If you have not been involved in a car accident, consider yourself lucky, or possibly overdue for one. According to estimates from the Auto Insurance Industry, a claim for a collision will be filed approximately once every 17.9 years for the average driver.
If you received your license at the age of 16, the odds that you will experience some kind of driving accident by the time you are 34, at the latest, is high. In the course of a typical driving lifespan, you could have a total of three to four accidents.
It is likely that these crashes are not fatal. There are around 10 million accidents of all kinds every year, from scrapes in the parking lot to a crash involving several cars, according to the National Security Council. In 2009, only three out of every 1,000 of the 10 million accidents involved a death.
But most likely, these accidents are expensive. More than two million people are injured in accidents each year.
Insurance companies can sell protection, and watching the ads on television suggests that insurance companies do a good job at this. However, they are in the business to make a profit. They do not make a profit by paying for their accidents, but rather they do it by making you pay for your accidents in advance.
The price of insurance is at a sweet spot where the rate is low enough to attract a customer from a competitor, but high enough for the company to make a profit. Making money off future possible accidents involves an elaborate risk assessment formula that is the secret sauce of the insurance business.
Computer data can now create thousands of driver profile combinations in seconds. All profiles can be reduced to the determination of two things: how many accidents will occur, or, put another way, how likely is it that each driver in each car on the road has an accident, and how much will each accident cost?
You are already a statistic
The frequency of when the next accident is due to occur also depends on the insurance company a driver has. A company that insures a large number of young drivers, who are much more likely to have accidents, will probably budget for a shorter gap between crashes than a company with an older, more responsible customer base.
But the odds are made to be defeated, right? There are many factors beyond the control of the driver. Clearly, you can not alter road conditions or the actions of other drivers. However, in the game of car insurance, many factors are combined into a strong message for the insurance company: have the driver pay for the accident that they are expected to have every 17.9 years.