For example, if I get car insurance and get into an accident, why should that increase my premiums. I’m insuring against that risk, so the fact that I had an accident surely shouldn’t change by risk factors.
In: 7
It’s all statistics.
If you looked at all of the people in the US, the general statistical trend would say that being in a crash means you’re more likely to be in *more* crashes.
This makes intuitive sense. If you get in a crash, this would mean that (on average) your driving is riskier than someone that hasn’t been in a crash.
Now, is this exact? No. You could have gotten in a freak accident. But the insurance company doesn’t really know this. They don’t know how you drive, how generally safe you are, etc.
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