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How You Vote Could Affect How Much You Pay for Insurance

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Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency...

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Reviewed byJoel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/truthaboutins-live/2020/03/joel-ohman.jpg

UPDATED: Mar 13, 2020

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I guess we all thought we’d get a break from the voting talk after the heated 2012 presidential election came and went this past month. I guess we were wrong…

The subject of voting has now made its way into the insurance arena of all places. How can the two possibly be related? We knew you’d ask, and Safeco Insurance is just the company to tell us.

According to a press release, Safeco recently received a patent to link politics and insurance in order to assist in the underwriting and pricing of their personal lines insurance products.

Details, Please?

While the two topics couldn’t seem to have any less in common, the opposite is apparently true.

Safeco Insurance has come up with some statistical data that demonstrates there are at least six (yes, 6) factors relating to voting that will influence the probability of future insurance claims.

What are the six factors Safeco has identified?

Voter Registration – Are you even “in the game?”
Recent Voting – Voting 15 years ago doesn’t make you a regular.
Voting Frequency – The more you vote…the less you file claims (apparently)!
Type of Election – Do you only vote for the “big ones?”
Turn Out for the Election – This is likely related to the above.
Voting Method – Wow, we’re really getting down to brass tacks here.

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How Do They Get This Information?

All of the information listed above is easily tracked and available via public records for each city, county, state etc.

No different than your motor vehicle record and accident history, known as a C.L.U.E. report, the government keeps tabs and the information is available to those who are willing to look and pay for it.

And guess what?  Insurers are more than happy to pay for data that will help them make more money, or rather, lose less.

What Safeco actuaries (the math whizes in the insurance world) are trying to prove here is that our behavior and attitudes toward certain, measurable things can help insurers statistically determine the chance that we will file a claim.

The higher the chances of filing a claim the higher the insurance premium we should expect to pay.

While it may be harder to wrap your head around this concept, it’s really no different than charging a higher premium for a 16 year-old male with a Mustang than what you’d pay as a 35 year-old married mother of three, as far as the insurers are concerned.

This doesn’t mean your chances of getting into an accident are higher than the next guy or gal, rather whether or not you’re going to call and try to get the insurer to help pay for damages when they occur.

It’s important to understand that even if your insurer doesn’t pay out any actual money, there is an expense associated with adjusting a claim. Insurers spend millions of dollars per year paying for adjusters and other staff to review claims even when the claim is denied.

This is where the entire argument of using an individual’s credit, known as an insurance score, comes into play.

Those with less than stellar credit histories tend to file more claims as well…and most certainly pay more for insurance in states that allow the use of insurance scores for pricing coverage.

Read more: How to lower your car insurance costs.

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