The Insurance Geldscheisser

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Insurance is a con. Worse than Social Security, even – because you pay in and (normally) never get anything back.

Consider: You pay say $800 a year to insure your car. Over a ten year period that comes to $8,000. Gone. Out the window. You’ll never see it again.

Think about this. Most people don’t have major accidents. Insurance companies know this – and bank on it. For every dollar they pay out (grudgingly and after much-ado, usually) they take in probably ten more. Insurance companies are hugely profitable enterprises. I won’t call them businesses, because businesses – properly described – provide a useful product or service. They also don’t force you to to be a “customer,” as insurance companies do, having successfully egged on their bought-and-paid for agents in state government (that is, politicians) to pass laws making insurance “coverage” mandatory.

It is no coincidence that the bankrupting of America has tracked parallel with the rise of FIRE (Finance, Insurance, Real Estate). When you add up car, life, health and home insurance, many people are spending $10,000 a year or more for …. nothing! They’ve been gulled into believing they’re “covered” but they’ll be disabused of that notion if they ever have to file a claim. Yes, the insurer might pay… somethingeventually. But if it does, it will also double – or cancel – your premiums for future “coverage.” Ask anyone who has filed a major claim. Even after decades of just paying in. As soon as the math starts working out in favor of the insured – even a little bit – the terms of the relationship are swiftly altered to correct the imbalance.

Now let’s talk about car insurance specifically. It was made mandatory on the argument that it’s just not right to permit people to operate potentially lethal and always dangerous motor vehicles on public motorways without the driver having the means to compensate potential victims for any damages or injuries he might cause.

But that was just window dressing. The real motive was to create a coerced and captive “customer” base that had no choice but to pay up. Government-enforced cartels are secure from market pressure; they don’t have to worry about pleasing people – because the people have no choice. Oh, they can shop Tweedledee, perhaps. But he’s not much of an improvement over Tweedledum.

Well, how about a real alternative?

Why not return some market discipline to the insurance racket by making it mandatory only for those drivers who cannot demonstrate the financial means to cover damages equivalent to current mandatory state minimums for basic liability-only coverage?

In Virginia, the minimum liability requirements are as follows:

$25,000 bodily injury/death of one person;
$50,000 bodily injury/death of two persons;
$20,000 property damage;

Ok. So what if you have the ability – in an emergency – to cut a check for $75,000? Many people do, especially if you factor in home equity and 401k savings.

And if you do have that ability, then you have exactly the same “coverage” as the law in Virginia requires – only with a very key difference: Instead of pouring money into the insurance cartel’s pockets every year for the rest of your life (or at least, as long as you drive) you have all your money – every last cent of it – in the “bank.” If you never have an accident that damages the property or harms the person of another, then you will still have all your cash. With insurance “coverage,” you’ll have… nothing at the end of it all. Literally, thousands of dollars – possibly tens of thousands, over a lifetime – gone. Or rather, transferred. From your pocket to the pockets of the insurance cartel.

And that’s what it’s all about.

Ask yourself: Is there any rational reason why a person with the means to pay out a sum equivalent to the mandatory state minimums ought to be forced to buy the same “coverage” from a shyster insurance company? Will it matter in the slightest to the person whose car is damaged whether the repairs are paid for by the owner of the other car – or by some shyster insurance company (whose “adjuster” will do everything he can to lowball the amount paid out by such practices as using junkyard parts to fix the car – or, even better – total out the car and give the owner/sucker a check for two-thirds the fair market value)… well, the answer’s obvious:

Keep the cartel safe. Force people to pay.

It’s not about “safety,” folks. If you want to argue the point, then consider this: Virginia (and some other states) will let you drive without any coverage or demonstrated capacity to pay for damages at all. Just pay the state rather than the cartel (or not really, because like the Democratic and Republican parties these two are just different “wings” of the same foul bird) a$500 annual fee and you can drive all you want. You can be otherwise indigent and have no means of paying out one red cent for any damages you might cause to others.

So much for “safety.”

As always, it’s about money. Das Geld. And everyone who wants to drive a motor vehicle is what the Germans roughly call a Geldscheisser – literally, a money shitter. Crank his arm and out pops a coin. The state – and its buddy-boy, the insurance company – do the arm-yanking.

You do the coin-pooping.

Throw it in the Woods?

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  72 comments for “The Insurance Geldscheisser

  1. dom
    April 22, 2011 at 5:18 pm

    I dunno man! Insurance is expensive, but I would hate to think of all the poor drivers out there causing damage and not being able to foot the bill.

    • April 22, 2011 at 6:02 pm

      But the thing bees, they already can – and do! In Virginia, just pay $500 and you can legally drive with zero insurance coverage. Or, pay nothing – and just drive without insurance. Thousands (including illegal aliens) do… no consequences that matter for them.

      Just for you and me!

      • dom
        April 22, 2011 at 6:03 pm

        $500 per car? Or just per person?

        • April 22, 2011 at 6:13 pm

          Per registered vehicle, I think. When you fill out the registration form, it asks you to state that you either have liability coverage or pay the $500 “uninsured motorist” fee. Which gives you no coverage. It’s a lot cheaper than insurance for many people (especially if you’ve ever had a DWI or reckless driving conviction). But the point is, many people can – and do – drive without insurance, legally and not legally.

          I judge insurance to a bad deal for me, financially. Each year I’m paying several hundred bucks for liability only coverage (all my vehicles are old and not worth much so comprehensive would be stupid). I haven’t wrecked in almost 25 years (and even then, all I did was mess up my own car). Just a rough estimate – I’ve wasted about $15,000 over that time period on “coverage” I never used. If I had saved it/invested it, not only would I probably have made money on my money, I’d have a huge wad of cash on hand to be able to pay for all but the most serious damages to someone else’s car; just cut a check. No problem.

          Instead, the ^&$!! insurance ass clowns have it…

      • clover
        May 6, 2011 at 2:49 am

        It does look like you are right about the $500. It looks like you pay the $500 and you are not required to have insurance. You are still liable for any accidents you cause. The $500 goes into an insurance fund that goes to the insurance companies to offset the cost of uninsured drivers. Therefore if you pay the $500 and cause an accident and are a deadbeat that does not pay for his liabilities then part of the cost for uninsured motorist is paid by you anyway. You are helping others to pay for their own insurance premiums.

