Insuring the Driver – Not The Vehicles

Print Friendly

Mandatory car insurance is a pretty hateful concept – a form of prior restraint that says, in effect, because you may cause injury  you must be insured against the possibility. Even though millions of people go a lifetime without ever actually causing anyone any injury, they suffer the certainty of paying, year in and year out, fees to the insurance mafia – backed by the ever-present billy club of the state. Over 20 or 30 years, the sum lost can easily run to $20,000 or more.  Out the window – and into the pockets of the insurance mafia.

That’s bad.

Worse, though, is this business of forcing people to purchase insurance coverage on every vehicle they own – even though (so far as we know) a person can only drive one vehicle at a time.

Wouldn’t it be more reasonable to insure the driver?

After all, cars don’t drive themselves – yet. Until the driver gets behind the wheel, they’re inert. If he’s driving one, he can’t be driving another. Which means, he can’t cause injury or damage with the vehicles not being driven. Thus, even the odious prior restraint argument so beloved by Clovers doesn’t hold water.

So why – in effect – tax him multiple times? Why compel him to pay for coverage that, by definition, is unnecessary?

This question answers itself, of course. It’s because of the money to be made by the insurance mafia.

Each car equals a ka-ching.

Sure, the insurance mafia will usually give you a “multiple vehicle” discount – but you’re still paying for multiple vehicles. Which means, you’re paying a lot more than you would if you only had to insure yourself.

It’s a particular burden on the car (and bike) hobbyist/enthusiast, who may have three or four (or more) vehicles. Typically, only one is the “daily driver.” The others go out occasionally. Some sit for months on end – as in the case of motorcycles during the winter. Others may be temporarily inoperable while they undergo repairs. But even so – in many areas – The Law, friend of the insurance mafia – says all vehicles must be registered – or else they’re subject to seizure as junkers or derelicts by the polizei. There have even been cases of on private property, out-of-sight, in the backyard or garage – but unregistered – vehicles being threatened with seizure or actually seized by the local thug scrum.

And naturally, The Law also typically says that any registered vehicle must also be insured.

Failure to comply can bring down onerous retribution – especially as regards the mandatory insurance coverage. Even if the vehicle never leaves your driveway, it better be insured – or else.

It’s pretty outrageous.

A reasonable – and so, fair – system would insure the driver, not his vehicles. Base his premium on his individual risk profile – based on his particular history of causing accidents and incurring losses – as opposed to the group-guilting that is typical today. You know: You’re single, male – and under 30. So even though you have never caused an accident or cost the insurance mafia a penny, the fact that other under-30s have been involved in accidents (for whatever reason) becomes the pretext for higher-than-usual premiums for you.

Or, because you’re over 60.

Or you own a “sporty” car. There are numerous pretexts – none of which, of course, have anything to do with something you’ve actually done. Just something you might do.

Enter prior restraint – and fat fees.

Multiple fees.

Insuring the driver rather than the car would probably cut the typical multi-vehicle owner’s insurance costs by one-third to one-half, depending on how many vehicles he is currently forced to insure. And there would be no “losers” – except, of course, the insurance mafia.

People would still be covered.

And if people could say no  . . . as in “No thanks, I’ll pass. Your premiums are too high. I think I’ll set aside some money for just-in-case instead” – insurance costs would plummet. Because the insurance mafia would no longer be a mafia. Because it could no longer use force against its “customers.” Instead, it would have to rely on peaceful persuasion – on offering people a good deal. Something they actually need – as measured by their willingness to pay for it.

But we can’t have that, can we?

Prior restraint – and government-backed shakedowns – is infinitely preferable to  peaceable free market interactions.

From a certain perspective, of course.

Throw it in the Woods?

 

Share Button

eric

Author of "Automotive Atrocities" and "Road Hogs" (MBI). Currently living amongst the Edentulites in rural SW Virginia. 

  94 comments for “Insuring the Driver – Not The Vehicles

  1. liberranter
    August 20, 2012 at 6:23 pm

    This REALLY hits home. I’m currently paying insurance for four vehicles, only two of which are regularly driven. Neither my wife of I have any history of causing costly accidents, so, based on a realistic actuarial standard of risk measurement such as what you describe here, our premiums should be half of what they are now (we’re currently paying almost $4K per year for all four vehicles; if we lived in an urban instead of a rural area, I have no doubt it would be much worse).

    But, you’ve nailed it. Given that the cartelized insurance mafia (and they ARE a cartel – just try finding an insurance company that provides genuinely competitive rates or genuinely unique and specialized policies actually tailored to the individual’s specific needs) has its hooks in the political classes as deeply as do the banksters and the military-industrialists, nothing will change.

    • August 20, 2012 at 8:22 pm

      You and me both!

      We have eight vehicles. One is a “farm truck.” One is an antique car. Three are antique bikes.

      Only one is a regularly used/daily driver.

      Individually,the cost to insure is not huge, but times eight, it adds up to significant sum. And that’s just annually. What really gets me going is thinking about how much money I am throwing out the window over 20 or so years. I could easily have finished my basement with that – or just put it in the bank.

      But, no.

      • August 21, 2012 at 4:00 pm

        Ever think of using Haggerty for your classic cars? I have my 71 Mustang and my 2 79 928’s insured with them and it’s less than $500 yr for all 3 cars.

        • August 21, 2012 at 4:02 pm

          And that’s full coverage too…but they do require an inspection and appraisal on all vehicles before they’ll underwrite the policy.

          • BrentP
            August 21, 2012 at 4:38 pm

            I just had to send them photos. But then again my car is worth no more than $4k tops so that’s probably why. Not a big risk on their part.

        • August 21, 2012 at 6:29 pm

          Yeah, I have specialty (agree value) insurance for my TA. It’s the only vehicle I own that I would voluntarily insure – chiefly for the theft protection, rather than collision or liability.

    • Pauline Moreno
      August 23, 2012 at 10:05 pm

      For those of you that have multiple vehicles, try lowering the mileage useage on the vehicles that are occasional use. I have two vehicles a car/commuter and an older truck which I only use for “truck things”. I spoke with CSAA and was able to declare I only drive the truck 3,000 miles or less per year and that dropped the premium on that truck quite a bit.

      • August 24, 2012 at 9:55 am

        Hi Pauline,

        That works – to a point.

        I have several vehicles that are driven/ridden less than 500 miles a year. I still am required to have insurance and though it’s not a huge amount per vehicle, it adds up when you’re a hobbyist who has several. It’s ridiculous, as I see it, for me to waste money insuring – as an example – the little Kawasaki 250 triple I recently finished restoring. It’s a garage queen I take up and down the road – our little country road, out in the middle of nowhere – a couple times a month. The odds I will hit someone or cause damage to someone else are nil. Yet I still have to fork out the pay-off. If I don’t and the local Officer Not Friendly sees me riding up and down our little road, I’m in for a pile of trouble. Yet I have caused no one any harm.

        Mandatory insurance is just another manifestation of prior restraint – and punishment of victimless crime.

  2. saner
    August 20, 2012 at 6:39 pm

    Hey, where did you get a crazy idea like that?

    :)

  3. saner
    August 20, 2012 at 6:49 pm

    At least here in British Columbia parked vehicles do not need registration or insurance. In the rural areas anyway, though in urban environments rules differ.

    Having to insure each vehicle separately is the reason I only drive my F250 diesel. The savings I could get from driving my Golf diesel are far too little to make up for the cost of insuring two vehicles.

