I made a comment above but maybe you’re able to answer it. I moved to a walkable city, returned my car at the end of it’s lease, then didn’t need insurance anymore. If I get a car again in a few years, will my rates be higher because of the lapse?

No room to reply above, so I’ll continue here. Unlike Geico and Progressive, State Farm has other products to cross-sell. This, in addition to the fact that they are a mutual rather than a public company, informs their interest in volume of policies as being a higher priority than attracting only the best, most profitable risks. They are interested in having more people establish relationships with the company and its captive agents, and then using that relationship to encourage policyholders to buy other products.

I personally don’t have car insurance, nor have I had it for over 4 years because I don’t have a car. I don’t have a car because I found myself barely using the thing and I still had to worry about the base costs of insurance, registration, parking, etc. even if I didn’t use it. Turns out it is possible to live without a car in Los Angeles. It’s not that I was in a finincial bind, I just have no need for a car right now. I suspect as time goes on, there will be more people like me in cities.

A better question would be what would the rates of the 2 test cases have been in 3 years of continued coverage.  Betcha the regular persons rate wouldn’t change much.  I remember when I was a little coward, I was looking forward to getting past the magic number age when my rates would drop, because then I’d be a real grownup.  They spiked my rate before that birthday, and then cut my rate by almost as much as they spiked it by.  No accidents, no tickets, continuous coverage… but rates jumped so I would see a “savings” for becoming a mature driver.

This is a pretty terrible article and a very poorly conducted experiment.

I would consider taking you seriously if any part of your comment didn’t repeat things that other commenters have already said.

I’m kind of blown away to see this much trust

Sniffing the taints of the rich and powerful never goes out of style.

If the goal is simply profits, then shouldn’t all these companies be using the same formulas? Certainly that makes one of these methods wrong.

In the case of Geico and Progressive, Geico doesn’t use agents at all.

They actually do have agents, but most of their business is handled online and by phone, true.

Farmers, who are also in the study have 50,000 agents. Allstate, who are second next to State Farm is agent based too.

I’m still not seeing any kind of compelling argument for why State Farm would do the opposite.

They vary quite a bit state to state. With the relatively new exception of HHS acting in same cases like a health insurance regulator under the ACA, there is no federal insurance regulator. It is an entirely state regulated business

In the case of Geico and Progressive, Geico doesn’t use agents at all. Progressive does use independent agents, but most of its business is acquired (like Geico’s) online. And that’s actually relevant to this discussion as well. The use of credit, in particular, kicked off the “automated underwriting” craze. When you can boil down whether or not to take a risk, and how much to charge them, to a relatively simple formula, that makes it much much easier to use the Internet as your sales force, automatically quoting and binding business. State Farm doesn’t have an online sales tool — all of its policies are sold by individual agents, and the risks are reviewed by human underwriters.