worf928

puppycat

Interesting article, vintage 2008. It doesn't follow the money trail proving the claim of a direct monetary benefit back to GEICO. On the surface it seems like collusion where there is incentive to generate revenue thru rate increases. Troubling if true. Does it run afoul of any legal hurdles?

worf928

BSO

I have turned down the offer by State Farm to participate in their safe driving program by monitoring my driving through On-Star or mobile app in exchange for lower rates.

I'm sure they are have my best interests in mind in their use of the information gathered.

Penn4S

I have had Geico for close to 30 years. Never an issue and a rate that no other company could match. Don't know if the funding of Red Light cameras is real or not but would guess if they are doing so are the other big insurance companies. Or do you think they are more philanthropic.
I have received my share of tickets because I chose to take my chances and exercise the car a bit maybe a bit more than exercise. Have not ever received one following the speed limit. Did not get dropped by Geico or pay a big penalty for my actions.
As far as the Mechanical Breakdown clause I'll check to see if I have on all cars and if so I'll call and ask what it covers. I'll post what I learn.

Pep!RRRR

V999

This might be an unpopular position to take, but I don't really think I can fault car insurance companies for funding automotive law enforcement technology. Sure, it might be drumming up additional profits through increased premiums for unsafe driving. But insurance companies aren't holding a gun to our heads and telling us to exceed the speed limit. And I say this as someone who has exceeded the speed limit quite a bit.

For obvious reasons, the insurance companies want us to drive safely and slowly at all times. When we do that, it nominally decreases their risk of having to pay for damage incurred during an accident. If we're going to speed, we're increasing the risk to the insurance company. So they probably feel justified in funding measures aimed at slowing us down, while collecting additional funds when we're not driving safely.

I'm not happy about it. I don't like it. But I can understand it.

SH2

Noah Fect

Except the statistics don't say any such thing. Highway speed limits are almost universally underposted.

When they tell you it's not about the money... it's about the money.

worf928

Your logic results in a false conclusion because you are ignorant of the facts.

This---^

A long time ago in a political environment far, far away, it was proven time and time again that for any given stretch of road the safest speed limit was based upon the 85th percentile of observed vehicles.

This is the first google hit:

http://www.mikeontraffic.com/85th-pe...eed-explained/

In many places there are laws on the books that mandate traffic studies on new roads, periodically, or if significant changes to a road occur. By law it is these studies that are supposed to be used to set safe speed limits except for certain specific situations (e.g. school zones etc.) (That, btw, is one of the ways you can fight a ticket.)

Here's an article that essentially says: on average folks will drive at the speed they want to drive (which is in line with the theory of the 85th percentile) and that reducing speed limits has minimal effect on speed and just increases the number of tickets:

https://slate.com/news-and-politics/...accidents.html

In the mid-80s Texas did a speed study and determined that a 65+ mph speed limit resulted in fewer accidents per mile driven on interstate highways than 55 mph. This study was suppressed for more than a decade and only released as a result of a FOIA request and a law suit (IIRC.) And, it is, not surprisingly, seemingly impossible to find links to articles about it.

Highway and city speed limits are not set in a data-driven manner with the goal of safety. They are set because of 'feel good' reasons or pressure from folks that 'think cars are too fast' or, purely, for revenue generation.

The flip-side of ignoring science, data and human nature is that most drivers have now been 'trained' to ignore speed limits because they are bogus. Thus, we have folks always doing 10-over everywhere and not slowing through school zones. If you don't believe me spend one day in Massachusetts.

My theory is that if most speed limits were set through the application of data-driven science that folks would pay more attention to things like construction zones and school zones.

For example: Germany. Speed limits are rational. Most German drivers obey them. German road safety stats are way higher than the US.

The only thing that's true about higher speeds is that accidents are more severe. So, you have a choice, many more 'trivial' accidents or fewer more-severe accidents. The insurance companies MUCH prefer more trivial accidents and fewer severe accidents because they will make more money. (Just do the math on deductibles, raising rates due to claims, and pay outs.)

Auto Insurance companies have ZERO incentive to make driving safer. Their profits are effectively tax free and they get to raise rates to cover expenses and 'reasonable' profits. They cannot lose (except in MA and perhaps a few other states.) They want you to speed so that the Police departments they support with free speed measurement devices can write you tickets. They want you to have more trivial accidents so that they can raise your rates. They do NOT want severe accidents because those actually cost them money.

If Auto Insurance companies could lose and had any interest in making driving safer they would invest in real driver training programs.

worf928

saeyedoc

It's not the dollar amount per hour that I was referring to, it's the "book" that tells them how many hours they can charge for each item. The Porsche book may say it takes 3.5 hours to do something, where the general book only allows 2, you would be responsible for the 1.5 hours they don't cover.

