageously high mandated medical coverage for auto accidents. Even with a perfect driving record, living in the safe suburbs and driving some some old econobox clunker, you will pay vastly higher rates than what you would pay on a fairly new SUV in a city-proper in other States…as in about 2x as much per month.

  • April 18, 2014 at 3:07 pm
    Juston Garland says:
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    Hidden due to low comment rating. Click here to see.

    • April 20, 2014 at 8:09 pm
      lonestar says:
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      Study after study has been done on credit scoring, particularly when it comes to helping determine a more attractive risk from a less attractive risk. And, these studies have confirmed beyond a doubt that there is a direct correlation between higher claims frequency and severity and people that do not run their financial households well. The facts are the facts. If someone is responsible in their finances, why should they pay the same insurance rate as someone who is not? Credit does not discriminate, no matter what the left leaning folks will lead you to believe.

    • April 22, 2014 at 6:13 pm
      Destro says:
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      You’re thinking is corrosive to the country.

  • April 21, 2014 at 9:17 am
    M P Bennett says:
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    The laws of my state require that I have my car inspected. I have not done so, and I am thereby subject to being fined.

    Clearly I am an underserved victim of the auto service industry. A federal study should be undertaken promptly to detemine why they continue to underserve me, and how they can be forced to fund subsidies to me for affordable mechanicing. I have a right to affordable mechanicing under the 1st and 14th Amendments. I demand affordable mechanicing.

    • April 23, 2014 at 4:48 pm
      Daniel says:
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      While your comment is obviously a “modest proposal,” and I see the sarcasm, one is free to reside or do business in a county and/or state that does not require inspections. Indiana, for example, outside of certain metro areas, has neither safety nor emissions inspections.

      Interestingly, lack of inspection does not seem to correlate strongly with higher accident rates nor with higher insurance premiums.

      The last I knew, MD did not require annual safety inspections, just an initial one if you titled an out of state used vehicle there.

      Obviously a complete failure to use any risk factors and standardize rates nationwide would be an utter failure, but I don’t think anyone at FIO is suggesting that. From the limited information, it seems they’d lean towards a variant of community rating. Setting aside the no fault states, this could (in theory) work, if it were done properly. Doing it properly is the hard part. Comprehensive should cost more in Detroit, because of the heightened risk of getting a bullet through your car. Collision should cost more in NYC, for obvious reasons.

      To be done properly, it would have to incorporate the community rating areas through which you frequently drive. If you live in the Poconos but commute across the GW into New York every day, there’s zero chance of profitability rating solely on the garaging location from that standpoint.

  • April 21, 2014 at 10:09 am
    James Libbe says:
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    The Federal Insurance Office headed by the former Illinois insurance commissioner is threatening to do to auto insurance what the Affordable Care Act has done for health insurance: lower the cost for those most likely to have accidents in order to get everyone insured and reduce the 14% of the driving population who refuse to get auto liability insurance. Unfortunately, this will involve raising the price for those who are good drivers and who are least likely to be involved in accidents. So, the Federal Insurance Office is attempting to get rid of risk-based pricing in order to achieve more compliance with state auto liability insurance laws. Unfortunately, the increased federal meddling in the health insurance market has now crept into the auto insurance market. The overriding theme is: make the more responsible (or in government speak, the more fortunate) pay more in order to lower the cost for the less responsible (or less fortunate) part of the population that causes an above average portion of the accidents.

  • April 21, 2014 at 11:08 am
    jack bailey says:
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    As an example. The rates in Detroit have not gone down. But in Michigan they have overall. So we are to ignore hot pockets and sell coverage at a discount knowing the overall book would lose money? I am confused. Since when do insurance companies need to be in business for fun, not profits? Since when does the federal government do anything correctly? They have screwed up healthcare now they want to screw up auto insurance?

  • April 21, 2014 at 11:31 am
    MD says:
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    Look at the list of states where affordability suffered – PIP states and states where plaintiff attorneys run wild and free – driving increased loss costs (i.e., higher premiums) to consumers. Government intervention ALWAYS kills competition and reduce competition ALWAYS results in higher prices (and profits thank you very much). Just look at CA profits over the past couple of decades. Also, look at the dismal failure (as in near complete lack of usage) of CA’s “low cost” auto policy for low income drivers.

  • June 12, 2014 at 11:34 am
    Stush says:
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    I sent an email to the FIO with my views on this. I said it seems that the FIO is trying to make a equivalence between health insurance and auto insurnance. The affordable care act is meant to have some sort of univeral coverage because it is about time we make sure that everyone who wants to be covered actually pays to participate. For too long my neighbor has been using the hospital as his primary care provider but pays nothing for the priviledge. Auto insurance however does not work like that: folks without a car do not participate in the collecting of benefits. No car, no coverage but also that means no “losses”. No health insurance does not prevent folks from collecting benefits for a “loss”, i.e., expecting and receiving medical treatment. Auto insurance is affordable, and companies file their actuarially determined rates to be a low as possible in order to compete. With health insurance the “loss pool” is every person in the country who gets sick or injured, coverage does not depend on whether you participated in paying the premium. but for auto insurance, the “loss pool” is limited to only those who pay to participate, those who own a car and operate it. My neighbor does not make claims for comp or collision or even auto liability because he doesn’t own a car. He is not expected to participate in the premium because he does not participate in the loss pool. The same cannot be said for his participation in the loss pool for medical treatment, yet he does not participate in the premium. I do not pay for his auto exposure but I do pay for his health exposure in higher premiums to cover his collecting benefits. FIO auto to know better but the guys in Congress and at the FIO are not sophisticated enough to know the difference between insurance and banking so they can’t make a distinction between health “insurance”, auto insurance or a Ponzi scheme!



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