    One of the sillier rules our government owned monopoly ‘The Insurance Corporation OF British Columbia’ has is that no matter how long you drive accident free, your rates can never be discounted more than 43%. They do however give you one accident without rate increase if you drive accident free for 10 years. Upshot is that after 10 years of safe driving you may as well drive like a moron and use your freebie as there is no other benefit. I jest….sort of. Far less likely to endanger myself avoiding the idiot who pulls out in front of me with free a accident available.

  4. DD
    August 20, 2012 at 8:43 pm

    Oh quit yer whining and just obey your owners.
    …And let’s not starve the monkeys.

    Love,
    -Clover

    • August 21, 2012 at 3:29 pm

      …………………./´¯/)
      ………………..,/¯../
      ………………./…./
      …………./´¯/’…’/´¯¯`·¸
      ………./’/…/…./……./¨¯\
      ……..(‘(…´…´…. ¯~/’…’)
      ………\……………..’…../
      ……….”…\………. _.·´
      …………\…………..(
      …………..\………….\…

      • Karla K
        August 23, 2012 at 5:58 pm

        Good one!

      • DD
        August 23, 2012 at 7:38 pm

        Excellent!!!

  5. August 20, 2012 at 10:27 pm

    I would like to propose that the concept of insurance is a bane on society. Any insurance.

    Please watch the following clip.

    There are no more accidents at the intersection because everyone is directly conscious of the consequences. Insurance, car insurance being a perfect example, allows us to put consequence and risk (the ONLY factors involved in authentic accountability) out of our mind. If you are insured, how much consequence can you face? A deductible? $250?

    Insurance distorts the scale of consequence on reality. There is no escalating consequence in accordance with behavior. If I break something in my house that is worth $2, I suffer a $2 loss. If I break something worth $100, I suffer a $100 loss. Similarly, the escalating penalties for crimes (which are crooked and distorted, but useful for showing the theory) go up as the severity of the crime increases. People are less likely to walk across a street without a walk sign if traffic is 60mph, rather than 25mph. Why? Consequences. It’s much worse to make a mistake and get hit by a car going 60.

    Insurance distorts reality, lastly in the real world, and first in the mind. A person driving a car, with insurance, will suffer consequences ranging from:

    lowest (deductible)

    medium (rarely, a light criminal infraction)

    highest (severe criminal infraction)

    The point I am making is that insurance distorts consequences in the mind first. Why are drivers not conscious of how dangerous texting while driving is? Because they have been largely removed from the consequences by way of insurance. We have largely been removed from all consequences in the car, thanks to insurance, so the gravity of the situation does not weigh on the individual when they get in the car. The highest risk they are likely to face is paying a deductible, the same as a negligible criminal fine. And this is how texting while driving goes from being a $250 problem, to becoming a death sentence, on yourself or others. Escalating consequence has been removed, so there is no real world feedback for a person to tell when their hand is on the flame. They just end up getting burned.

    If there was no insurance, not only would everything be cheaper, but everyone would be a lot more careful. Or they would be the ones properly punished for their own foolishness (other than the innocents).

    All this without even talking about how insurance allows Boobus Americanus to buy houses and cars that are much too expensive and unsustainable. If your house gets wiped out by a hurricane every 3 years, and you have no insurance, you’ll build in a better place or build a cheaper house. Instead, people who make consciously good decisions are milked to advance the cause of irresponsibility. Would people buy a $500,000 house that could go up in flames without insurance? Would they buy the car that is past their budget without insurance?

    Insurance enables the expansion and acquisition of the easy money that the Feds have rolled out, which is dooming our society. Indeed, has doomed, we are long past the point of return. The very idea of insurance is poison.

    • Mithrandir
      August 20, 2012 at 11:06 pm

      Nice video and interesting concept.

      Would this apply to health care as well?

      I am not completely sure if banning all forms of insurance will work.

      • August 20, 2012 at 11:22 pm

        I’m not for banning insurance. If somebody wants to pool together with others for risk mitigation, that’s their prerogative, I’m only saying that the idea of insurance is irresponsible. Car insurance only makes sense if you’re in a pool of insurees who are more responsible than you. House insurance only makes sense if you are in an insurance pool with people who have secure houses (to pay for yours). Health insurance only makes sense for you if you are in a pool with people who are all healthier than you.

        If everyone in the country crashed their car at the same time, that would be the end of car insurance. Insurance can only exist under the pretense of supporting the irresponsible with the collateral of the responsible.

        Let’s not pretend that we live in a world with infinite resources. Health care is no exception. In fact, health care, just like the aforementioned examples, is so expensive DIRECTLY BECAUSE of insurance. Maybe somebody could crunch some numbers and show how paying buildings full of people BILLIONS of dollars, who produce nothing, who only decide who gets what care, could somehow lower the cost? We don’t need statistics on this… it defies logic. Let’s say you have two businesses. One business runs as it normally does (let’s say a sports team), the other business–in addition to running normally–is required to pay billions of dollars to people who sit in a building and do, almost literally, nothing. Which team can charge lower ticket prices?

        Without insurance, everyone would have more money. Care would be cheaper. There would be competition to further lower the price. People would experience the consequence of health.

        Why has there been great advancement in cosmetic surgeries, which are not covered by insurance, and reductions in prices, and little advancement in basic care, and prices going up?

        And in situations where costs exceed what an individual can pay, communities and private charities can come together to fill in the gaps. Using the state as a violent instrument against people–due to an alleged lack of private charity or community–only further corrodes those pillars in our society.

        The world is one of finite resources. Some things simply cannot be paid for. Even insurance cuts you off after a particular amount.

        • August 21, 2012 at 10:07 am

          I’m not for banning it, either. Nothing involving freely consenting adults ought to be banned or limited in any way in a free society.

          But I agree, it’s generally a bad “investment.”

          I’ve long maintained that one of the reasons so many people are in financial trouble today is because of so much insurance. They have car, home, health, life… and spend thousands a year on all this – tens of thousands over a period of decades. Most people – responsible people – would be much better off, financially and otherwise, if they were able to simply put the money aside for “what if?” – and have it available for other purposes when “what if” doesn’t materialize.

          • Douglas
            August 23, 2012 at 8:21 pm

            The issue is mandating car insurance at all, whether on the vehicle or driver. Let the marketplace decide. Hell, Cali(porn)ia’s mandated minimums (15/30/5) are so ridiculously low that they provide little tangible protection to the average motorist. Stop mandating insurance for higher-risk drivers, but merely require that failure to be financially responsible will be cause to revoke a drivers license. Sure, the irresponsible clowns will drive unlicensed as well as uninsured (as do an estimated 20% of CA motorists now), but at least it gives the thugscum something to do for all the tax monies we spend on them. Still, I predict that for those who decide they need it, the costs will be lower than they are now, and Big Insurance will still make plenty

          • Dr Jett
            September 2, 2012 at 12:36 am

            An 88yr old driver just turned left in front of my friend killing him on my motorcycle. I fought with Progressive? Insurance for 4 months because their goal was to cheat me out of the $2000.00 value of my totaled motorcycle by offering me $1000.00 which most people would have settled for because that was book value. I just got a check for $1700.00 and the bike for $300.00 salvage. Progressive was offended when I said they insured a driver that probably shouldn’t even have a license. I’m pushing to have him tested for more than his eyesight which according to MVD’s response is all that they can test him for in Arizona. I doubt if he had the proper driving skills to have a drivers license. Insurance companies policies and our governments drivers licensing regulations are literally killing us.