    • clover
      May 5, 2011 at 10:14 pm

      Only one question. What would happen if your state goes to not making anyone to have insurance. You then do not buy any. Some deadbeat hits you and causes 8 grand of damages and also puts your wife in the hospital for a couple of weeks. What would happen?

      • May 5, 2011 at 10:35 pm

        The answer’s obvious: There already are multitudes of deadbeats without insurance on the road – the law be damned! Your assumption is no different than the assumption made by advocates of gun control that if only laws are passed banning guns, why, criminal gun violence will be reduced! Of course, that doesn’t happen. Gun control merely disarms the people who aren’t the problem, making them even more likely to be victims of criminals with guns. Similarly, laws mandating insurance are routinely ignored by precisely the people who are (mostly) the problem – deadbeat assholes who don’t play by the normal rules of decent human conduct.

        Look, Clover. I am not going to be the one who hits you or anyone else and damages your car or injures your person. I’m a very good driver, with more experience (and training) than most – and a long record of accident-free driving to back that up. The car companies trust me with everything from $10k econoboxes to half million dollar exotics.

        The odds of my causing an accident are very low. But even if I did, I’m not a deadbeat. I not only acknowledge the responsibility to pay for any damages I might cause, short of an absolute catastrophe, I have the means to do so. (And remember: Mandatory minimums are precisely that; they do not pay one cent beyond the stated maximums, which are fairly low in Virginia at least. So even with the required insurance, I’d be obligated to pay anything over the maximum coverage on my own anyhow.)

        As with gun control laws, mandatory insurance just makes life more expensive and more of a hassle (and less free) for the people least likely to create a problem.

        The facts speak for themselves.

        • clover
          May 6, 2011 at 11:44 pm

          Since you say that you are such a great driver and there are so many in your state that you say are uninsured, are you excellent at evading other drivers also? Since you say you do not want insurance you must be ready to look out for the other guy without insurance and get out of their way.
          You say the facts speak for themselves. They will have to because facts that I post do not make it here.

          • May 6, 2011 at 11:57 pm

            Clover – you just don’t get it, do you? It is my risk to take. My money – not yours. If you are not comfortable driving without insurance then you should go ahead and buy whatever coverage makes you feel comfortable. But your standards are not my standards; and my life is not your life. I’m quite comfortable relying on my own skill to avoid accidents; it is a quarter-century now since my last one. That is a pretty good track record and indicative of low risk. But the point is, it’s my right to weigh the risks and make the choice – not yours to make for me or for anyone else.

            I am willing – happy – to let you live your life as you see fit. But you are unwilling to extend the same courtesy to others.

            I don’t care what you think is a “fair” price (or “a small price”) to pay for insurance coverage. Your value judgments are not superior to my own, as regards my own life – just as mine are not superior to you or yours . But, again, the difference between us is that I am content to leave you in peace to do as you see fit – while you are only content when you can force others to do as you think they should.

            Another person posted about this difference; the difference between the narcissist-sociopath who craves power over others and normal human beings.

            It’s obvious from all your authoritarian-collectivist sturm und drang what camp you belong to.

      • Brent P
        May 6, 2011 at 2:38 am

        Ahh.. the statist/collectivist stand by, the idea that people will be irresponsible without the threat of state violence. As if a law makes people responsible or moral or anything else through fear.

        What happens is exactly what happens now with the untold numbers of people that are irresponsible that ignore the law. Responsible people make it right regardless if they have insurance or not. Irresponsible people don’t take care of their responsibilities, law or no law… because they are *gasp* irresponsible. Irresponsibility and not having a fear of consequences tend to go together. So why would a fear based system modify their behavior?

        If the attempts to legislate responsibility and morality have any effect, it’s the opposite as people start to believe that if there isn’t a law they can just treat other people poorly. It serves to spread decay in the society.

        • clover
          May 6, 2011 at 2:28 pm

          Brent P, it is not about fear in the mandatory insurance example. It is about being able to register your vehicle and renew the plates. You could say that you fear not being able to drive your car without being caught. Your chances are pretty high that you would get caught unless you drive little. You are right though that many people do not do anything without fear. Some people do not fear driving 100 mph weaving through heavy traffic. That is why other fears needed to be added to those people.

          • Brent P
            May 7, 2011 at 12:44 am

            You don’t get it. I’ve been hit by two different people who didn’t have insurance. In Illinois. Their cars were registered. They didn’t have insurance. Registration demands insurance info, the SoS does spot checks. But what happens?

            Both did pay out of pocket. Was easier than dealing with insurance companies actually.

            BTW, nobody would need to weave through traffic if it wasn’t for your underposted speed limits. BTW, on disciplined limited access highway 100mph is perfectly safe. The safest driving I’ve done in my life was just below and above 100mph and was legal, just outside the USA.

            Your brand of control freakism makes us less safe and decays the society.

      • clover
        May 6, 2011 at 1:56 pm

        Eric you miss out on a couple of points. States with mandatory insurance have close to 100% compliance particularly in states where there are not a huge amount of illegal alians. That drives your chance of being hit my an uninsured deadbeat to a very low percentage. At the same time if you have uninsured motorist and underinsured motorist insurance your premiums are going to be very low for that coverage. If you do nothing and leave it up to the people to decided for themselves, your chances of getting hit by a deadbeat without insurance goes up a lot and uninsured motorists insurance permiums go up a lot.
        This has nothing to do with gun control and is not even close.

        If your odds are very low of getting into an accident then your rates should be very low. Mine would only be a couple of hundred dollars for such coverage because I am classified as a very good risk for very good reason.

