#4, I wish the industry would share the data they say they have with the regulators (I don’t think they have, and they should — confidentially, of course).

#5, the ENTIRE drop in fataliites from 50,000 to about 42,000 can be attributed to lower alcohol involvement in the fatal accidents (1979’s 50K fatals were half alcohol-related, or 25K; 40% 2004’s 42K were, or 17K; difference is 8K, same as overall difference). That said, i believe the drop in BAC to .08 was overkill.

Items that raise “bogus” for me: age and deductible. Actuaries use these in setting rates. They know higher deductibles result in fewer claims, and they model that. I’m not sure what rating variables are allowed in most states, but if not age, length of driving record most certainly is used. I don’t drive now, but I’m pretty sure one’s age is on the insurance application.

As for low credit scores, insurance fraud is indeed a big risk — not necessarily people doing something as obviously illegal as faking thefts, but more in the “grey” area of ginning up the claims. The claims adjustor can prevent this, but when the claim is relatively small, generally they won’t look into it too deeply. Say you need to get new tires or something else that wasn’t actually damaged by the accident… that sort of thing.

That’s one way of thinking with the low credit scores. Another way is turn it on its head — what about people with great credit scores? They are assumed to be responsible people who take care of their possessions (or have money to waste). Paying bills on time is a sign of conscienciousness. That’s not to say they can’t be crappy drivers, but one assumes people with crappy credit may have trouble with being responsible. You don’t end up with bad credit by accident, that’s for sure.

I haven’t read all the latests posts in the P&C section of the Actuarial Outpost, but I’m thinking that the restrictions re: teen drivers and drunk-driving laws may be where most of the impact is coming from. The teen rates are really high, and if there’s something that keep them from driving in the riskier situations (with other teen passengers or late at night), that will cut down on the risk… but the actuaries should have the data as to who caused or were at least involved in accidents. They should see if there’s a difference between states with regards to law. It could be that this data is so new, that they’ve not had a chance to see where the real trends are coming from.

The one thing they don’t have data for is accidents where claims weren’t filed. I think you’ve hit onto something there.

Have you ever seen the belief that men cause more accidents updated for the modern world? In the past, many more men drove, ensuring that they would by shear chance. Is this still true? Also, even today, men dominate professions where driving is the sole or a large part of the jod description. I don’t believe that this descrimination should be allowed in the modern world. I didn’t make the rules, but shouldn’t we try to be consistant?

As to the adjuster and credit scores, stop me if I’m wrong, but I don’t think he or she gets to see them during the claims process. The scores come into play once the accident is settled and it’s time to determine what, if anything, will be done to the person’s premium.

It’s also true that an insurance adjuster’s primary job is to get out of paying claims, and any available excuse will be used, including the customer’s credit score.