Thank you to all the idiots....

themann1984 · 03-03-2011, 06:38 PM

Insurance ratemaking 101:

Imagine a piece of paper floating in the air at an angle with the lowest point in a corner. Let the x and y axis represent two variables. Lets say credit score and driver age. As your credit improves the paper decreases in height. As your age increases the paper decreases in height. The height of the paper at a particular point represents how much you pay in premium based on these two variables.

Your rates (height of the paper) can change for any or all of the following 3 reasons:
1. The paper stays the same shape but raises in height off the ground.
2. The paper stays the same height on average but the shape of the paper changes. Perhaps it becomes steeper or it is made wavy or something.
3. The paper stays the same height and shape but your location on it changes.

Insurance rates are like this but they use something more like 20 to 30 variables. If you can visualize a 30 dimensional plane let me know. Every company has their own paper that can be completely different than the others. Thus, the only thing you can do is shop around and compare rates.

And making comparisons between other people is kind of meaningless. The reason being is that you know nothing about their company's piece of paper and where you would be placed relative to them.

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
OMFG!!! Idiots... Dent my rear quarter.	Milenko2121	Detailing / Washing / Waxing / Cosmetic Maintenance and Repair	12	08-20-2010 01:22 AM
Idiots on Youtube	tooohip	Mid-Atlantic Region	10	06-03-2010 02:39 PM
I hate idiots.	whoady4shoady	Nissan 370Z General Discussions	3	09-24-2009 07:27 PM

03-03-2011, 06:38 PM	#10 (permalink)
themann1984 Base Member Join Date: Apr 2009 Location: Overland Park, KS Posts: 100 Drives: 09 370Z Yellow M6 Rep Power: 18	Insurance ratemaking 101: Imagine a piece of paper floating in the air at an angle with the lowest point in a corner. Let the x and y axis represent two variables. Lets say credit score and driver age. As your credit improves the paper decreases in height. As your age increases the paper decreases in height. The height of the paper at a particular point represents how much you pay in premium based on these two variables. Your rates (height of the paper) can change for any or all of the following 3 reasons: 1. The paper stays the same shape but raises in height off the ground. 2. The paper stays the same height on average but the shape of the paper changes. Perhaps it becomes steeper or it is made wavy or something. 3. The paper stays the same height and shape but your location on it changes. Insurance rates are like this but they use something more like 20 to 30 variables. If you can visualize a 30 dimensional plane let me know. Every company has their own paper that can be completely different than the others. Thus, the only thing you can do is shop around and compare rates. And making comparisons between other people is kind of meaningless. The reason being is that you know nothing about their company's piece of paper and where you would be placed relative to them.