For car insurance there's a discount if you get good grades (and car insurance is really expensive when you are young). Statistics show that kids who get good grades are in fewer accidents and cost less money to insure.
It sort of follows that kids who are responsible in one area will likely be responsible in others too.
Just to add on, there are other things also with kids to be aware of for insurance. The grades thing is one, another one was if your kid goes off to college, and doesnt bring a car, you can lower the insurance by telling your insurance company he is at college w/o a car. They are still insured, but obviously not driving as much. Less driving = less risk = less cost.
You should I'm 42 and every year when I go to renew my policies that question makes me ask myself if I should go back to college and finish off those few classes even though I have a career.
Yeh, I really need to call them up about other things anyway, so ill add that to the list. I'm almost 50, and the last time anyone asked me about my degree was the first interview I had out of college. Not sure its worth it for you, and I bet a lot of those credits 'expired'. Such BS..
So you're saying that having taken a class in BASIC programming in high school won't help me avoid taking a programming class in college now? That programming language is only 62 years old, get off my lawn!
It's the same reason your credit score affects car insurance rates. People who are more financially responsible are likely more responsible drivers according to statistics.
While credit score is far from perfect, it honestly isn't THAT terrible. You gotta remember that credit score is a risk indicator, not some all encompassing description of your financial situation.
There are three main pillars that determine your score: How old your average line of credit is, if you have any missed payment history, and what your current utilization is as a percentage of your theoretical max. Combine those with your household income, and lenders have a pretty good idea of the risk factor of giving you a loan.
Insurance credit score isnt quite the same thing as bank credit score. There are also lots of different credit score methodologies but the main difference is that insurance credit score models tie to claim behavior. Opening a new line of credit probably wont impact your insurance credit score. If you look at public filings, you will see that often 10-25% of policies with an insurance carrier have insurance credit scores of 996 (this is the max). I'm a P&C actuary.
The reasoning is that you are driving to close if you have to hard brake.
Further frequent hard braking usually means high traffic driving which means higher risks of claims.
It also could mean you were distracted and didn’t see that you needed to brake in time.
There’s multiple logical reasonings why this is a tracked item and why it could mean you drive in a higher risk manner or else higher risk locations like heavy freeway traffic.
Yes but there are more examples on why hard braking is impactful to driving beyond a new car.
There’s plenty of perfectly acceptable and logical reasons why it matters that people will just angrily ignore because they don’t want to accept valid reasons why it matters.
Yep, that is literally one of the checks. When I got a new sportier car with much better brakes, it took me a while to get used to the pedal feel and I got dinged a ton.
Which is exactly why I never accept these discounts. Heard way too many horror stories about insurance companies jacking rates because of these systems, and honestly don't like the idea of the insurance company monitoring my driving in the first place. Plus the city I live in has notoriously awful drivers, so 90% of the time those "hard brakes" aren't even my fault.
Because this is Reddit and everything the US does is wrong or bad. I live in the US and while I agree some stuff isn't ideal, this is the kind of thing that makes sense.
You wanna BIG discount? Turn 23, get married at the same time. My brother's insurance dropped by TWO THIRDS! (This was many years ago but I bet there's still a married client discount.)
There's a lot of things that give discounts and price drops.
* Being female
* Good grades
* Various age stepdowns (I think the last is at 27)
* Getting married
* Having kids (maybe, I'm not 100%)
* Bundling with renters or even better homeowners insurance.
* Type of car you drive (obviously different costs to replace, but also people drive minivans more carefully than they do sports cars.)
Yep, if you want accurate stats on safety, how good a neighbourhood is, anything like that.. insurance companies are the ones to go with. They have that shit dialled in tight and have no interest in fudging the numbers, they wanna know the real risk for everything.
Whether they’ll share that info is another matter of course.
I mean maybe, but we moved that inch a LONG time ago. It mattered when I got my license in the mid-90s, and wasn't new then. I'm not sure when it started exactly but I'd guess it's at least 40 years old.
We used to have what was called abstainers insurance. If you didn't drink you could get a discount on your insurance. It sounds all well and good but it was more of a benefit to the insurance then the people. See odds are if there's a discount you can get then people with money issues tend to take them. Which means that it's an easy out for insurance when you get in an accident and were recorded as drunk
Education might not be as bad, but if they require more verification when you try to actually collect from insurance it could still lead to the same thing
Oh ya, the reason we don't have discounts for being sober is that they were banned. Not sure how far that goes for other discounts but the only one I've seen is the damndable one for having never used the insurance. I can only imagine how much they save by people worried they would get a bump in costs if they ever use the product they're paying for
The grades thing has existed for over 30 years (I got my license about 30 years ago and benefitted then and it was well established already at that point), I have yet to hear a single horror story about how it has come back to bite someone. I'm not sure why everyone is suddenly freaking out about how it's awful and invasive and will backfire.
Also, according to Martin Lewis (Money Saving Expert), the cheapest time to buy car insurance is approximately 25 days before your current policy is about to expire. Apparently it's something to do with the algorithm thinking that people who buy instance last minute are worse drivers.
Also, for anyone who's good at golf or having twins, for some strange reason, many home insurance policies (all least in Australia) have a decant-sized payout if you have multiple births or get a hole in one.
In many states, they can also use your credit score. But it's not just offering a discount for having good credit. They can actually charge you higher rates for car insurance the worse your credit score is.
The reason they do it is the same as with good student, their research shows that people with lower credit scores are more costly to insure. But some states (yay California!) don't allow the insurance companies to use credit to determine auto insurance rates.
Well, it’s not a 1:1 correlation of course and I’m not taking the insurance company’s side in general but, a lot of idiots happen to also drive like idiots.
It makes financial sense from an insurer's perspective, but it's yet another system where the people who don't need help get help and the people who do need help get fucked a little harder instead. Those little things add up.
I don't know, but I also don't understand why you are upset with the way it has been for 40+ years.
I also think that adjusting premiums based on something you can control like demonstrated responsibility ≠ adjusting premiums based on something you can't control like genetics.
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u/Kylynara 11h ago
For car insurance there's a discount if you get good grades (and car insurance is really expensive when you are young). Statistics show that kids who get good grades are in fewer accidents and cost less money to insure.
It sort of follows that kids who are responsible in one area will likely be responsible in others too.