The PAID Act would cause car insurance premiums to SKYROCKET

Credit: www.congress.gov


This is not a political post, but rather an economic and financial one.

And please know that I have contempt for about 95 percent of elected things.

That said, there is a very dangerous bill in Congress known as the PAID Act. HR 1270, the Prohibit Auto Insurance Discrimination (PAID) Act, would be the Obamacare of automobile insurance. Just as the so-called Affordable Care Act made health insurance far more expensive than it already was by eliminating almost all underwriting criteria, the PAID Act would have a similar effect on auto insurance.

According to Independent Agent magazine, “this legislation would prohibit automobile insurance companies from using education, occupation, employment status, credit scores, previous insurer information, zip codes, census tracts, or homeownership status in insurance rating or underwriting decisions and give the Federal Trade Commission regulatory authority over some aspects of insurance underwriting.”

Insurance companies are not perfect, and I am not here to defend everything they do. However, their actuaries are like stockbrokers or sportswriters: they evaluate numerous factors in order to forecast outcomes. They don’t just spin out predictions about the hottest mutual funds for 2023 or the winner of the World Series without doing a detailed analysis.

Insurance companies are like any other business: they need to be profitable and price-competitive. Moreover, they are not bottomless money pits with infinite claim-paying resources. Underwriting criteria help them in all three areas. And when these criteria are verboten, they have no choice but to raise premiums dramatically because they don’t know very much about the risks they insure. And if they are not profitable, they can’t stay in business … so they can play claims.

This is what happened with health insurance.

The economics are just the same with car insurance.

Don’t fall for the PAID Act.

You can read the PAID Act yourself by clicking here. It's a fairly short bill.

 

Doug Newman
720-675-8119

30+ carriers ... 40+ states
Auto-home-commercial-group benefits

epsinsures@gmail.com - www.epsinsures.info

Powered by TAG Insurance and Xperience Benefits




Comments

Post a Comment

Popular posts from this blog

Five things every realtor and mortgage lender must know about insurance

Image
  Credit: www.clutchpoints.com This coming Sunday, the two best teams in the NFL, the Eagles and the Chiefs, face off in Super Bowl LVII. Football is the ultimate team sport. On a great team,  every player has a role and must strive for perfection in executing the duties associated with that role. A successful real estate transaction is quite similar: it is a team effort where everyone has a role and must strive for perfection in executing their respective duties. This includes the realtor, the mortgage lender, the insurance agent, the inspector, the appraiser, and the title professional.  With this in mind, there are five things every realtor and mortgage lender  must know  about insurance. This is not about making you an expert on insurance, but rather about enhancing the process of selling and buying a home. 1) It is imperative that the insurance agent  talk directly to the client . There are certain conversations that the agent needs to have with the ...
Read more

Important Insurance Update for Realtors and Mortgage Lenders

Image
Credit: www.capecodhrg.com  Please be advised of some  major changes in the insurance world. Waiting until the last minute to set up insurance is never a good idea, even in the best of times. However, because of recent changes in the insurance marketplace , please advise your clients to begin the insurance process  i mmediately after the house goes under contract. ·       Several carriers have suspended operations across entire states . ·       Other carriers are tightening their underwriting standards and adding additional binding requirements. ·       These things are  prolonging the insurance process. ·       Please take this into account when scheduling the closing process. I would advise you to  plan for the process to take a few extra days. If you or your clients have established relationships with insura...
Read more

What Do I Do If My Insurance Company Leaves My State?

Image
By Doug Newman A forest fire in Colorado and hurricane damage in Florida. (Photo credits below.) Like all industries, the insurance industry is in a constant state of flux. And over the last few years, economic trends and natural disasters have sent things into overdrive. Hurricanes in coastal areas from Texas to North Carolina, as well as fires in Colorado, California, and other states, have caused several carriers to either suspend or severely restrict new sales in several states. In Colorado, where I live, hailstorms have been a major contributor to this trend. The good news is that you can still get insurance. However, there are five very important things you need to know.   Find a good professional agent with whom to discuss your specific situation and who can make specific individual recommendations . NEVER leave this to the whims of a cell phone app or a call center. Preferably find an independent broker who can shop multiple carriers. Know that your new insurance...
Read more