    • liberranter
      August 21, 2012 at 5:52 am

      Good points on moral hazard. Insurance, at least when it has the force of the State behind it, certainly does introduce this in a lot of ways.

      • August 21, 2012 at 6:45 am

        Thanks. Agreed, when enforced by the state, the result is horrible. When offered in the market, it only benefits the most irresponsible (or those who believe themselves to be very unfortunate in the near future). This is why insurance advertising is always trying to scare and tempt responsible people. Don’t have your house destroyed! Save money by never making a claim (ha). They don’t say “If you’re an irresponsible dumbass, quick! Call us!” for all the obvious, profit-making reasons…

        • liberranter
          August 21, 2012 at 4:09 pm

          What no one in the lamestream media are paying attention to is the fact that insurance fraud is apparently at an all-time high. What makes it worse is that the insurance companies, in many cases, do NOTHING to validate claims, particularly if the claims are for small dollar amounts (under, say $2K).

          Example in point from my own recent experience: A little over a year ago, I was pulling out of a public parking lot in downtown Phoenix. The guy parked in the space next to me was parked almost diagonally, with his left rear bumper protruding into my space – in fact, he was almost touching my right rear fender (he pulled into the space sometime after I parked, as the space was empty when I parked. How and why he parked diagonally is best left to philosophers and physicists). This positioning of his vehicle made it impossible for me to back out of the space in a straight line and almost impossible to turn at an angle to avoid contact with his vehicle due to the fact that the person parked on the other side of me was hugging the dividing line between spaces (as is typical of urban parking spaces, these were extremely narrow, to put it kindly).

          Anyway, as I was slowly backing out of the parking space, doing my damnedest to make the body of my 2004 Nissan Frontier pickup go through contortionist maneuvers in order to avoid contact with either vehicle on each side of me, the unavoidable happened: my right rear bumper brushed* the left rear bumper of the diagonally parked car to my right. As it just so happened, the owner of the vehicle, a young 20-something kid, was walking through the lot and saw my bumper brush his. He approached me, let me know that he saw what happened, and we exchanged information. There was no –and I mean absolutely NO– damage to either vehicle, not even so much as a scratch on either bumper.

          To make a long story short, the little moron filed a claim against me through is insurance company. Apparently he either had never dealt with insurance claims before, or he’d pulled off similar scams in the past and had gotten away with them, so he figured he try again. In addition to having to make a statement to both his and my insurer, I also had to take my truck down to a local collision center to have an adjuster take photos proving that no damage was done to my vehicle. (Question: what the hell does this prove, days or weeks after an accident? How does anyone know that a photo of either party’s vehicle showing damage is of damage that took place at the time of and scene of the accident and not before or after? I know of know process that companies use on a consistent basis to resolve this.)

          So, imagine my surprise when I called my insurance company two months later and they told me that they had paid this dipshit $500.00. When I demanded to know why, given that 1) no damage was done to either vehicle, and 2) $500.00 equates to a typical deductible, so why pay out at all, I was essentially told that “we’d rather just pay out a small claim than fight it. It costs us more to adjudicate it than to just give up the money.”

          So, a month ago, I opened up my policy renewal notice, and, surprise, surprise: my annual premium for auto coverage this year is $600.00 higher than last year, despite the fact that nothing actually occurred taht warrant such an increase. Quite obviously this is the insurance company attempting to recoup both the $500.00 paid out to the other party, as well as an extra $100.00 to recoup admin costs or pad profit.

          Finally, you’ve all seen these ridiculous ads from companies like Geico and Progressive, ads that seriously try to convince you that one insurance company is significantly different from any other. Ever wonder how they can afford to air such intelligence-insulting bullshit? I think we all know…

          (* I say “brushed” instead of “scraped” because the word “scrape” connotes that marks or some identifiable form of damage was left behind by the contact. That was not the case here.)

          • August 21, 2012 at 4:46 pm

            Good to keep an eye out for. That sucks.

            Yeah, you’ve hit it. It seems like half of the ads on television are for insurance companies. That should tell people something about who is making how much money.

          • Ken
            August 23, 2012 at 8:38 pm

            I have refused to even consider GEICO an insurance company since discovering that in the 90s they gave radar and lidar sets to the police departments of many states and cities across the country, notably in Virginia. Since ‘insurers’ are notorious for jacking up their vigourish if one has tickets, this is nothing short of collusion.

          • August 24, 2012 at 10:02 am

            There’s that – and there’s also Progressive’s push for in-car recorders to monitor your driving. Specifically, whether you “speed” – and how many miles you drive. In order to “adjust” your rates accordingly. Voluntary – for now…

          • Dr Jett
            September 2, 2012 at 12:54 am

            I had a problem with Progressive Insurance when I had to get an SR22 for not having insurance on my car when it was totaled. (My fault) I insured my motorcycle which I rode until I could afford a car a year later. A STUPID 15 yr old kid ran into the side of my car chasing a basketball on a 4 lane city street. I didn’t get a ticket because I wasn’t at fault. Progressive was insensed and sent 4 people out to talk to me about why I hadn’t insured the more expensive vehicle, the car. I informed them that I insured the only vehicle that I had at the time. THE LAW states that an SR22 insurance covers any vehicle that you drive, so it gave me 3 years of cheap auto and motorcycle insurance. I told the Progressive agents that since I didn’t receive a ticket, I wasn’t going to worry about the boy’s mother sueing them or me because it wasn’t my fault if she raised an idiot. Then I told them to get off of my property and do their job. Tell the dumb bitch and her attorney to go fuck off because they aren’t going to pay her anything.
            If you are in a situation like the parking garage again, take a picture of the car that blocked you in for protection and tell the kid that it was his fault for not parking straight. Then tell him to leave while he still can before he really pisses you off further. Tell him that HE was negligent by placing his car in a position that blocked you from leaving. You have to force the issue with other drivers and insurance companies to defend your rights.

    • Dr Jett
      September 2, 2012 at 12:14 am

      This is a good analysis of insurance companies who have paid off the legislature to use the government as part of their protection racket. I quit buying cars because I rarely drive them and pay only $110.00 per year for minimum liability on 2 1000cc BMW motorcycles. Insurance increases the price of all products and services for one purpose. Yep, insurance company profits.

  6. Vasectomised Infidel
    August 20, 2012 at 10:38 pm

    Here’s how it works in the Land of The Free.
    I have two vehicles. A 2003 Audi S3 and a 2003 Audi A2 FSI. In Germany, we have three registration options.
    1. Register the car all year.
    2. Register the car for 2-11 months each year.
    3. Register two like vehicles using the same license plate.
    For options 1 & 2, one pays for taxes and insurance for only the months the vehicle is registered.
    Option 3, one pays taxes and insurance on the most expensive of the two vehicles for 12 months each year and he can drive which ever vehicle he wants. Because the plates need to be switched from one vehicle to the other, both cannot be on the road at the same time.
    I register my S3 for 6 months each year (the numberplates have 04/09 on the right side showing when the months the car can be driven). The A2 is registered for 5 months (with 05/09) on the right side of the plate (I also have an ’83 Golf in Mexico, German registered for 07/08 but that’s another story). I pay 50% and 42% of the annual registration and taxes respectively.
    My rates are based upon how long I have driven without a claim (glass doesn’t count) and how many Kilometers I drive each car. The S3 is driven 9000Km and the A2 12000. If I only drive (for example) the A2 for 8000Km one year, the following year I can drive for 16000Km. The odometer reading is logged at the time the insurance policy is written. The is a set base rate (set by the insurance company – not companies) for each type of vehicle. Since Audi’s have a history of fewer accidents and thefts compared to a similar VW’s, the base is lower. If one is a new driver, this rate can be 140% of the base. By law, if no claims are made, the rate must be reduced by a certain percentage (I don’t know what this is).
    I am at a 40% rate so I pay 175€ (ca. $210) each year on the S3 and 93€ on the A2. My rates would be higher if my Wife drove because she doesn’t have a German Driving License and has never had insurance here. Also, both cars could be on the road at the same time – increasing the risk.
    Another important factor is: Insurance Companies do not have access to a driver’s records. The Government has strict privacy laws so sharing a driver’s Driving Record is illegal – going to jail illegal. So, insurance companies are only concerned with how many claims one has had, not how many tickets he has received. Because there is no finacial incentive, insurance companies do not have “safety experts” advocating Speed Limits and paying-off politicians to pass laws/ award grants so more tickets can be written. Incidently, this paragraph also applies to Mexico (except maybe for the `going to jail illegal´part).

