I have previously argued with people who couldn't figure out why car insurance companies would ever raise someone's rates for being in an accident that was not their fault. Clearly, if it's not my fault, then I don't deserve to be punished!
Is there a word for this? Is it simply an inability to empathize (i.e., to see the world from the company's point-of-view) or is there a larger fallacy at work (e.g., a belief that the world operates according to some standard of fairness)?
The company doesn't care about punishing you, it's statistics. The insurance company is taking a gamble, and the odds of being in another accident, given that you've already been in an accident, are much higher than they were before. The odds have tipped against the insurance company, so they charge you more to keep it worth their while.
If you are not at fault, you are not at fault. If they could get away with pinning the blame on the other guy they surely would. So they have 0 legitimate reason to assume that your chances of being in another accident are higher than before, let alone 'much' higher.
The legal--or even common--definition of "fault" isn't at stake here. The fact of the matter is that they've got mountains of data that say that if some "random crazy fluke thing" happened to you, then you're more likely to have it happen again. Because that's what the data tells them. Heck, it could be that you just live in an area where people drive like crap.
Look at it this way: let's pretend an accident (regardless of fault) actually lowered the chances of a subsequent accident (maybe you're scared into good driving), and the longer you drove without an accident, the more likely you are to have one (maybe you become complacent or something). In this situation, your rates would go down when you got in an accident. Because it's not that they're trying to punish you, but rather they're trying to just charge based on the X% chance you're going to be in an accident, plus Y% overhead/profit.
Not being at fault legally does not mean your actions (or lack thereof) were not contributory to the accident occurring. There are a heck of a lot of ways you can increase the risk of being involved in an accident while avoiding legal fault; by contrast "defensive driving" exists as a discipline for doing the opposite.
Well if it wasn't their fault, and the company cuts them a break, then they have much more customer loyalty. The trick is how much effort you're willing to devote to figuring out he said she said debates which I'm guessing is not much.
If you drive defensively (if you've ever been a motorcyclist you'll know what I mean) then you can avoid accidents which nonetheless would not of been your fault. Thus, any accident is an _indicator_ (but not a perfect one) that you may not be the best of drivers.
An example might be the very common rear-end shunt at a roundabout (or "circle" in South Africa, not sure if you have 'em in the US) - an experienced driver will [usually] pull away confidently without hesitating. A less experienced driver can misjudge more often and set off only to suddenly stop, leaving the car behind to crash into them. Strictly road-lore says the rear driver should have observed better, they are liable as they crashed into a [near] stationary vehicle - but the foremost driver is hardly without blame. Yes, the rear vehicles insurance pays out for all damage; but the insurer of the front vehicle would be right in judging them a greater insurance _risk_.
It doesn't always work (some good drivers will just get unlucky and be hit by cars they can't avoid) but that's a rough version of a rationale.
Is there a word for this? Is it simply an inability to empathize (i.e., to see the world from the company's point-of-view) or is there a larger fallacy at work (e.g., a belief that the world operates according to some standard of fairness)?