8 vehicles earn "Superior" rating from IIHS for collision avoidance

[BrewfanGRB]

 

On that note, can you explain to me why the insurance rates go UP on my vehicles as they age? Seriously, they are worth less and should cost less to insure!

 

On the positive side, though, our new home we are building, which will be worth ~150% of our current home, will actually cost only 2/3 as much to insure as our current home. We get the 'new home' discount that phases out over 12 years.

 

I'd explain it, but I suspect Nick will conclude it's another part of the evil insurance company conspiracy.

[NickF1011]

 

Supposedly, it's not the event so much as the chain of events.

 

Say you have moderate braking, followed by high cornering, followed immediately by moderate acceleration, that would be considered aggressive. A moderate braking event in and of itself would not be classified as bad. It just lists them all on a map and you can see them all at once on a particular trip.

That makes a little more sense.

 

 

I'd explain it, but I suspect Nick will conclude it's another part of the evil insurance company conspiracy.

Not really a conspiracy to state that insurance companies are only looking out for themselves.

[RichardJensen]

 

I'd explain it, but I suspect Nick will conclude it's another part of the evil insurance company conspiracy.

 

Here's my objection, and I'm fairly sure that it's Nick's as well:

 

Disingenuousness.

 

Don't make all these noises about how you're looking out for *my* safety, when you are really looking out for *your* bottom line.

[jasonj80]

 

Here's my objection, and I'm fairly sure that it's Nick's as well:

 

Disingenuousness.

 

Don't make all these noises about how you're looking out for *my* safety, when you are really looking out for *your* bottom line.

 

Your safety and their bottom line are the same, you being safe means they have less to pay out in medical bills when you're in an accident.

[fordmantpw]

Your safety and their bottom line are the same, you being safe means they have less to pay out in medical bills when you're in an accident.

 

Oh, like those 5 MPH 'back this SUV into a pole' tests?

[jasonj80]

 

Oh, like those 5 MPH 'back this SUV into a pole' tests?

I wouldn't say that is for safety I would say thats savings for you in premiums, You don't think the rates on vehicles are different on if something is $200 to fix something vs $4000 to fix? Less damage and less chance of injury means cheaper rates. I don't understand why this is a hard concept for people to understand.

Edited June 3, 2014 by jasonj80

[fordmantpw]

I wouldn't say that is for safety I would say thats savings for you in premiums, You don't think the rates on vehicles are different on if something is $200 to fix something vs $4000 to fix? Less damage and less chance of injury means cheaper rates. I don't understand why this is a hard concept for people to understand.

 

Is it saving us in premiums or allowing them to charge higher premiums for those that cost more to repair? I get the concept, I just don't think that concept is applied as it should be.

 

So, going by that logic, going from a '03 Ford Escape to an '09 Ford Flex, which is much safer, should result in smaller premiums, correct? Well, the vehicle is worth more, so lets say equal premiums. Not the case! Our insurance went up 20-25% when we went from the Escape to the Flex. Also, cars are MUCH safer today than they were 20, 30, 40 years ago, but premiums have gone up past inflation (by my counts and personal experience...I haven't done any formal studies).

[RichardJensen]

Your safety and their bottom line are the same, you being safe means they have less to pay out in medical bills when you're in an accident.

 

And the local car dealer that sells cars for a reasonable price isn't ripping me off by charging me about the same as other dealers.

 

But his marketing spiel is that he's doing me a favor by turning a profit on me. I don't like it coming from bit players in the local business community and I don't like it when large businesses do it either.

 

And I especially don't like the way insurance companies are spending a fortune on marketing, given that people rarely change carriers, thus making their advertising efforts only nine percent more efficient than setting that money on fire in a parking lot: http://online.wsj.com/news/articles/SB10001424127887324610504578273663202877302

[akirby]

Airbags have increased safety but they've dramatically increased the repair costs of moderate collisions.

[jasonj80]

 

And the local car dealer that sells cars for a reasonable price isn't ripping me off by charging me about the same as other dealers.