        • May 6, 2011 at 4:07 pm

          Clover, there are tens of thousands of illegal aliens in many states (including Virginia; we even have them up here in the rural hills of the Appalachians). They don’t have valid driver’s licenses – much less insurance. For them, there are virtually no consequences. They hit you, total your car – and what does “the law” do to the illegal alien? Nothing much – because there’s not much (apparently) that the law is willing to do. Then there are the American citizens who aren’t illegal but are deadbeats – people with no money but several DWI or similar convictions who drive (uninsured, of course) also, “the law” be damned. Your “100 percent” compliance is both wrong and irrelevant because it is never the majority (or even the most) who cause problems but rather an asshole minority – and that asshole minority doesn’t give a fuck what “the law” says. Hence, your endless bleats that laws are necessary result in laws that harass the people who aren’t the problem – in this case, people who drive carefully and behave responsibly – not the asshole who don’t (and don’t have insurance, either).

          It is precisely the same thing as gun control; I understand that you don’t see it – because I understand that Clovers are not able to grasp principles, let alone think conceptually.

          • clover
            May 6, 2011 at 6:05 pm

            Eric I would like to see your stats that there are 10s of thousands of illegal aliens in Virginia. From what stats I have seen the east cost have very few as a percentage. Again I could care less what the number of illegal aliens there are. If there are 10s of thousands of other deadbeats that do get insurance then my rates are going to go down. Do you disagree that my rates are lower because more people are able to handle their liabilities? Do you disgree that more people now have insurance to cover their liabilities. Do you disagree that my uninsured motorists cost goes down a lot because my state has mandatory insurance? Do you disagree that if someone hits me then there is a very good chance that I will not have to cover all of my expenses?

          • May 6, 2011 at 6:31 pm

            Clover, this is from a 2010 Washington Post article: “The number in Virginia fell by 65,000, to 240,000, a decline that Jeffrey Passel, an author of the report, attributed to the economy as well as to stricter legislation passed in Prince William County in 2007 and 2008.” (See http://www.washingtonpost.com/wp-dyn/content/article/2010/09/01/AR2010090106747.html ) Note: that’s a quarter-million illegals in VA after a decline during 2010 of 65,000! As I said, even here in my very rural county, we have a large number of illegals – several hundred, at least (the county only has about 14,000 residents, so the number of illegals is proportionately very large). Nationally, the estimates range from 18-24 million illegals.

            And we haven’t even touched on the legals who drive without insurance. The multiple DWI offenders; the PWT and underclass blacks… etc. They don’t care about the law because the law can’t – or won’t – do much to them… because they have no assets to take, no jobs to lose… so, why not ignore the law that says you must carry insurance?

            As I’ve said now multiple times (and won’t do again; this is the last time we go round and round over the same issue) mandatory insurance doesn’t do anything except make insurance more expensive – and impose hassles and needless expenses on the people who are not the problem.

          • clover
            May 6, 2011 at 7:08 pm

            Only one question Eric. How many of those thousands drive? I would think it would be pretty hard to register vehicles. Maybe we show go to more saftey stops to catch all of these unregistered cars?

          • May 6, 2011 at 7:55 pm

            Well, Clover, let’s assume just 10 percent of the 240,000 illegal aliens in Virginia drive. That’s still almost 25,000 unlicensed, uninsured illegals in Virginia alone. As I wrote originally – tens of thousands of them. And 10 percent is (obviously) a lowball figure. Ever Google “illegal aliens” and “car accidents”? Try it sometime.

            As for registering vehicles: It’s as easy as filling out the form. You don’t have to provide proof of insurance in Virginia. You just check the box that says you do – even if you don’t. Sure, if they catch you, there will be fines and other repercussions. But such things only matter to people who are responsible and who have things to lose, or which the government can take. Illegals – and tailer trash/underclass blacks, etc. – don’t.

  2. C. Evans
    April 22, 2011 at 8:40 pm

    I disagree with your point that insurance is a con. I agree with Bob Murphy’s argument that insurance does have a useful social function: http://mises.org/daily/5178/The-Social-Function-of-Insurance

    However, I completely agree with you that insurance should not be required by the State. If people want to pay for peace of mind, they should be free to do so. If people want to take the risks, they should be free to do that as well.

    • April 22, 2011 at 11:10 pm

      When it’s compulsory it’s a con; that’s my main argument. If you can choose not to have it – then you buy it willingly (or not). And if people could choose, then costs would be much lower, because insurers would be forced to offer fair, competitive rates – else lose the business. But it’s a government-enforced cartel so they can insolently charge whatever they like. After all, what can you do? Shop another company that’s part of the cartel? Yeah. Save big switching to Geico or Progressive or whatever… shysters, one and all.

      • Brent P
        May 6, 2011 at 2:15 am

        what really makes it a scam is that the state mandates the liability insurance to be on the vehicle rather than the driver. Last I heard a person can only drive one car at a time.

        • dom
          May 6, 2011 at 2:40 am

          Yeah, but the vehicle to people relationship is many to one. The people to vehicle relationship can be one to many. Which side generates more..

          • Brent P
            May 6, 2011 at 2:45 am

            we should have the choice to buy what is best for each of us. Different people have different situations.

          • dom
            May 6, 2011 at 2:10 pm

            I agree bro! I have two trucks, a car, and two motorcycles all plated and insured. There is no way I can drive them all at once! -even with the wife helping!

          • May 6, 2011 at 4:24 pm

            The one that aggravates me the most is having to maintain insurance on my multiple (four) motorcycles year ’round, even though I don’t ride at all during the winter, which can be 3-4 months.

            I don’t pay a lot to cover my vehicles – individually. The thing that costs me a small fortune is insuring all of them. I have two trucks, one antique car and four motorcycles. Even if each only costs me say $200 annually, that’s $1,400 out the window every year. Yes, I can afford it. But I resent it. Over 20 years that comes to almost $30,000 – not chump change and money I would have preferred to do something else with. I could have my old Pontiac professionally restored, for example. Or I could buy a few acres of land. Or take a really nice vacation with the wife.

            Instead, I get to help finance the multi-million-dollar lifestyles of insura nce company executives.

          • mithrandir
            May 6, 2011 at 8:03 pm

            @Eric,

            You are not able to have insurance for only the part of the year (8 months in your example) when you use the motorcycles?

