James L. Pocrass, a lawyer specializing in representing bicyclists who have been hit by motorists, put it thus in a recent post on Biking in LA:
Behind the warm and fuzzy jingles, the precocious animal mascots, and the deep-voiced spokespersons, insurance companies are faceless, heartless corporations whose one purpose is to increase premiums and to decrease payouts in order to make the biggest profits possible.
Even by means that are distinctly incoherent with the world as it is. This was thrown in our own faces rather blatantly just today, when my wife Gina opened her car insurance bill. I rarely get into a car—perhaps six or eight times a year. Gina drives more often, but we both work at home now, we have five bicycles, and we live in what may be the most walkable neighborhood in Los Angeles, with a Walk Score of 89, as well as a Transit Score of 62 and a Bike Score of 59. She is presently driving less than 3,000 miles per year. (Yes, in Los Angeles…!)
So she was rather perturbed to find when her insurance company noted that her premiums were to rise slightly, as they had changed the standard estimate for annual miles driven in our area from 12,000 to 13,000. Yet driving, as you probably know, has been falling out of favor for years in the US as a whole, and in California. Total vehicle miles driven per year peaked in 2007, and has been falling since. But average vehicle miles driven per capita has been falling since 2004, well before the Great Recession. Driving is down and sinking steadily.
Then why the change in estimate on Gina’s car insurance policy? Insurance companies are generally meticulous, so they must know of the trend. So I assume the answer is mere greed. A phone call to the agent took care of Gina’s case; her yearly mileage estimate was reduced to the minimum permissible (that is, what they choose to permit themselves), 7,000 miles.
But the distortion remains. The millions of drivers in California and elsewhere who are driving less are being cheated by this bland duplicity. It’s simply wrong. And even if it’s somehow an innocent mistake—though the insurance industry, in which I briefly worked, does not generally make data errors—it’s disquieting that an entire business sector could be so out of touch with verified reality.