 

 

If someone doesn't make a profit they have no money to spend, which ends up leading to the total collapse of the economy.

[RichardJensen]

If someone doesn't make a profit they have no money to spend, which ends up leading to the total collapse of the economy.

 

That's not my point.

 

 

This is my point:

 

Don't take my money and act like you're doing me a favor.

[fordmantpw]

 

That's not my point.

 

 

This is my point:

 

Don't take my money and act like you're doing me a favor.

 

Wait, I thought you were in the consulting field?

[BrewfanGRB]

 

That's not my point.

 

 

This is my point:

 

Don't take my money and act like you're doing me a favor.

 

There is absolutely nothing unique about this to insurance companies. Every company, including Ford, does it. I deal with it by being an adult. I control my money and I choose how, where, why and when to spend it. If others are influenced by advertising or other marketing, then that is their problem, not something for which to excoriate the company.

 

Now I need to hide, lest my bleeding heart liberal card gets taken away.

[BrewfanGRB]

 

Is it saving us in premiums or allowing them to charge higher premiums for those that cost more to repair? I get the concept, I just don't think that concept is applied as it should be.

 

I sincerely mean this as respectfully as possible: Pricing is FAR more complex than this (and I know you know this but the point is, it's not about "allowing them to charge higher premiums"--higher premiums are driven by higher loss costs). Put another way: Ford makes far higher margins on higher-priced products than lower-priced products (and yes, that's just making it simple). But insurance companies do not derive higher margins on higher premiums. It simply does not work that way. Also, premiums are always lagging indicators of costs.

Edited June 3, 2014 by BrewfanGRB

[fordmantpw]

 

I sincerely mean this as respectfully as possible: Pricing is FAR more complex than this (and I know you know this but the point is, it's not about "allowing them to charge higher premiums"--higher premiums are driven by higher loss costs). Put another way: Ford makes far higher margins on higher-priced products than lower-priced products (and yes, that's just making it simple). But insurance companies do not derive higher margins on higher premiums. It simply does not work that way. Also, premiums are always lagging indicators of costs.

 

I know, there are 1000's of different variables that go into pricing insurance. I've done some work on a ratings app for an insurance company years ago. I know I don't get the full story, and I'm fine with that. Doesn't mean I can't vent my frustrations about it though!

[RichardJensen]

 

Every company, including Ford, does it.

 

Ford is part of an industry organization that insists that its primary concern is *highway safety*, when its primary concern is minimizing insurer expense?

[BrewfanGRB]

x

Edited June 4, 2014 by BrewfanGRB

[BrewfanGRB]

 

Ford is part of an industry organization that insists that its primary concern is *highway safety*, when its primary concern is minimizing insurer expense?

 

 

For the record, if you look at what *I* replied to you on, with respect to what jp said, at that point, it was not about IIHS or the insurance industry (or didn't seem to be). It was profit in general. Then you gave your "don't take my money and make me feel like you did me a favor", thus MY response.

 

So you think Ford's own research into vehicle safety, development of new features (ala inflatable seat belts), is just millions and millions that they freely spend (above and beyond what would be needed simply to meet regulations) out of wondrous altruism and a pure interest in my safety? Or that perhaps, ROI metrics are applied to that spending and that it's used a differentiator in the market to extract higher margins and additional profit? And that when they advertise those features, and all the attention they give to making a car "safe for your family" it isn't to make you feel good about the purchase?

 

So I will say, YES, EVERY COMPANY, INCLUDING FORD, does things that are designed to make you spend money and make you feel like they did you a favor.

 

Also: Ford is part of any multitude of organizations that lobby with the sole goal of avoiding legislation or initiating legislation that reduces their expenses.

 

Lastly, I will reiterate what I've said before: If the consequence of me avoiding a collision and avoiding an injury is my insurer making a larger profit, I will make that trade-off every day of the week. A minor collision or a very minor injury might not be a huge deal, but it's certainly worth NOT having it happen at all if that can be done reasonably. I understand you don't think avoiding collisions and injuries is reasonable if that avoidance is only because an insurer sought profit. I don't agree with you.

