Car Insurance Companies Increases their Premium Rates Based on Customers’ Details!

A recent investigation reveals the stunning truth: most Car Insurance Companies nowadays hike their premium rates based on their customers’ details such as your email address and even your name!

The Shocking Probe

The investigation uncovered some car insurances have hundreds of pounds added to their premium bills due to irrelevant and random data like the customer’s name, marital status, birthplace, and even the number of children you have! The investigators gave an example of one shocking case they discovered two inquiries about covers. Both car insurance coverage were identical, save for the customer’s surname which resulted in an astounding 1,300 British-pounds difference in their quotes!

The investigators claim car insurance firms use random data from previous customers’ applications as well as their processed claims to determine the premium rates for new applicants. This means that the insurance firms conduct a background check from past customers based on their names, email providers, domestic setups, and nationalities. If they determined that a particular name or nationality involved in more accidents than the others, then they’re most likely to increase the premium cost for new applicants.

The Different Insurance Quotes

The investigation took place when Supershoppers, a renowned consumer show on Channel 4, ran over hundreds of car insurance quotes. They gave the same set of answers to every question in different insurances except one thing: changing their applicants’ name. For example, they wrote David Ledwell as the applicant’s name in one insurance firm, while they wrote David Montgomery in the other one. The result? The latter name was quoted more than 1,369 pounds compared to the application bearing Montgomery’s name.

Meanwhile, an insurance inquiry made by the name of Ahmed Khan received more than 462 pounds compared to David Smith. They also noticed how the insurance quotes changed when they indicated the number of children they have. In one case, they get charged for an extra 146 pounds to their insurance quotes for having one child. While the other insurance quote charged a single parent an astounding 267 pounds.

A Data-Driven Insurance Industry

Flaxman further revealed that there’s nothing unusual to the techniques implemented by the car insurance providers. He explained further that the data collected by insurance providers from their past customers, as well as the claims they processed, undergo a series of studies and assessments.

The management then will decide what to do with the data they collected. For example, if they discovered an evidenced record that an insurance client with four children is more or less prone to accidents compared to people with 1-2 children, then there’s no stopping them to increase their premium rates for the former case. Meanwhile, the Association of British Insurers states the providers decide their premium rates based on different factors, especially those that make a customer more prone to accidents.

The Association further revealed that the insurance providers’ different methods in determining their premiums contribute to a competitive market for the insurance industry. That’s why they also encourage the people to always shop around, canvas as many insurance companies as you want to get the best deal that works for you. They also warned people to be wary of companies or comparison sites that operate in the same manner as the show Supershoppers had just uncovered.

The Association emphasized that genuine insurance customers wouldn’t tweak their personal information just to get a quote. If they do (and the site permits it), they may run into verification problems later on when they processed their claims. Or worse, this may trigger some scam or fraud alerts.