            I am not sure if it can be done in NJ, but I know my ins. co. will only issue premiums 6 months at a time. I asked if I could pay a year at a time, but was told no. (You can pay the 6month premium at once or break it up in several payments with a srvc charge per each payment.)

            I know why it is called a premium. It cost an arm and a leg to pay. ;) At times it seems that the mob has more honor than the typical insurance company.

          • May 6, 2011 at 10:51 pm

            Well, you can pay for it in six month installments, but the law (in VA) says that as long as the vehicle is registered, it must also be insured – even if it’s just sitting in the garage for months at a time!

    • Shoal Creek
      April 23, 2011 at 3:34 pm

      My father hasn’t had an insurance claim in 59 years of driving. Before it became mandatory, he bought liability insurance as a precaution because he did not yet have the means to cover any expensive damages he might cause from a mechanical failure.

      When the mandatory auto insurance law was passed in his state, his insurance premium literally doubled over night and increased almost every year after that for 20 years. Thus, it is obvious that state-mandated insurance is a con and always has been.

      BTW, I have driven for 24 years and have never once had an accident that cost more than $500 to fix (the legal minimum in my state for reporting to the police), except for one 3 years ago. A tire on a semi-truck I was driving blew out and it pulled my truck off the road, jackknifed when it hit a shallow gully, and totaled the cab (no damage to anybody else’s property and I only had bruises and did not take an ambulance ride or go to a doctor’s office). The state trooper that investigated the accident ruled it “equipment failure” and declared it unavoidable by the driver and assigned no fault. He even told me that the last similar accident he investigated killed the driver and that I must have some great presence of mind to hang on to the wheel to keep control as well as I did. Yet, my personal auto insurance company still insisted on raising my premiums by almost $200 per year. I am absolutely certain that auto liability insurance is a con and a racket.

  3. clover
    April 23, 2011 at 2:43 am

    By the way I liked that clover video.

    • April 23, 2011 at 10:49 am

      Of course! We knew you would…

  4. clover
    April 23, 2011 at 3:15 am

    I am sure this is not going to get printed but Eric you are a stupid idiot. There is huge competition between insurance companies for auto insurance. There is little profit per policy. I guess since you think that there are cars that do not have accidents so the insurance companies are making huge money. The costs to an insurance company per claim is high. You are just too stupid to know any better.

    • April 23, 2011 at 10:20 am

      Well, crunchy, caramelized Clover, “competition” between insurance companies is like the “competition” between other government-backed cartels like McDonnell Douglas and GE. It’s great when your company can force its “customers” to pay up!

      Little profit per policy? Oh, but Clover, all those profits do add up, now don’t they? Consider: Over a 30 year period, a person who pays an annual $600 premium (a lowball number) has paid out $18,000 to the insurance co. – the equivalent of a new car. Now, given that most people don’t file claims and even fewer file major claims involving total loss of vehicle or injury to people, etc. – you can see how the geld is being scheissed.

      PS: If insurance is all about the public goooooood, the why should it be on a for-profit basis? At gunpoint? Your argument would carry more weight if insurance were a combined risk pool with all the money gone to pay for claims and the bare minimum necessary administrative costs. How much do you suppose the Geico HNIC takes home each year?

      Why, oh Clover, are you so opposed to insurance companies having to earn their business voluntarily? If insurance is such a great thing, surely most sensible people would purchase it, right? (And don’t give us your Clover Crap about “people driving around without insurance.” They already do. Legally, in several states – provided they pay off the government. Or illegally – as countless illegal aliens do every day. What about them? And what about the fact that “mandatory minimum” coverage does not cover you beyond a certain point anyhow?

    • dom
      April 23, 2011 at 1:06 pm

      I love the “Eric you are a stupid idiot” argument! Nice to see clover keep par for the course and displaying his steady flow of ignorance. Since I know how much he seems (yes seems) to appreciate facts he should be interested to learn who owns Geico. And Geico is not the biggest!

      Geico, Inc. is a wholly-owned subsidiary of Berkshire Hathaway, Inc. which trades on the New York Stock Exchange under the ticker symbol BRKA.

      Last time I checked Berkshire Hathaway’s stock (two seconds ago) its trading at $123,691.00. Warren Buffet, the company’s chairman and CEO, is THE MAN when it comes to making profits. Which leads me to wonder if profits are so minimal in insurance then why is he (one of the most successful businessmen in THE WORLD) involved with it?

      According to CNN’s ranking of the TOp industries: Most profitable Fortune 500
      Insurance companies ranked 22, 27, 35, and 47th out of ALL industries. With Berkshire Hathaway rank number one amongst them.

      FORTUNE 500
      Our annual ranking of America’s largest corporations

      http://money.cnn.com/magazines/fortune/fortune500/2009/performers/industries/profits/

      Industries

      http://money.cnn.com/magazines/fortune/fortune500/2009/industries/182/index.html

      • clover
        May 6, 2011 at 1:33 am

        dom, how about that 4.5% profit by Geico. It will probably be a loss this year with the tornados in the south. Every company owned by other companies are not huge profit makers. Even Berkshire Hathaway has had its losses.

        • dom
          May 6, 2011 at 2:44 am

          Do you get 4.5% on your savings/checking account? Do you ever take on losses? I promise Berkshire does pretty good.. I was primed to make this argument a month ago, now I’m bored with it.

        • May 6, 2011 at 9:22 am

          Clover, have you ever heard the phrase, “money is fungible”? You can cite underwriting losses until the sky falls (just as oil companies cite depreciation costs of equipment) to try to minimize/play down the bottom line reality – huge profits. Insurance companies are money machines, among the most profitable (cough) “businesses” in existence – to a great extent because, like the Mafia, they use force to make people buy what they are selling. I’ve said this before, but I’ll say it again in the hope that maybe it will penetrate: Using force to compel people to buy anything is bad enough, but when you’re forced to buy something that is the product or service of a private, for profit (and high profit) “business,” it is especially vicious. It apparently doesn;t bother you bit that billion dollar “businesses” base their profits – and the rich salaries paid to executives, which amount to millions annually – on laws that compel people to pay up. If insurance (car or health) were strictly run as a common pool, pay as you go, without some asshole (indeed, many assholes) making a fortune off the deal – then maybe your arguments would carry more weight. I’d still object to the mandatory part, because mandatory equals force – and I don’t believe you can ever make a moral argument in favor of threatening people with violence unless they have threatened you with violence first. But at least, the current douchbaggery of people being forced to pay tribute to giant, state-backed cartels so that those cartels can roll around in other people’s ill-gotten money would be over with.