 

I also understand that every dollar I spend, aside from charitable donations (and even that's not entirely true), generates a profit for someone. Assuming the receipient of this profit hasn't broken the law or operated in a grossly negligent manner, I couldn't care less about what they "say" or "do" to get me to spend that money. If I buy cheap t-shirts I know are made in Bangladesh, I'm accepting the risk that I could be funding child slave labor. You might argue, reasonably, the t-shirt maker just shouldn't do that. Well, *I* don't have to buy that t-shirt...and if no one did, the t-shirt maker would have no choice but to do more to absolutely assure me there was no child slave labor used or move production to a location I could implicitly trust didn't use child slave labor. If the t-shirt maker LIED about where the shirt was made (i.e., said it was made in America but actually made in Bangladesh) then yes, they are awful and I will hate them for it. But I won't hate them for making a shirt in Bangladesh or even using child slave labor (assuming it's legal) because they're only doing it because I'm buying the damn shirt.

Edited June 4, 2014 by BrewfanGRB

[RichardJensen]

 

 

I understand you don't think avoiding collisions and injuries is reasonable if that avoidance is only because an insurer sought profit.

 

Does Ford lobby for things in its own best interest? Yes. Does Ford then try to spin it as benefiting other people? Of course they do. Do I like it when they do stuff like this? Of course not.

 

But you know what? Everybody but politicians discount crap like that. Very few people believe that Ford is acting altruistically by lobbying for tax breaks for new investment.

 

On the other hand, you've got people who just can't stop talking about how the IIHS is doing *so* *much* to make us safer.

 

Bull crap.

 

Americans drive just under 3,000,000,000,000 miles per year. And over the course of that roughly three trillion miles, 35,000 people die in accidents. That is a ratio of about one person per every eighty million miles driven.

 

If IIHS lobbying is responsible for *halving* the rate of highway deaths, then they have reduced the highway fatality rate, per mile driven from .000000025 to .0000000125

 

Or, to put it in terms of driver years, that ratio went from .000375 fatalities per driver-year to .0001875 fatalities per driver-year to

 

But, to put it in dollars and cents, figuring a full $100k payout per death, you went from: $37.50 per driver-year to $18.25 per driver-year.

 

So, did we all get a lot safer thanks to the IIHS?

 

No. We did not. We were never, collectively, at that high of a risk.

 

But did insurance companies save a bundle?

 

They sure did.

 

 

-----

 

 

 

Now you can reply to this by saying, "What if it's you?" Or trying to personalize this discussion---talk about some friend or loved one or maybe even yourself, and how some IIHS lobbied something-or-another managed to save a life.

 

And that's all well and good. I'm not arguing that these are not life-saving initiatives.

 

But I know you're in the insurance industry, and I know you understand the law of large numbers, and that's how I look at this.

 

We, collectively, didn't get much safer, but the insurance companies managed to save billions over the last few decades.

 

------

 

And again, I know you're going to say, "Well, if it makes you safer, then its....."

 

And here's the response to that:

 

Let's imagine technology item X.

 

Technology item X will add $500 to the cost of every car, and will save 100 lives annually.

 

16 million cars sold annually, $500 per car, $8M in additional consumer expenditure to save 100 lives.

 

Great.

 

The insurance companies, will save, (again, assuming a $100k payout per fatality), $10,000,000 annually

 

Okay, so consumers are spending an extra $8M, insurance companies are saving $10M, and where is that $10M saved going?

 

Is it being returned to consumers in the form of lower premiums?

 

I think we all know the answer to that one.

 

------

 

 

 

 

And I haven't even *touched* on injury accidents.

 

 

 

 

 

So, yes, I think it is *incredibly* dishonest to pretend that these features are making us *significantly* safer, when they are doing *no* *such* *thing*.

 

---

 

And that's my side of it.