    • just wondering
      August 24, 2012 at 2:33 pm

      Why is no one commenting and dissecting this interesting comment from Germany, and asking him some questions? Looks like some reasonable government regulation actually works, but does not fit in with your ethereal “ideology”? Just wondering, since it would make for a decent discussion.

      • Texas Chris
        August 24, 2012 at 5:23 pm

        For me, any regulation that requires force to be used against people who have not caused damage or injury is wrong. Now, if I cause a wreck, then I should pay. If I resist, then I should be forced to pay. But to be forced to pay BEFORE damage is caused, because it MAY be caused, is a foot in the door for future requirements of that sort.

        Next thing you know they’ll require me to buy HEALTH insurance, just in case I get sick!

        (wink wink, nudge nudge)

        The bottom line is this: are we willing to kill people in order to make them buy auto insurance? Because, given sufficient resistance, the government will fine, imprison, and murder those who sufficiently resist.

  7. Blake
    August 21, 2012 at 1:35 am

    Insurance sucks. Been paying for 28 years with no claims. However, I did get hit when I was an 18 year old punk by somebody blowing through a red light. I’m talking red where the light was hot – several seconds red. Although I had 4 witnesses, I got exactly zero dollars for my totalled car. I had PL/PD – no collision. Michigan is a “no fault” state you see. Nobody is at fault, everybody gets an A, and nobody loses the game since we don’t keep score. What a freaking Utopia.

    So – even though I was zero percent at fault – I got nothing but a smashed 1970 Chrysler Imperial Lebaron to pay impound fees on.

    I hate insurance companies and mandatory insurance laws. I have no problem with voluntary insurance per se, but moral hazard makes it more dangerous to drive with an insured polulace. Michael points this out quite well above.

    Car insurance creates more crashes than there would be absent car insurance.

    Health insurance creates more unhealthy people than there would be absent health insurance.

    Homeowners insurance creates more potential for fire, floods, and break ins than there otherwise would be absent homeonwers insurance.

    Everything is monthly payments – nobody seems capable of budgeting – so we all pay the price. The FHA only makes you save 3%, and makes your responsible neighbors pay when you default.

    Again – I’d be happy with Eric’s suggestion, but I’m not holding my breath. You see since I have no life insurance, it doesn’t make sense to do so.

    • BrentP
      August 21, 2012 at 2:41 am

      People who don’t care about cars just hit others and think ‘insurance will take care of it’. The traffic court system isn’t much different. It’s just more shoving responsibility and effort on to others.

      This system is running out others.

    • August 21, 2012 at 10:02 am

      Blake,

      I really like your point about moral hazard; the way insurance reduces incentives to behave reasonably. Speaking for self, I know this to be true.

      I have the minimum allowable coverage on my trucks – liability only. That means (as you know) if I wreck, I lose the truck, or get to pay for fixing it myself, out of pocket. This in turn gives me an incentive to drive responsibly.

      Your health insurance analogy is likewise spot on. Notice all the morbidly obese people out there? But they’re covered….

  8. spiritsplice
    August 21, 2012 at 2:23 am

    In Japan you have to get insurance on the car (which moves with the car if sold) AND you have to get driver insurance.

    • dom
      August 21, 2012 at 2:28 am

      Yeah, shaken is just weird!

  9. Eddie Willers
    August 21, 2012 at 2:09 pm

    In some Mexican states (such as Tamaulipas), there is no mandatory requirement for conventional insurance. In an accident, one is required to show the fiscal means to cover third-party damage, however, or face arrest and detention while the accident is ‘investigated’.

    The consequence of this, unfortunately, is a much higher incidence of hit-and-run than one might reasonably expect.

    • Rick
      August 21, 2012 at 5:04 pm

      Eric,

      Mich has the no-fault insurance which is ideal for you non-clovers. Since you would be reponsable for your own car, you can have collison, which pays for your own car, or no collison, and take the risk of damage to your own car.

      That way, when I am drunk (pretend I am a drunk driver) driving and total your car, if you have collison, your car is paid for. You do not have to sue me. If you don’t want your car paid for don’t carry the collison and take the risk.

      If you don’t want any insurance, just cancel it. Yes it is againt the law, but take the risk and pay the fine. People do that all the time. But if you do not carry the auto insurance your medical bills will not paid. But again that would be your risk.

      If you do not carry auto insurance, I don’t care, because under no fault, my bills are paid by my auto insurance.

      Rick

      • Brad Smith
        August 21, 2012 at 5:44 pm

        Yep I live in Michigan as well. Definitely not the worst state when it comes to insurance, also no smog checks like Ca.

        I keep PLPD on my daily driver and nothing on the rest of my cars.

      • BrentP
        August 21, 2012 at 6:57 pm

        So someone destroys my property and I have to pay for the damages. That doesn’t seem like a good system to me. Even with insurance that means paying for the risk of everyone else. It subsidizes the risk takers, the incompetent, etc and so forth even more. They aren’t held accountable for the damage they do to others.

        • Rick
          August 21, 2012 at 7:44 pm

          To Brent p.

          It does keep the sharks away. When I am a drunk(pretend I am a drunk) driver and hit you, I own nothing, have no money, run away ect, at least you will get paid with the no-fault.

          As non-clovers have told me they would take the risk of having no insurance so if they hit me I would have to sue them, the sharks take 50% of the settlement, and the non-clovers would declare bankrupsey ect, ect. years down the road, before I see money.

          With Mich no-fault my insurance pays right away, no sharks, and I get the full settlement.

          Worth the extra cost to me, if I elect to carry insurance, and I let my insurance co worry about the other guy. The non-clovers can cancel their ploicys and I don’t care.

          If two non-clovers have no auto-insurance and hit each other, they are free to sue each other, because no-fault is not in effect.

          Rick

          • BrentP
            August 21, 2012 at 7:52 pm

            So you’re saying in a no-fault state I would have to carry uninsured and collision on my car to be paid when a dead beat hits my car, the same as in a fault state. But in a no fault state the rates would be higher for drivers who don’t cause collisions because those that do wouldn’t be racking up claims against them.

            Sounds like lose-lose to me.

          • Rick
            August 21, 2012 at 9:48 pm

            Brentp

            In Mich your no-fault is your un-insured driver insurance.

            In a at-fault state you have plpd to cover when you hit the other guy.

            If you do not have un-insured drive on your policy and you are hit by an un-insured driver you are sol. Look what happened with that Progressive Ins lawsuit.

            That would never happen in Mich.