  5. john
    April 23, 2011 at 5:09 am

    Forced insurance s***’s, but you are missing the real argument, insurance dose have a real purpose, catastorphy—- but if you want to argue aginst it then you should argue on the point of it being our responsibilty to protect ourselves and how dose the gov figure out how much protection I want, If I am bill gates or some other rich dude or girl I do not relly care about your 75,000 dollars of insurance but if you wipe out 100,000 dollar ???? you pick a nice car and that is all I can afford and you only have 75,000 dollars of insurance I’m still screwed. everyone has to figure out risk for themselves, some people do not mind a dent in there car and would rather have 500 or 5,000 bucks in their pocket and others want there junker fixes back to perfection. It is our job to figure out what we wnat and are willing to pay for.

    By the way what do you mean 500 to the state, ticket or insurance pool. Il had 500 dollar tickets but if you get caught more than once a year I think it is also jail time.

    I agree it is a racket but mostly because not many people understand the purpose. I do love your articles and thank you just think you are missing the point on this one.

    • April 23, 2011 at 9:46 am

      Well, but here’s the problem: The “mandatory minimum” coverages required by law are just that. If you don’t buy more coverage (not required by law) the you are still responsible for any amount of damages about the minimum ($75k, say).

      So, again, you are paying for “insurance” but aren’t really “covered.”

      • clover
        April 23, 2011 at 2:00 pm

        I just looked up my insurance cost. A newer vehicle with full coverage and 300,000 in liability and it cost me a total of $493 for the total year. That is in a state with manditory insuance. I would be a stupid idiot if I did not have such coverage. I guess the insurance company is getting rich off of me. Eric, you can make up whatever you like but you are wrong on this one.

        • April 23, 2011 at 3:23 pm

          Clover, if you think it’s a good deal then by all means, you should be free to buy insurance. As much as you want! What people object to is being forced to buy insurance when they see no need for it – which ought to be their decision, not yours (or the government’s – which just means Clovers who have acquired political power).

          Another point: Some of us own multiple vehicles, which can get very expensive to insure, even if the individual per-vehicle cost is fairly low.

          But the point – again, ad infinitum – is that you Clovers need to MYOB and quit trying to force others to live as you think they ought to. I am confident that Cloverism has reached its apex. Psychologically normal people are growing tired of the relentless overweaning buysbodyism that is the defining characteristic of Clovers everywhere.

          • clover
            April 23, 2011 at 6:59 pm

            If someone hits me on the road then I think they should need to have the ability to compensate me for my losses. I could care less if it is through insurance or if they have a million dollars of assets that they can use. It does not matter to me as long as they have the ability to pay. If they do not have that ability then they should not be on the roadway. If you can think of some other way besides manditory insurance then i would like to hear it.

          • April 24, 2011 at 9:20 am

            But Clover, they may – and probably will not – actually hit you. Most “accidents” aren’t. They’re the result of driver error. Avoidable driver error. Why should a superb driver, who has never caused an accident that resulted in damage to someone else’s property/person have to carry insurance? For “just in case”? Well, you can make that argument about almost anything. Is it not also true that a person walking down the street might be accidentally tripped and made to fall by another pedestrian and injured (perhaps seriously) as a result? Should mandatory pedestrian insurance be required, too?

            I’ve already pointed out your hypocrisy as regards your chosen “risky” personal lifestyle choice (skiing). You could injure someone else, possibly to such an extent that they will need lifetime care that will cost millions, ultimately. Should you have to carry special insurance for this “what if?” scenario? But, you’re a great skier… right? Your chances of being seriously hurt – or seriously hurting someone else – are probably very low. I agree with you. It would be outrageous, therefore, to pass a law requiring you to buy special extra coverage for some vague and highly unlikely “what if?” scenario.

            But of course, being a Clover, you are unable to see that car insurance is no different.

            An excellent driver is extremely unlikely to be the cause of an accident. Yet all drivers – the good and the bad – are required by law to carry often exorbitant coverage, regardless.

            Your argument is premised on the faulty notion that all drivers are equally likely to cause an accident, therefore all drivers should be equally required to carry insurance.

            But the truth is that for a good driver, insurance (especially liability insurance) is a bad deal because it amounts to paying for a service one will very likely never need.

            It’s analogous to ObamaCare mandating that everyone – including healthy young adults – be forced to fork over their hard-earned cash to the HMO cartel.

            My guess is you’re in favor of that, too.

          • clover
            April 25, 2011 at 2:43 am

            Ok Eric I will go along with your statement that excellent drivers should not be required to have insurance even though their premiums are very low such as in my case. I will go along with them not needing insurance as long as YOU pay for any accidents that these excellent drivers cause. That cost would 0nly come to maybe a billion or more dollars each year. I am sure you can handle that.
            Race car drivers cause many accidents each year on the highway. It is a recoreded fact. Yes excellent drivers cause fewer accidemts but how do you determine the excellent driver? The one that is so good that they can tailgate at 75 mph or more a few feet from the car in front of them? The one that weaves in and out and around traffic. Maybe like a story I heard once about a guy that said he was such a good driver and complained about the cars in front of him not driving faster and therefore he drove in the blind area of a car beside him for miles and said how good he was to evade the accident when the driver started switching lanes. What an idiot!

          • April 25, 2011 at 11:18 am

            Cloverite logic is quite something! Why, oh confit d’ Clover, should I pay for damages caused by other drivers? (Viz, “I will go along with them not needing insurance as long as YOU pay for any accidents that these excellent drivers cause.”)

