Relay-Version: version B 2.10 5/3/83; site utzoo.UUCP Posting-Version: version B 2.10 5/3/83; site packet.UUCP Path: utzoo!linus!philabs!seismo!hao!hplabs!hpda!fortune!amd70!packet!cfv From: cfv@packet.UUCP Newsgroups: net.wanted Subject: Re: GEICO auto insurance Message-ID: <230@packet.UUCP> Date: Sun, 19-Jun-83 19:56:10 EDT Article-I.D.: packet.230 Posted: Sun Jun 19 19:56:10 1983 Date-Received: Tue, 21-Jun-83 15:42:06 EDT References: <521@ihuxf.UUCP> Organization: PacketCable,Inc. Cupertino, CA. Lines: 43 Having worked for an insurance company for a while, let me add a little information into the supposed GEICO problem in New Jersey. The Insurance commission in New Jersey is an elected (and political) office. These are the people who set rates and policies for those who sell insurance in the state (For those that don't know it, insurance is regulated by the states, which means that an insurance company has to learn and keep track of 50 sets of rules, none of which have any relevance to any other set. They also have to work with 50 different commissions and set 50 different sets of rates. This, besides being real confusing, creates a LOT of legislative overhead that has to be passed along to the consumer. Another wonderful hidden cost of government). Anyway, in the mid 70's, the Insurance Commissioner in NJ decided to get re-elected. To do so, he started screaming about the unreasonable rates that insurance companies charge (blackmail and theft were among his vocabulary). He ram rodded through some rates that even in the 60's would have been seriously unreasonable. He also ram rodded through non-cancellation acts and other extremely non-competitive things (The non cancellation act meant that no matter how bad a driver you were, they couldn't cancel your insurance. Because of the other restrictions, they couldn't even raise your premium). The end result of this was that the bad drivers in New Jersey were being subsidized by all the drivers in the other states and by the profits of the insurance companies in the other states (BTW, if you look at the profit picture of the insurance companies, you will find that most of them LOSE money on their premiums. The place they make money is in the investment of the premium before they have to pay it out. Usually, an insurance company will consider an end profit of 3 or 4 CENTS per dollar good. Compare this to 10 cents on the dollar for supermarkets and see if they are stealing you blind). Rather than force the nation to subsidize the drivers of New Jersey, some insurance companies pulled out of New Jersey. We have GEICO home insurance. We are VERY happy with them. We have State Farm Auto insurance and the only reason that isn't GEICO is because my wifes family has been with SF so long that they are almost paying us to stay with them. They premium GEICO offered was about $50 a year less, but we had a sure thing. GIECO is a good company, and I can recommend them. Except in New Jersey. -- >From the dungeons of the Warlock: Chuck Von Rospach ucbvax!amd70!packet!cfv (chuqui@mit-mc) <- obsolete!