            In Mich you have the choice of collison
            or no collison for damage from that dead beat drive.

            Now Bret, In an at fault state if you have no un-insured driver on your policy,
            and you are hit by the deadbeat driver, who is going to pay for your car damages?
            Your insurance will not.

            You would have to find a shark to hire,
            but shark will not go in if there is no money in the water from the other driver.

          • August 22, 2012 at 10:03 am

            Hi Rick,

            For me, this – and similar questions – comes down to: Are you willing to accept the possibility that something not-cool might happen in return for the sure thing of freedom?

            Most people seem to prefer the reverse. They want to be “covered” – “safe.”

            Not free.

          • BrentP
            August 22, 2012 at 1:45 am

            So it’s lose-lose. One must still buy the same coverage to have one’s own insurance policy cover the loss when a dead beat is at fault plus pay more because in no fault those not at fault have to pay.

            Classic american subsidy of the incompetent, irresponsible, and the risk taking at expense of the competent, responsible, and risk adverse.

          • Rick
            August 22, 2012 at 4:56 pm

            Hi Eric,

            That is why I said MICH is one of the best states for you non-clovers. You can cancel your insurance, take the risk, let your drivers license expire and live free
            and take the risk of fines.

            As you say, take the risk that something not-cool might happen.

            As you say “live free”. I would not care because I have no-fault.

            The risk of fines for no insurance or no liceses would be based on your driving skills. No accidents, no tickets, no fines because the Police would not know.

            Rick

    • Vasectomised Infidel
      August 21, 2012 at 5:10 pm

      Jalisco began requiring insurance the beginning of 2012. This doesn’t mean everyone without insurance ran out and secured coverage. It only means, they face a ticket if they cannot provide proof of coverage if they are stopped. I have witnessed quite a few drivers being pulled over and their vehicle papers checked. Since nearly all responsible drivers have insurance anyway, this means the cops are spending a lot of their time writing tickets to the drivers of clapped-out cars and trucks who do not have insurance or haven’t paid for their numberplates. Consequently, chicken-shit tickets are way down – which is fine by me.

  10. Brad Smith
    August 21, 2012 at 6:02 pm

    Communist California is the worst state I have lived in. Growing up it wasn’t that bad, but one law after another just made it suck to be into cars. Insurance is sky high and yes you must register your cars, insure them and smog them. I still have one car out in Cali (65 Mustang, straight six less than a hundred thousand miles) I have it buried in one of my uncle’s outbuilding. When I drive back I am almost afraid to pull it out and run it for fear that some dipspit will see it and call the Po Po on me. I’m not really sure how much I owe the state of Ca. and I don’t want to find out. Probably $500 in parking tickets. $2,000 for possession of weed (statute of limitations should have run out on that by now). On the Mustang I got tickets for no registration or insurance as well that I haven’t paid. close to another grand. I lived in Ca. with the tickets for three years and just didn’t get pulled over again. None of them are extradition crimes so unless I get pulled over in Ca. I’m ok. I have no idea what the interest and fines have piled up to be. I suppose if I ever decide to move back again I will need to hire a lawyer and make a deal.

    • liberranter
      August 21, 2012 at 6:29 pm

      I was told by a dealer representative when I bought my Nissan Frontier that Arizona’s insurance rates are, on average, higher than the PSDRC’s. I was dubious at first; even though insurance rates here in AZ are outrageous, they didn’t seem nearly as bad as what I paid in the PSDRC twenty years earlier when I was last a resident there (granted, I was much younger then, which made a difference in the premiums). But then I checked some data tables on line and, sure enough, the Grand Scamyon State’s rates are indeed the higher of the two. I’ve never gotten a clear answer as to why this is the case, but I suspect that 1) the population of elderly (and thus generally higher risk) drivers here is significantly greater than in the PSDRC, and 2) the higher rates of car theft, uninsured drivers (many of whom are “uninvited guests” from South of the Border, who also tend to have much higher accident rates), and the number of accidents are probably a contributing factor. No, none of this justifies higher rates for individuals with no history or profile of risk, but it seems to explain why the Insurance Mafia rigs the scales the way it does.

    • BrentP
      August 21, 2012 at 7:04 pm

      What about hiring a transporter and shipping the car out of state? Get antique plates in another state and be done with it. An old mustang on transporter shouldn’t draw any special attention. Or just register it in another state, go to the car with the new plates and drive it out of CA on out of state plates.

      • Brad Smith
        August 21, 2012 at 8:53 pm

        I have thought of that and I just might do it. I don’t know when I will even get back home though. I would love to have my car back. It’s really nothing special, but it’s mine and it’s full of memories.

        I only paid $1,300 bucks for it and all it needed was new gas tank. No rust low miles. I actually love the straight six. Power nothing, which is good it keeps my wife from driving it. The funny thing about no power steering is that it’s actually nice on the expressway. In a goofy kind of way it’s actually fairly responsive.

        • August 22, 2012 at 10:05 am

          Hey Brad,

          I’m with Brent. If the car’s drivable, just register/tag it in another state, then go to CA, slap the tags on and drive it out of CA. No fuss, no muss.

          Or, just pay a guy to haul it out for you.

  11. MoT
    August 22, 2012 at 3:42 am

    As I said in a previous thread, insurance as a consequence of being in debt to the one carrying your “note” is entirely valid. Especially for the one who may suffer the loss whether or not it is your fault. Now once YOU own it then I see no reason for any mandatory insurance whatsoever.

    • August 22, 2012 at 3:56 am

      My point above, was that without insurance, how many people would then go deep into debt for something not so easily replaceable? If people weren’t required to get insurance on the car or house, how many lenders would lend the money? And if the money wasn’t easy, how many peeps could borrow it?

      Insurance ENABLES debt (mitigating the risk of irresponsibility with the collateral of the responsible), it is not a consequence of debt.

    • August 22, 2012 at 4:28 am

      And if so few people could receive massive loans for cars, houses, schooling, medical services et al…what would that do to the prices of these items? By virtue of not paying the middleman, and companies wanting to open up essentials to broader markets, the prices on ALL of these goods and services would plummet.

      Cars used to cost a couple thousand dollars, brand new. They’d still cost that (or less) today, if it weren’t for insurance, easy loans, inflated money, and unending safety regulations.

      mo’ middlemen, mo’ higha prices.

      • August 22, 2012 at 9:45 am

        Excellent point, Mike.

        It wasn’t all that long ago a new car loan typically was just three years. Now it’s 5-6. Most people are not earning commensurately more money, either.

        Insurance costs, taxes (including property taxes on vehicles) as well as much higher maintenance costs have rendered cars much more expensive to buy and keep.

        • Tim
          August 23, 2012 at 8:01 pm

          but at 0% for 5 years, why not? why would you prepay that loan? assuming you want a new car and you have good credit to get that 0%.

    • August 22, 2012 at 9:48 am

      I agree with both of you (Mike and MoT).

      It’s certainly valid for a lender to require insurance be carried to cover for the potential loss of an item not yet paid for.

      It’s also true, I think, that people would be far more cautious with what they have, what they buy – and to whom they lend – if insurance wasn’t there to crutch “moral hazard.”

  12. August 23, 2012 at 5:07 am

    While I agree most insurance is a bad investment, one should think of it as legal “gambling”. After all, you’re betting you will make a mistake; the insurance company is betting you won’t. It should be no surprise that it’s often a very profitable business — just like casinos.