            Shouldn’t I (and anyone else) only have to pay for damages I cause? And what if I don’t cause any damages, oh thrice-fried Clover? I haven’t ever caused any such (when I smashed up my own car back in 1987, no one was involved but me and though the car was smashed, it was mine so no one paid but me … I didn’t file a claim, I just hauled the wreck home and parted it out) yet every year for the past 25-plus years now I have been forced to hand over hundreds of dollars to a shyster insurance company – thanks to Clovers like you who have bleated and whined that it must be mandatory (note spelling).

            Meanwhile, you object to my proposal that you be required by law to carry extra/special insurance to cover any damages you might cause while skiing. Because, of course, you think subjectively and have convinced yourself that your “risky” activities really aren’t and have arbitrarily decided that only certain other people’s “risky” actions (as defined/interpreted by you) represent “too much” risk – and therefore should be subject to mandatory (again, spell it out with me now) insurance.

          • clover
            April 25, 2011 at 9:00 pm

            Having accidents and not hitting anyone else is not an excellent driver. It is a lucky driver.

          • April 25, 2011 at 10:01 pm

            Absurd. That’s no different than saying some people just happen to be fat while others just happen to be fit.

            Bad drivers – lacking skill or good judgment – are much more likely to cause a wreck (note the precise language; “accidents” don’t just happen) than a driver who is high-skilled and possesses excellent judgment. This is a point hardly worth discussion.

  6. James
    April 23, 2011 at 2:01 pm

    First, let me say that Eric is completely right about the mandatory nature of insurance. Unfortunately, unless I missed it, neither he or anyone else has pointed out the real problem of how insurance is structured, homeowners and auto in particular.

    Insurance should be used strictly as a device to protect the individual, and his family, from unexpected losses. In other words, everyone should be responsible for their own coverage and if they fail to plan effectively, then they’re out of luck. Instead of having the nanny state, through the use of force and coercion, require us to provide for others, the decision should be left up to each individual.

    Following an example used in a previous post, the individual that owns a $100,000 vehicle, would purchase and pay the required premium, commensurate with his exposure and the person with a $20,000 automobile would obviously pay a lesser rate. All involved parties would file a claim with their own insurance company and receive compensation, up to the level of coverage purchased, for all injuries, both bodily and property. Lawsuits, another byproduct of our convoluted insurance structure, would basically be a thing of the past, which, of course, gives another reason why this will never happen. Insurance companies could offer infinite levels of protection, based on each individual’s risk tolerance, and the premiums would be set accordingly.

    Bottom line, if you’re involved in a loss and have purchased the appropriate coverages, good for you. Alternately, if you took the risk and decided to remain uninsured, well, good luck with that.

    • clover
      April 23, 2011 at 2:51 pm

      james you and others miss the point of manditory insurance. Manditoy insurance is not to cover you. Manditory insurance/liability is to cover someone else if you damage their vehicle or injure them and you do not have any resources to cover those damages.
      The only other option would be to have a no fault state so that you cover yourself no matter who is responsible. The only problem with that is that those states that went to no fault have far higher costs for insurance and costs to individuals.

      • April 23, 2011 at 3:10 pm

        Sigh. Clover, Clover… Clover. I’ve already pointed out two facts you (as always) ignore:

        * In Virginia and (other states) you can legally drive with no liability insurance at all. Zip! Nada! Provided you pay the state $500. And of course, many illegal aliens and others just drive without either insurance or paying the $500. Mandatory insurance is like gun control: It doesn’t stop the problem it purports to ameliorate but it does make life more expensive and hassle-filled for the people who are not the problem.

        * Minimum Liability coverage is just that. Any damages above the minimum are the individual’s responsibility. So, your “coverage” doesn’t “cover” as much as you may think it does.

        PS: You’d look less Cloverish calling me stupid if you learned to spell before you posted.

      • James
        April 23, 2011 at 4:00 pm

        “james you and others miss the point of manditory insurance.” And I think you miss the point that the sun rises in the east, but I digress.

        “Manditory insurance/liability is to cover someone else if you damage their vehicle or injure them and you do not have any resources to cover those damages.” Duh! Thank you for stating the obvious, were you planning on making a valid point? Your statement simply acknowledges the structure of our current system, but does nothing to validate the program.

        “The only other option would be to have a no fault state so that you cover yourself no matter who is responsible.” Now we’re moving in the right direction. Unfortunately, even in quasi no-fault states, such as Michigan, you’re still required to purchase auto insurance. Why do you have a problem with assessing your own risks and taking steps to protect yourself? Do you expect a third party’s health insurance to cover you? What about your neighbors disability polices? Or if you die prematurely, is it your expectation that someone else’s life policy should pay on your behalf? Why do you believe that automobile insurance shouldn’t be handled in the same manner?

        “The only problem with that is that those states that went to no fault have far higher costs for insurance and costs to individuals” That’s because those states have mandated certain coverage levels that drive up the cost of insurance. Do you realize that the State of Michigan demands every automobile policy provide for lifetime medical benefits, if you’re injured in an automobile accident. There is no cap on the amount paid out under those policies. Also, an individual can collect 3 years of wage loss, at approximately $5,000 per month, along with replacement services of $20 per day.

        Sorry clover, but you’ve offered nothing to support your argument that insurance should be a government mandated requirement.

  7. Clik
    April 23, 2011 at 3:06 pm

    My real objection is having to insure all the vehicles I own, when I can only drive one at a time.

    Why not insure the Driver’s Permit rather than cars?

    My Pick-up camper sits most of the year as do my motorcycles, and my spare car which is a must for us long distance commuters.

    Our insurance is being verified by the Motor Vehicle Administration now anyway, so, why not tie it to the Driver’s Permit rather than the vehicles?

    Oh, yeah….because the Insurance Industry makes a killing forcing me (through their bought and paid for legislators) to insure vehicles I can’t drive because I can only drive one at a time!

    Boy! What a gravy business. Thousands of vehcles posing zero risk for the insurer while they have our politicians forcing us to pay anyway.

    • April 23, 2011 at 3:15 pm

      Amen.

