Property crime is down, so why has my insurance premium gone up?
Crime data shows that rates of property crime have decreased (a lot!) but it costs me more every year to insure my stuff. What is going on? Every time I get an insurance bill it is higher than the year before.
It seems I’m not the only one who has noticed. Some basic numbers reported: Home insurance – up 10% in 2009, up 11% in 2010, up 8% in 2011 that’s 30% in three years! Car insurance – up 5% in 2009, up 4% 2010, 3% in 2011 – 12% in 3 years (source: domain.news). But inflation is low 2-3%. So the argument that the costs to fix or replace stuff is increasing only covers about 10% (at most) of the premium increases.
cgu.com.au describes the process of determining your insurance premium which I have summarised in the table below. So my age increases each year – presumably making me a safer driver up to certain limits, but everything else for both my home and car insurance is the same year in year out. This includes the risk from natural disaster – because a flood or bush-fire occurred, that doesn’t change the long term risk of it happening again. Although perhaps it makes the insurers sharpen their pencils and re-evaluate their risk assessments. The only variable here that should therefore be able to change my insurance premiums relates to crime in my area.
Table 1: key factors in determining your insurance premium according to CGU.com.
|Home insurance||Car Insurance|
|1) Cover level||1) Your age|
|2) Whether your house is occupied||2) Garage or street parking|
|3) What your house is made of||3) Driving history|
|4) The value of your insurance||4) Make and model of car|
|5) Where your home is located – level of theft and natural disaster risk||5) Your suburb or town – level of theft|
I should therefore be very worried – with around an 8-10% increase in premiums per year (inflation removed) this must mean that crime is going through the roof ! Let’s check the data.
Crime statistics for Queensland.
A look at the crime statistics for Queensland from 2001-2014 (from www.data.qld.gov.au )shows a dramatic reduction in property crime (Figure 1). Property crime includes many of the bad things that can happen to you via your stuff getting damaged or stolen (unlawful entry, arson, other property damage, other theft, fraud, handling stolen goods).
So if property crime goes down, then presumably I am less likely to have to make a claim against my insurance based on their risk factor five – your location. A 55% reduction in property crime in Qld over 13 years is pretty dramatic.
Figure 1: State wide reduction in property crime in Qld (53% drop in 13 years – nice)
So maybe the problem is that the Queensland wide statistics are too broad, and I should look at each of the regions. To make these charts a little easier to interpret I have smoothed the data (6 month moving average upcoming post to show how to do this in Truii) and split the data into two plots – one with those police regions dominated by urban areas (Figure 2) and rural areas (Figure 3).
There is some regional variation, the South West has only had a 28% decline in offences against property compared to the sunshine coast which has had a whopping 69% decline over the same period. The trend still applies across all regions – offences against property have decreased – a lot! So why are my premiums so high?
Figure 2: Offences per 100,000 for urban regions (the % in the legend show the overall decline in crimes against property for the region from 2001 – 2014)
Figure 3: Offences per 100,000 for rural regions (the % in the legend show the overall decline in crimes against property for the region from 2001 – 2014)
Check out the data for yourself at Truii.com under the example data library. Here is some more analysis of Queensland crime data in a recent article – showing that the vacuum in series crime is being filled by obnoxious jerks .
About the data visualisations
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