    I agree the drivers should be insured, not the vehicle. This is almost always a function of the laws in every state. I haven’t researched it but I’d be willing to bet lawyers and insurance lobbyists were the ones pushing for mandatory insurance on every registered vehicle; as they are both rent-seeking industries.

    On the other hand…

    If car enthusiasts were as organized and vocal about stupid automotive regulations as the Virginia Citizens Defense League is about gun regulations, Virginia would right now be on track to implementing just such a major re-thinking of insurance law.

    • August 23, 2012 at 9:45 am

      Hey Marc,

      A fellow Virginian!

      So, of course, you know all about the UMF fee – the Uninsured Motorist Fee. It lets you drive legally without insurance – so long as you pay the state a bribe. Which proves the state doesn’t give a fig about “your safety.”

      Only your money.

      • August 23, 2012 at 12:16 pm

        Hi Eric, yes a fellow Virginian and one who lives right up I-81 from you.

        By the way a few months ago I tried sending you email about speaking opportunities but it didn’t seem to go through. Would love to talk to you about that sometime.

        Yes I do know about the UMV fee. And I’ve considered it in the past. But once again it’s not a practical option because its per vehicle rather than per driver.

        You *can* go both without insurance and without paying the UMV fee in Virginia, least you could last time I checked a decade or two ago. It involves setting aside a surety bond for tens of thousands of dollars. In other words, self-insurance. You put money aside with the state treasurer’s office.

        http://money.msn.com/auto-insurance/never-buy-car-insurance-again-insurance.aspx

        http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+46.2-368

        Insurance companies in Virginia bond you when they insure you.

        There *is* a massive free rider problem (no pun intended) of hit-and-run drivers. If every individual who negligently injures someone were to make whole those injured by his mistakes, I doubt there would be much demand for insurance — maybe even registration, for that matter.

        Reminds me of this scene when Frank realizes it was his car:

        Free riders should be sent to Absolom (see http://en.wikipedia.org/wiki/No_Escape ).

  13. Sione
    August 23, 2012 at 5:50 am

    I am so thankful that there is no compulsory insurance here. The interesting part is that it is the local insurers who have lobbied hard and long againt various “concerned” minding-other-people’s-business types and prevented compulsory insurance from being legislated. That has made insurace rather cheap and somewhat popular as a result. I understand that some 8% of the vehicle fleet is uninsured.

    Anyway, I always figured that if I own a car, and take it out on the road, I do so at my own risk. It is MY car after all. Now there are some immature types who whinge on about the possibility that some impecunious uninsured younger (and usually ethnic) driver might crash into their car. They bleat nauseatingly on about how the uninsured would not pay for the damage (automatically assuming that the fault must lie with the impecunious uninsured young darkie). Then they conclude that everyone in the entire country must be forced to pay instead. I always tell them that if they own a car then they are responsible for it. The risk of damage or loss is theirs to bear, not mine or anyone else’s. Part of that risk is that some impecunious uninsured young driver may well damage said car. Get over it. Touble is they never do get over the lust to impose their cranky ideas upon everyone else. Compulsory insurance isn’t ever going to work out well. It’s a live turd with eyes on it.

    Sione

    • August 23, 2012 at 9:43 am

      Hi Sione,

      I agree.

      I’d much rather accept the possibility that someone irresponsible might damage my car – or even that I might run off the road for some reason and damage my own car – than endure the suffocating actuality of being forced to “cover” not only myself – but others as well.

      Freedom – liberty – entails the acceptance of some risk (and loss) as an inevitable part of life. “Benevolent” authoritarianism tries to – but inevitably fails – to eradicate risk, while eradicating our liberty.

      PS: I also agree with Mark that anyone who damages someone else’s property has a moral/ethical obligation to make it right.

  14. August 23, 2012 at 6:21 am

    Sione, while I agree that insurance should be voluntary, I cannot agree that anyone should escape responsibility for injuring the person or property of another.

    I don’t particularly care about skin color but I do care about careless driving regardless of skin color. In my driving career, I have been involved in six crashes, one of them my fault (I was 18 at the time). My at-fault experience was a single-vehicle incident with no serious injuries except my wounded pride.

    Of the others, one was a thoroughly inebriated senior (65+) caucasian male who ran a stop sign, another was a perfectly sober senior caucasian female (70+) who ran a stop sign, the third was a was another perfectly sober senior caucasian female (70+) turning left onto the same four-lane road I was on but came straight into the right lane I was traveling in and drove me off the road; the fifth was a middle-aged (+-35) caucasian female yacking on her cellphone who rear-ended me at a stop sign, and the last was a middle-aged (40+-) caucasian male who was yacking on his cellphone and backed into the side of my car while I was at a complete stop waiting for a light to change.

    So if I were to generalize about the people who have hit my car, the summary would say they are most likely white, female, and “mature”. The worst hits were the first two — the inebriated old fart totaled my then-new 88 Jeep Commanche.

    Sorry, but those people *should* be required to pay for the damages they caused.

    You don’t cut down a tree so it lands on your neighbor’s house and endanger the lives of his family and destroy his house with impunity — you have to pay for such negligence.

    Just because the box you’re in is moving instead of sitting still on a concrete foundation doesn’t absolve you of the obligation to be a good neighbor to those around you.

  15. Ferret
    August 23, 2012 at 12:22 pm

    This reminds me of the brief period here in Florida when the no-fault law was allowed to expire back in 2007. It was pretty revealing how, at least from my perspective, the state legislators and their associated insurance company lobbyists were scrambling around like rats aboard a sinking ship to renew the law before it expired. I got the impression that it was a shakedown by the legislators to get a bit more pocket-lining from the insurance companies. There was oh-so-much hand-wringing during the two weeks or so that passed before the insurance companies could purchase a renewal on it. Contrary to the dire predictions made in the media, the sky did not actually fall, and the world did not come to an end. However, since the law was, as expected, renewed, pigs were not granted the gift of flight.

  16. Curran
    August 23, 2012 at 12:51 pm

    I agree that auto insurance is a big scam. I own three cars and a moped. I recently received a letter from the state of Arizona, telling me that they were cancelling my registration on my moped because I didn’t have insurance, and for each month that goes by, the cost will keep going up + fees to re-register it. The thing is, is that its in storage. Why should I have to keep paying when its not being used on the roads?
    As for Michigan and no-fault insurance, what a joke. The rates are three times what they should be, and even if another individual causes the accident, they are not held responsible. The PL/PD minimum state requirements for insurance is insurance to protect the profits of the insurance companies. How does it protect the owner of the vehicle? If Michigan is a true no-fault state, then why does a person have to even have car insurance?
    So, logically, if I have an old car, and I have medical insurance, I should just drive the vehicle without insurance. If there is an accident, yes, I lose my vehicle, but that it. Why should I have to pay insurance companies to drive on the roads, and what do I get from them in return. Nothing.

  17. Bill Jones
    August 23, 2012 at 2:14 pm

    “Your premiums are too high. I think I’ll set aside some money for just-in-case instead” – insurance costs would plummet. ”

    We have that in PA. It currently requires $50k’s worth of T-bills in an Escrow account I believe.
    http://www.dmv.state.pa.us/insurance/self_insurance.shtml

    • methylamine
      August 23, 2012 at 2:32 pm

      Same thing in Texas, you deposit $55,000 with the State Comptroller.

      No idea if you can get it BACK when you want to though; and kind of defeats the purpose, since now that capital’s not available to you.