      I have multiple vehicles, including four motorcycles that are not used at all for 3-4 months during the off season (winter). Yet by law I must carry – and pay for – insurance, even though there is zero “risk” that I will cause damage to another’s person or property.

      Cloverism isn’t just annoying. It is bankrupting us.

      • StanTheMan
        April 23, 2011 at 4:14 pm

        I remember back in the 80′s talking to my uncle in Austria about his camper vehicle. I asked him why it didn’t have any plates on it and he said that when he needed to use it he just took the plates off his car and bolted them on to the camper. The law allowed you to do this because only one car was driven at a time. The insurance followed the license plate. I guess he had to tell the insurance company what vehicles he owned etc. but I’m not sure.

        I think that would be a great system here, especially for the collector guys, but no way would the government and insurance companies give up that kind of dough. You don’t mess with an insurance company’s profit or a government agency’s budget.

  8. Charlie
    April 23, 2011 at 3:55 pm

    You could write a very similar article about Obamacare. I think, like me, a lot of people had discovered what a huge rip-off health insurance had become – I bought it for a little while very cheaply, relatively, from Unicare, but I discovered if I just paid cash for my medical care that it was much cheaper than what the insurance cost me. This is why I believe Obamacare is not about helping people. What it is really about is saving the health insurance companies, by forcing everyone to “buy” insurance.

  9. James
    April 23, 2011 at 5:01 pm

    I feel a need to comment on this theme about only insuring the vehicle I’m driving at a particular moment. Keeping in mind that I agree that the purchase of insurance , whatever type, should be a voluntary decision for each individual.

    Yes, YOU might only be able to drive one vehicle at a time, but that doesn’t stop your wife, your child or the next door neighbor to whom you’ve loaned your vehicle. I have no problem with the program, as long as we understand that, if and when, your “uninsured” vehicle is involved in a loss, while no coverage is active, then you’re out of luck and coverage doesn’t apply, no exceptions. There’s that personal responsibility issue again.

    Full disclosure: I work in the insurance industry and spent 10 years in the Claims department and can tell you first hand of the problems caused, when we came across files, where the insured had an accident during a period of “time out of force”. They would offer every excuse in the book in order to find a way for us to pay.

    My solution, keeping in mind our current structure, would be to completely separate the coverages and write a policy for damage to the vehicle and the operator and another policy for liability or “negligent acts” of the driver. Which, technically is what happens currently. The liability coverage, on your automobile policy, follows you regardless of which vehicle, owned or non-owned, that you are operating.

    Finally, if we were able to create a truly free market for insurance, absent government involvement, I believe a number of desires people have would be offered by different companies and as with other products, our costs would go down.

    • April 23, 2011 at 6:06 pm

      Can’t argue with any of that; well-said!

  10. clover
    April 23, 2011 at 6:24 pm

    I would like to see your Virginia policy where you just pay $500 and get by without insurance. Why would you do that when someone pays that amount for a high liability and full coverage insurance? My guess is that the $500 is a state liability ccverage option for someone that has such a bad record that they cannot get insuranc thruugh a normal carrier.
    Again Eric, I hope you can get by without insurance. Then I hope when you cause an accident and someone sues your ass and takes everythibng you have and then if they only could put you in jail for life because you can not afford the total of the losses so you are put into hard labour for the rest of your life.

    I guess you dont feel like you need insurance. Since if you cause major damages to someone else you probably would not live through the accident anyway becuse you are not wearing a seat belt.

    • dom
      April 24, 2011 at 2:03 am

      “Then I hope when you cause an accident and someone sues your ass and takes everythibng you have and then if they only could put you in jail for life because you can not afford the total of the losses so you are put into hard labour for the rest of your life.”

      Seriously? Do you really wish such bad things on others? If so, I think you should seek medical attention because you are a sick fuck and need your head examined.

      • April 24, 2011 at 7:29 am

        Clovers are angry (they accuse us of being angry!) but they express their anger passive aggressively, in the form of blocking us in on the roads and agitating for more laws to control what they see as behavior/choices that don’t follow the Cloverite Life Script.

        The thing that drives a Clover nuts the most is the person who insist on exercising his own judgment – especially when that judgment is at odds with a Clover!

  11. April 23, 2011 at 7:09 pm

    Poor ol’ Clover! He’s frothing and spittin’!

    Try to calm down and re-read what I posted earlier. No, wait, I’ll make it easy for you and type it again, here:

    Virginia law allows a person to operate a motor vehicle without any liability insurance coverage whatsoever, provided a $500 fee is paid to the state. This fee does not provide insurance. It’s just a fee paid to the state. I referenced it in the article, oh Cloveroni, to make the point that the whole thing (forced insurance) is a scam. If “safety” and “making sure you had coverage so that you could compensate any potential victims,” etc. were the object, then Virginia – and other states – would not have such a policy. But they do want your money, so they’ll take your money.

    Likewise the huge number of people – to a great extent illegal aiens – who drive without insurance or paying the fee. Me gusta!

    But what you just can’t get a handle on is that other people view risk differently than you do; that for many people, insurance is a terrible deal. They’d rather set the money that would paid out in premiums aside, to be used for other things if not used to pay for accident damages.

    Mandatory (again, notice the spelling) insurance drives up the cost of insurance, because people can’t say no. When you can’t say no to a “service” and that “service” is operated on a for-profit basis, that service will be higher-priced than it would be if people could refuse to purchase that service. See Dom’s post in re Geico.

    You’ve probably had a number of wrecks and so feel the need to have lots of coverage. I haven’t – and so, don’t.

    Who are you to tell me whether I need “x” amount of coverage? For all you know, Cloveroni, I could cut a check for $100,000 if I had to (more than the Va. minimum I am required to carry).

    I hope someday soon we non-Clovers can separate ourselves from you Clovers. You can have your Cloverite Busybody State, where only the collective “we” has any rights (as determined by Clovers) and the individual may not do anything that could conceivably, remotely, vaguely, potentially affect the “we.”

    The rest of us will take liberty instead.

  12. Steve
    April 24, 2011 at 12:03 am

    Great idea, but the other branch of government (lawyers) would never let it happen. The ambulance chasers need the chance of a big payday.