 

If you have an argument other than:

 

"It makes us safer." (because it doesn't really--again, trillions of miles driven, 35k deaths)

 

"It's worth the cost." (because it's not--new features are basically a tax on new car buyers and a cost savings for insurers)

 

"I know how I feel about my family" (because we both know that the law of large numbers makes that argument vanishingly irrelevant)

 

I'm happy to answer it. If it's one of those, well, I've already answered it.

Edited June 5, 2014 by RichardJensen

[fordmantpw]

Well said RJ! You've put down exactly what I was trying to say in a way that should be understandable by anyone who takes the time to read it.

[BrewfanGRB]

 

 

 

I've never pulled the "But what about the po' wittle children!?" line. I couldn't care less. That's someone else's problem. Not mine. I care about ME. I want morons who have no business driving to have less risk of smashing into ME and injuring ME.

 

Is your entire post correct? Absolutely. Did I know and understand all that? Yes, of course. My argument has never, ever been "If it just saves one life, it's worth whatever it costs." It's never, ever been that IIHS is altruistic and that its true first goal is safety. I absolutely know what its and the insurance companies' first goal is: PROFIT. (You know, just like I say about Ford whenever someone says "Ford needs to build a RWD whatever or Lincoln needs to do Y"). Profit is good. Profit gives me a paycheck.

 

Lastly, the only thing I will note that you did not consider (at least in the context of the post) is collision frequency and injuries. You looked solely at fatalities. And it's true, even though the risk of a vehicle crash fatality has been exponentially higher than the risk of a fatal plane crash, the real risk has never been very high. And that risk continues to drop for a variety of reasons, most of which do NOT have to do with safer vehicles, per se. But MY original point (if you go back and read it) was only ever about being involved in a collision (since we are talking about "collision avoidance technologies") and the injuries, even if minor, that result.

 

Collisions ARE relatively frequent and minor, even if simply irritating, injuries are not exactly commonplace but are far more frequent than fatalities. And those collisions and the injuries that result, DO have meaningful economic costs. Since reducing fatalities further in a meaningful way will be hard, reducing collisions because of those costs, is worthwhile.

Edited June 5, 2014 by BrewfanGRB

[RichardJensen]

That's a reasonably fair assessment. I can agree with much of that.

 

I'd like to distill my much longer objection to a single sentence:

 

If these safety improvements are a net drain on consumer pockets (in that the cost savings from reduced injury/fatality loss primarily stop with insurers, while consumers bear the cost of implementation), then I think that IIHS claims to be looking out for consumer interests should be greeted with more skepticism than they currently receive.

[jpd80]

I'm a strong believer in vehicles not getting into life endangering situations in the first place, perhaps that the reason why Richard's quoted statistics

on distance travelles versus fatalities is relevant. Regrettably, some fatalities will be unavoidable but the biggest gains come at the levels below,

reducing serious injury down to minor traffic crashes and on to near misses. That's where the biggest gains are possible with behavior modification.

 

Crash avoidance and education of drivers to read the traffic and road conditions are still paramount to reducing the road toll and serious injuries,

I think the US is now at the level where controlling risky behavior by either education or stronger regulatory surveillance are of greater use.

Edited June 7, 2014 by jpd80

[BrewfanGRB]

That's a reasonably fair assessment. I can agree with much of that.

 

I'd like to distill my much longer objection to a single sentence:

 

If these safety improvements are a net drain on consumer pockets (in that the cost savings from reduced injury/fatality loss primarily stop with insurers, while consumers bear the cost of implementation), then I think that IIHS claims to be looking out for consumer interests should be greeted with more skepticism than they currently receive.

 

I'd agree with that, as well. There should be more (or better) scrutiny of diminishing returns and whether we've reached that point. Personally, I think collision avoidance has to really be the last thing out there before the leap to driverless vehicles.

[akirby]

How many fatalities occur when the obviously unbelted occupants are thrown out of the vehicle while the ones who were belted are ok?

 

It irritates me when the news reports that a SUV left the road and 2 people were killed and say that "speed was a factor" when what really happened is an inattentive driver ran off the road while texting or doing something else and were ejected because they were not wearing seat belts.

 

We shouldn't spend big money trying to protect people who cause their own demise.