Actually, I do understand how insurance works without going into history of house fires, I'm just looking at the data in a different way -- you know, like when a President-elect wins by popular vote, yet loses the election by the electoral vote, or how Michael Jordan didn't have fouls called on him and gets game winning shots (or LeBron's "Crab dribble"), or my father's favorite argument ''Mickey Mantle would have had the most stolen bases ever, if he didn't have bad knees". It's just a simple argument. No need to break out the HP 12C.
Surely, we can take something out of context (right?) and look at the question in a different way, yes? I certainly stomach enough of that here without commenting on everything about guns, car-flipping, etc.
If not, fine. You win. I'll say this now, and you can all sleep well -- The 986 really IS A CLASSIC! All things before and after are crap!!! Standard transmission should be required to vote!!! The Boxster is SO NOT A GIRL CAR!!! All things even, no one should ever buy a new car because of all things in life, car purchases must equal out and balance when it comes to a car purchase and we cannot accept a loss on this single purchase, ever!!!! BOB is NOT A UNICORN!
But, if you can conceive of what I proposed, bearing in mind that I'm not concerned with the ins, outs, and what-have-yous of what goes into the calculation of the rate... I am saying, in this particular instance, I don't think the insurance company got enough money for the individual through their set rate, to offset what they are paying out.
Stating it simply, insurance company received "x"; insurance company pays our "x+y"; x+y > x. QED.
That's it.
Now, having said this and since you and thstone are so much more knowledgeable about rate calculation than I, what is the modification for a person who gets into the accident? Is it just a simple jump to a higher risk group? What amount of a pay-out determines if someone is dropped? What if the driver is a member of a family policy? Does the policy go up if the kid is dropped? If the parents drop the kid do they return to the pre-kid rate? I'd assume teen drivers are already in a high rate group, so what is the next step? 1 standard deviation (SD)? Is it 2? Do we employ the Avagadro constant? Moreover, how do these accidents, or accidents such as this, go into the recalculation of rates of everybody? Do "safe drivers" go up a 1/2 a SD? How is it that Allstate has/had(?) that policy where rates actually go down over time? Was that all a lie?