Bud Taylor

So you make several assumptions below.

"Drumming up profits for unsafe driving" - There is no proof or data behind this statement. If you said raising premiums for people who have multiple accidents the statement would make more sense.
"the insurance companies want us to drive safely and slowly at all times. When we do that, it nominally decreases their risk of having to pay for damage" Again, this statement is not supported by data. fatal accidents (which cost the most to the insurance pool) occur at intersections disproportionately and are not determined by speed but differences in speed. Accidents termed as "failure to negotiate" are a very small percentage of higher level pay outs affecting the pool. Ill bet (no data) speeding is doubled or tripled by distracting driving but they have no reliable way to measure this yet unless cell records get taken to court.In addition, what Gieco is doing may be illegal under Sarbanes-Oxley by creating a market. I'm not a lawyer and don't play one on TV but it does not pass the sniff test. Oddly most local police chiefs do not like speed enforcement as it is a money loser when you figure in the salary, auto and other cost. State troopers are a different story.
Geico actually funded the development of the first laser gun, the LTI 20-20. They were subsequently nicknamed "Geico Guns".

The following info is from the SEC:
AGREEMENT WITH PLAZA RESOURCES COMPANY
In 1991, PRC loaned the Company a total of $950,000 to support the Company's development of the LTI 20-20/Marksman. Under the terms of the Promissory Note, Secured Note and Warrant Agreement, as amended (the "PRC Agreement"), the Company also issued to PRC warrants to purchase 356,250 shares of Common Stock at $3.00 per share and granted PRC certain royalties for a period of ten years on sales of the Marksman or related products. The PRC Agreement further provides that for a period of ten years PRC has the right to purchase in any consecutive twelve month period up to the lesser of 25% or one hundred (100) units of the finished product of the Marksman (or any other product line the function of which is to measure the speed of an object) at a cost per item determined by adding the cost of the raw materials for each item and the cost of the construction assembly of each item. PRC has agreed that any Marksman purchased shall be acquired only for donation by it to law enforcement agencies selected by it and shall not be resold for profit. The Company has been advised that the purpose of this arrangement to PRC and its parent, GEICO Corporation, the parent holding company of Government Employees Insurance Company ("GEICO"), a national automobile insurer, is to introduce the Marksman to law enforcement agencies as part of GEICO's continuing effort to promote automobile safety by reducing speeds on the nation's highways. Upon consummation of the Company's Public Offering, the Company paid to PRC the sum of $2,139,000 from the net proceeds for the repayment of the notes to PRC ("the PRC Loan"), plus interest accrued, in satisfaction of the PRC Loan and the extinguishment of certain royalty and other obligations owed to PRC under the PRC Agreement. The PRC Warrants (including registration rights therefor) and PRC's right to purchase the Marksman continue.

This might be an unpopular position to take, but I don't really think I can fault car insurance companies for funding automotive law enforcement technology. Sure, it might be drumming up additional profits through increased premiums for unsafe driving. But insurance companies aren't holding a gun to our heads and telling us to exceed the speed limit. And I say this as someone who has exceeded the speed limit quite a bit.

For obvious reasons, the insurance companies want us to drive safely and slowly at all times. When we do that, it nominally decreases their risk of having to pay for damage incurred during an accident. If we're going to speed, we're increasing the risk to the insurance company. So they probably feel justified in funding measures aimed at slowing us down, while collecting additional funds when we're not driving safely.

I'm not happy about it. I don't like it. But I can understand it.[/QUOTE]

SH2

I'm going to attempt to keep this thread on topic with regards to the MBI coverage offered by Geico. I've spoken to a number of representatives over the last 2 days requesting some additional information that didn't occur to me at first. Although Geico allows for the extended warranty repairs to be completed at a repair shop the insureds choice, there's no guaranty that Geico will pay dealership labor rates . They'll attempt to negotiate on your behalf however, it would be the customers responsibility to pay the difference if unsuccessful, this would be in addition to the $250 policy deductible. I also asked about surcharge penalties for filing an MBI claim clearly explaining this is not an accident or comp claim, just a simple filing for mechanical repair under their MBI endorsement. This is where they suddenly had difficulty with a straight answer. After placing me on repeated holds with them supposedly contacting the claims department, they finally came back and said it would depend on the amount paid out. In other words, a claim filed under the MBI could be treated in the same manner as other insurance claims ultimately, resulting in a surcharge to ones policy. No thanks Geico, this coverage appears to be nothing more than a scam.

MJBird993

I didn't chime in on all of the other negative things written about Geico, but I will share that I have heard of many people complaining about their claims experience with them.

It's more than just cheap rates. You want them there when it counts.

If we were all concerned about saving every little dime, we'd be driving a Toyota, not a Porsche.