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Young pay more

January 2, 2014
ROBERT?WESOLOWSKI , The Mining Journal

Why do young people pay higher premiums for auto insurance than older people? Insurance companies have determined that young people are a higher risk in life than middle age and senior citizens. For example, "The highest rates among car insurance groups are those that are under the age of 25-years-old.

Typically those under the age of 25-years-old are assumed to be less experienced, and statistically they have the highest liability to insurance companies. Those under the age of 25-years-old tend to have the most self caused collisions because of inexperience. They crash more. They pay more.

While most uninsured Americans recognize the need for health care at any age, some people simply refuse to buy into the Affordable Care Act not for health reasons, but for political reasons. Extensive interviews by Gallup reveals that 45 percent Republicans will pay the fine because they oppose Obamacare. Among independents, 31 percent, say they will pay the fine, but only 15 percent of uninsured Democrats will pay the fine.

Part of the controversy about Obamacare is the lack of information. Most people look at their insurance contract with all those legal terms and their eyes glaze over. Currently, 81 percent of uninsured Americans claim to be aware of the requirement to have insurance or pay a fine.

Thirty percent of the uninsured say they are "very" or "somewhat familiar" with state and federal government health insurance exchanges, while 66 percent are not familiar with them. Less than half of those who plan to get insurance, 46 percent, say they will do so through an exchange.

Thirty-six percent say they will get it outside of an exchange, and the remaining 17 percent are unsure.

It should be clear to most people that various age groups will pay different rates for insurance. High risk people pay more. Low risk groups pay less. The high risk youngsters pays more than the low risk group because youngsters use more auto insurance while senior citizens have fewer auto crashes.

However, when all groups are combined into one category, the low risk group will pay greater premiums to sustain the entire group. The higher premiums, therefore, maintain the insurance umbrella so that all groups will have the benefits of good health insurance when they need it. Some people do not need auto insurance, but everybody needs health insurance.

Kids need health care insurance after an auto accident and seniors need health care insurance as they get old. That's the way insurance works.

ROBERT?WESOLOWSKI

Marquette

 
 

 

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