      Once again, damned if you do…

  18. Chris T.
    August 23, 2012 at 2:38 pm

    2 comments:

    a) one of the MOST odious components is, that not just age-group membership is a group-factor, but your CREDIT score.
    Absolutely ridiculous.
    It may actually be true, that somehow one’s credit score CORRELATES to loss severity/frequency, but so what?
    There is prob. a similar correlation for other non-apposite factors, such as race, or BMI, political philosophy, etc.
    Imagine what would happen if BLACK people were charged MORE because of such correlation?
    Yet no such quibbles with FICO.
    Just BS.

    b) I don’t fully agree with the “only from the insurance mafia” arguement.

    There are two components to car insurance:
    the loss you cause to others
    the loss you cause to yourself.

    Only the former is mandatory, not the latter, so the opt-out is only needed for the former.

    Most people actually want to be protected from ALL loss if they are not at fault in it.
    For that reason most people do NOT want to have to pay higher premiums, just so that their own policy covers their loss that someone ELSE causes to them (but who has no insurance or private assets to pay for that loss).

    So they socialize that to others by being quite happy with mandatory insurance.
    No different than property taxes that everyone pays, but the bulk of which goes to school budgets, and thus only benefits those with school-age children.
    Same situation: socialize some of that expense.

    So they agree with the system.

    With a liability opt-out, surely the portion one would have to pay that goes towards covering damage caused by someone else would go up, as the pool of payers is smaller.
    How to address that in such a scenario?

    There definitely WOULD be a positive correlation between people of no or little means being by far more likely to also not have voluntary liability coverage, so if they cause a loss to someone else, that person does get left holding the bag.

    Not saying I disagree with you on principle, but this is a point needing a separate analysis.

  19. Bob J
    August 23, 2012 at 2:39 pm

    My gripe is that they up your rate every time you get a ticket. I’ve never had an accident(I’m 69 years old) and yet in my younger days, every time I got a speeding ticket my insurance went up and I hadn’t cost the insurance company a dime. But, you can get out of the insurance hike if you pay a “Friend of the Politician’s” a fee to go to drivers school. Alaska usually doesn’t give tickets for going 9 miles over the limit but will suddenly give tickets for 2 miles over the limit. The worst thing about Alaska is that the fine goes into the state trooper’s budget, talk about a setup for ripping off the public. We moved to SD because Alaska’s state government is one of the most intrusive in the country and I love Alaska. Because of the former SD governor, Mike Rounds, SD is one of the least intrusive states in the country.

  20. Bill S
    August 23, 2012 at 3:46 pm

    EXCELLENT points. One item that was left out of this article is that Progressive Insurance and Geico are both progressive/liberal/collectivist organizations that use the cash cow of insurance premiums to buy off government and promote colletivism. Both companies believe in fascism and socialized losses—-when they profit they use the money to promote their collectivist, anti-American, liberal causes. However, when the market goes against them, they are first in line to ask for bailouts.

    Progressive Insurance and Geico are both anti-American, evil, fascist corporations that have used catchy advertising to lure millions to give them money which they then use to take away our freedomes. These are truly evil organizations. As with everything, don’t take my word—research the “owners” of progressive insurance and look at the evil, anti-American associations they promote. Then look at Geico, owned by evil Warren “socialize my losses” Buffet—another liberal, progressive collectivist.

    FWIW!

  21. Texas Chris
    August 23, 2012 at 5:30 pm

    I was ticketed in 2001 on the Galveston ferry for having an expired inspection and no insurance(my second of the sort). Being a hard-headed, liberty minded twenty-something, I promptly ignored the ticket, and forgot it.

    Until this year, 2012.

    No problem, I thought, I’ll head down there and pay the fine, no big deal. Then I can get my driver license renewed and go on with life.

    WRONG!

    By pleading guilty to an 11-year-old infraction, I set in motion a bureaucratic chain of events I can only describe as tyrannical highway robbery.

    See, regardless of constitutional prohibitions on little things like double jeopardy, if you neglect to buy insurance in Texas, and get a ticket (twice), you don’t just pay a fine. You pay the court for the ticket, then your license is revoked. You must then buy insurance both for the car(s) you drive, AND for yourself, a policy called an SR-22. Once you have obtained the SR-22, you must pay $100 to the State of Texas to keep the SR-22 on file. Once that is done, the state then levies a no-insurance penalty to reinstate the driver license (for me, $250 broken into monthly payments), which, if unpaid, leads to another suspension of the driver license, and another $100 reinstatement, plus an increase of the no-insurance penalty.

    You must then maintain liability coverage for each car, the SR-22, pay out the reinstatement fee, and get no more tickets of any kind for two years, or the process starts over.

    I have never caused an accident or injury, I have had no tickets in 11 years, haven’t gotten a speeding ticket since my 16th birthday, and haven’t been pulled over in 11 years. But I have spent THOUSANDS of dollars complying with insurance laws this year.

  22. Anonymous
    August 23, 2012 at 5:34 pm

    I live in Mexico and drive a car with expired foreign plates. They have a law here that allows foreigners to drive on expired foreign plates. I have known foreigners that drive around without car insurance here, myself included. I’m a defensive driver and I don’t drink, it’s a good deal.

    • BrentP
      August 23, 2012 at 7:41 pm

      I’ve seen it done in the USA. Used to have a neighbor with Canadian plates. They expired and he was never hassled to my knowledge in that cop heavy town. A co-worker at the time I lived there also drove on Canadian plates, but I think he renewed his.

  23. George
    August 23, 2012 at 6:06 pm

    1) Talk to a knowledgeable insurance agent about a fleet policy.
    2) If you don’t like it start your own damn insurance co. Read “The Farmer From Merna” to see how one person can start an insurance co, in this case State Farm.
    3) Talk to a sharp local agent and see about starting your own insurance program using their agency. If there is enough demand you could grow into an actual insurance co.

    Otherwise people claiming they have a brilliant auto insurance idea come and go. Financial author Andrew Tobias had a ‘pay at the pump’ insurance plan that paid for insurance with a gas tax. There are various schemes involving GPS transponders. ZipCar and other auto rentals are in a sense a personal insurance plan.

  24. Joe
    August 23, 2012 at 6:23 pm

    Then sometimes you have the worst of both worlds. A friend of my sister was hit head on driving to work one morning. While she was in the hospital recovering from her injuries the other drivers insurance denied the claim. The driver had suffered a coronary, and it was his insurance companies contention that he was deceased at the time of impact. While the insurance was on his VEHICLE, the policy itself was a contract with the DRIVER, and expired when he did. She did eventually get at least a token settlement from them but the lawyers got the lions share.

  25. Lynn
    August 23, 2012 at 7:25 pm

    For a while we had 1 car shared by 3 legal drivers in our family. Insuring the 1 car was much cheaper than insuring 3 drivers. In addition, when we bought a 2nd car, it often went months without being driven (while son was at college). During those months we were able to take the insurance off the car…..and put it back on when he was home to use it. Back and forth that went for a couple of years.

    That said, I have lived without medical coverage for 13 years, preferring to spend my $$ on preventative methods and paying out-of-pocket for the (very) rare doctor visits.