    • April 24, 2011 at 7:25 am

      They’ve got us coming and going!

  13. Ernest Roberts
    April 24, 2011 at 12:03 pm

    Eric,
    To further illustrate the insurance racket, let’s also consider these facts:

    Insurance is, basically house rigged gambling, they bet you’ll never have an accident while you bet that you will. When they lose, they can set their own terms for paying off the bet, which is referred to as ” post claim underwriting”. This is in addition to all the bet hedging that goes into the fine print of a policy.

    If an insurer defrauds the insured, it’s defined as ” bad faith” and is a matter for civil courts. If the insured defrauds the insurer it’s defined as “insurance fraud” and is prosecuted as a class II felony, with the presumption of guilt inherent in all criminal prosecutions.

    You are probably aware of these facts, though they weren’t included in your column. Thanks for a good column.

    Ernest Roberts
    Amelia, Va

    • April 24, 2011 at 12:12 pm

      You bet, Ernest – welcome to the site!

  14. clover
    April 25, 2011 at 2:31 am

    Nice idiot Eric. I see that you seem not to post any of my factual commemts. Are your views so bad that they can not stand up to any sort of of facts? The fact that Geico had a profit of 4.5% of premiums. Even someone that has a poor driving record paying a couple of grand a year, the profit would only be $90 and that is if the person with a bad record did not cause an accident.

    • April 25, 2011 at 10:49 am

      Clover… Clover …Clover…

      Insurance profits are “only” 4.5 percent? Did you know that ExxonMobil’s profits are “only” 5.8 percent? Po’ po’ Big Oil! Po’ po’ insurance companies! Why, they’re only just barely scraping by!

      The fact is, Clover, that insurance companies are among the most profitable “businesses” (I put that in quotes for reasons I will explain shortly) going.

      And how about those po’ public-spirited insurance company CEOs? Why, they are only taking home several million dollars each annually. (http://www.bodyshopbusiness.com/Article/4060/hey_big_spender_insurance_company_ceo_salaries.aspx) And that info is ten years old. God knows how much they take home now.

      Clover, your argument would be a little stronger if insurance companies were not run for profit – and hugely profitable. It is outrageous that a for-profit business is able to use the police power of the state to force people to buy its product or service. That is why I put “business” in quotation marks. No legitimate business forces people to buy what it is selling.

      Only insurance companies get to do that – thanks to Cloverite thinking like yours!

    • clover
      April 25, 2011 at 11:31 am

      Eric you are so stupid and lack any type of facts. There are many non for profit insurance companies. The largest of them is State Farm. I guess you think no one should profit from investments. You should not make a dime for any articles you write. All I can say is if you think Ato insurance companies are so profitable then I would say go for it. You will be rich. As you say there is no competition and the insurance companies can charge whatever they like, you will be a rich person if you just start writing policies. Again it is fine that you do not like to be told what to do but you do not need to lie about the facts or completely ignore or suppress them. Why is it that insurnce companies do not have at least 30% margin like millions of other companies out there?

      • April 25, 2011 at 11:40 am

        Poor Clover! He accuses me of being “fact free” and “stupid”… well. Let’s see! State Farm just doubled its profit to $1.8 billion (see http://www.bloomberg.com/news/2011-03-01/state-farm-annual-profit-climbs-to-1-8-billion-on-underwriting.html
        ) Pretty good score for a “non profit”!

        And, oh – I am all for making a profit on an investment. But that is not the same thing as making a profit by forcing people to buy your service, now is it? Do you regard the Mafia as making “investments,” too?

        No one forces you to visit this web site – and I don’t force anyone to buy my articles, either.

        The fact (your favorite term, even if you don’t understand the term’s proper use) is that insurance underwriting is hugely profitable. The total take – net profit vs. the profit per policy – is enormous, just like the profits made by the oil cartels But at least we don’t have to buy oil, oh Cloveroni.

      • dom
        April 25, 2011 at 2:48 pm

        CLOVER: Listen dude.. I am tired of looking that the comments block on the right and seeing your posts begin with an insult. I understand you don’t think others can have good ideas and your opinion is the best representation of perfection any of us who visit this site can ever hope for! *I just threw up in my mouth twice as I wrote that* Anyhow, I’m repeating myself here.. Ease up on the name calling and shit. At least be creative in doing it, so it doesn’t look like you are crapping on this site. “It puts the lotion on the skin, or it gets the hose again!”

        • April 25, 2011 at 3:47 pm

          It’s all he’s got – he can’t help it. Expecting reasonableness or logic from a Clover is like, well, expecting a Clover to move over!

        • clover
          April 25, 2011 at 7:34 pm

          Dom i have mostly not given my opinion. I have given facts which you can not understand. As far as not liking my comments, you and Eric seem to be able to edit and remove comments anyway. I have seen dozens of my fact filled posts deleted and many posts rewritten to change the content to what you want to see.

          • April 25, 2011 at 7:40 pm

            In every case, Clover, your “facts” have been rebutted – not with opinions but with specifics. Which you then ignore before going on some other Cloverite tear. For example, your claim that insurance companies hardly make any profit. In fact, they are among the most profitable of businesses; whether they make “x” margin on a given policy is irrelevant. What is relevant is their overall profitability – which is tremendous (very close to the take raked in by the large oil companies). That’s a fact – not debatable. It’s also a fact that insurance executives are payed multi-million-dollar annual “compensation packages.” And it is a fact that insurance companies use the government to force people to pay them exorbitant amounts for their “coverage” – which is how they make their profits.

            Or do you think the money just comes out of the Geldscheisser’s arse?

            You similarly ignore facts about speed limits (such as the 85th Percentile Rule as per the Manual on Uniform Traffic Control Devices) and deny the obvious fact that most speed limits are under-posted and that “speeding” tickets are a huge cash cow for state/local governments.

            And on and on… it gets tiresome, because there’s no possibility of communication with someone who is either obtuse or just adamant about defending his own arbitrary conceptions, all facts and reason to the contrary notwithstanding.

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