  26. Tim
    August 23, 2012 at 7:55 pm

    Life insurance, same thing. i have 2 kids under 4. No .gov is requiring me to get life insurance but my wife stays at home and doesnt work. If i step in front of a train, they are pretty much screwed will have to go on the public teat, most likely. However i have chosen to protect them financially by getting enough life insurance so that in the unlikely event i do die, they will be at least protected. its a 20 year term policy so at least im upside protected on the premium costs. And if i die on year 20 + 1 day, well they dont get a dime but they should also be mostly done with college by then. its mainly for while they are minors. yes i realize that my chances of dying at age 35-55 are very very low given my demographics, I would rather self fund their care than force it on the rest of you via welfare. If NO insurance was required, i would still choose to get insurance, but it would be voluntary, not coerced. Would my opinions be different if i was single with no kids and I rented ? yes. I cant afford a complete loss of my house so I buy insurance. My wife +kids cant afford a loss of me making a paycheck. If i win the lottery, do I cancel the life insurance ? yes. I think the discussion should be about coercion and can you afford to be self insured or not. Forced by the .gov to buy insurance or choosing to contract on your own.

  27. August 23, 2012 at 10:38 pm

    How bout the obverse of this situation! Years ago, a drunk driver ran a red light and slammed into my car. I was driving and my daughter was the passenger. It was a minor miracle that we both were not killed. I had premium insurance on the car by a premium insurance company. The car was totaled. The insurance company refused to pay. It took me over a year and several legal depositions to get the insurance company to honor their contract with me.

    As you know, the insurance mafia will not give you full value for the car, only their estimated value. A friend of mine was hit moments after she drove her new car off the dealer’s lot. She had driven the car 50 yards. This devalued it over $2000.

    Another friend owned a painting company. He had a fleet of trucks. The insurance on these trucks cost him over $40 thousand a year. In twenty years he had not had one claim. The insurance mafia cancelled his policy claiming, “You’re due an accident.”

    • August 24, 2012 at 9:49 am

      Hi John,

      Yup. I bet most people have experienced this at one time or another – or know someone who has. The insurance company will usually try to settle with you for the lowest amount possible – based on their “estimate” of the car’s value. Then it’s up to you to wrestle with them – to try to make your case that your particular car was in much better condition than average, with lower miles, or had recently had major work done – etc.

      They’re despicable and I have nothing but hate in my heart for them.

      • Texas Chris
        August 24, 2012 at 11:24 am

        So why isn’t there an anti-mandatory-insurance organization working to overturn these laws? I’ve often considered starting one here in Texas. I’d call it D.A.M.I.T.

        Drivers Against Mandatory Insurance in Texas.

        • August 24, 2012 at 11:26 am

          Chris,

          It’s a damn fine idea! This is exactly the sort of action people like us ought to be taking. Otherwise, the Clovers will take over.

  28. John Illinois
    August 25, 2012 at 1:43 am

    I would love to only pay liability insurance on me, as a driver, rather than on each of my individual cars (I have a bunch, but insure all but 3 under a collector vehicle policy, which is much cheaper than going with my daily driver company’s “collector vehicle program”). I was in the insurance business for 42 years before I retired. The premiums charged are an aggregate of the costs of what ever group you are looking at. So if you charge per driver only, the premium charged per driver is going up to make the aggregate premium the same. Personal lines insurance is not a big money maker, and for the all lines companies, it is generally a looser. There are a few companies out there that give the rest of them a bad name. I admit I had an unfair advantage in that I knew our claims people, so when I had to deal with another company’s claims reps, I knew the statute’s. When you can hit the guy with statute numbers, especially dealing with “bad faith adjusting”, they knock off the BS. With honest companies, they want to make you whole. Getting sued is not their business, paying the claims is. Admit it, do you want to go to court because your insurance company is fighting something you know you screwed up on? I don’t. If you look like the kind of customer they would like to deal with, they may approach you to switch to them. The adjuster from an honest company also needs to settle the claim, so if it is a simple claim, and reasonable, he actually wants to write you a check, and be done with it. Occasionally, they will ask you to take it to a different body shop, not necessarily one they recommend, although they might recommend 2 or 3, but that is because the guy you have picked has been a problem for them before. There are some companies who do have a certain body shop in their back pocket, but generally speaking, since the adjuster deals with everybody in town, he knows who is the crook, and who is honest.
    You might think about that.
    Personal insurance is a borderline line of business for most insurance companies. You may think that a grand or two is a chunk of money, which it is, to us. I live in a cheap insurance area. I cover 3 daily drivers full coverage, plus 6 collector cars for under $1,000 a year. I have limits far in excess of the minimums. I have assets to protect from other people’s lawyers.
    The cost of issuing a policy for $1,000, other than the agent’s commission, is no different than the cost of issuing one for $100,000.
    The hardest cost to control is what the politicians do to you. If you cold get rid of politicians, and bureaucrats, the costs of most thing would go down.

    • August 25, 2012 at 10:42 am

      Hi John,

      The real problem here is the absence of free choice – the ability to say no to insurance. This is the factor that results in overpriced insurance and the absence of real competition based on free market factors.

      For example: I’m a married guy in my mid 40s with decades of accident-free driving and no claims filed against me. I think I’m a pretty good driver; I’ve taken several road-racing courses, I’m trusted by major automakers with their brand-new cars, including very high-performance (and very expensive) brand-new cars. I get nailed for “speeding” every now and then – but these are bullshit excuses for jacking up people’s rates that have nothing to do with one’s capability or judgment behind the wheel. It infuriates me that I have to pay more – despite my years of accident-free driving – for insurance. I can’t say no. I can’t tell the guy on the phone: Hey, I’ve never incurred a loss. Never cost you guys a cent, either to fix my vehicles or someone else’s. I don’t accept your “adjustment” based on this fucking speeding ticket I got recently. Either you leave my rates as they were – or you can cancel the policy and refund the balance.

      Multiply this scenario times millions of people – and you’ll see why we are all being screwed by the insurance mafia. Because we can’t say no.

      Anytime people are forced to buy a product or service, the cost of that product or service is going to go up – not down. It is an almost mathematical axiom.

      • BrentP
        August 25, 2012 at 7:46 pm

        In Illinois the online traffic school or just going to court will get “supervision” and cut the insurance companies out of the loop. No insurance surcharge for the typical once every year or less harvesting because they state keeps the info from the insurance companies. It’s a way for government to get people to fork over the cash without much protest.

        With the insurance surcharge, people would fight more and that gums up the system and reduces the ‘profit’.

  29. Tre Deuce
    August 25, 2012 at 4:51 am

    Oregon Tried passing a law similar to what you propose, Eric.

    The petition easily gathered the required signatures to put it on the ballot, then the insurance companies went to work, spending millions of dollars to defeat it. And defeat it they did. I wish I could remember some of the ads they used. Karl Rove would have been proud.

    The legislature then tried to pass one and the legislators mostly Republicans and a few Democrats fell under the influence of the insurance lobby and it was defeated again. Those legislators who voted with the insurance companies were rewarded by nice contributions to their next reelection campaign. And so it goes.

    Eric, I don’t know how you can keep up with all of the traffic this site generates. I have a hard time just reading the ‘Follow Up’ comments e-mailed to me this week, let alone comment.

    But I did manage to build the assembly jig, mount the 62′ Old’s 4-dr Htp to it and cut into four pieces, then get the needed parts(Frame & Pan) ready to weld back together next week. The Old’s ‘Deuce Speedster’ is starting to happen.

    If anybody can lead me to a 1956 Chrysler 4-dr. Htp in decent shape, it would sure be appreciated.

    Regards…Tre

    • August 25, 2012 at 10:24 am

      Hi Deuce,

      The insurance mafia is just that – a mafia. It deals in coercion, not persuasion. “Our” representatives, meanwhile, are up for bid. And ordinary citizens aren’t even permitted a seat at the table. The system is not only evil, it is pathologically corrupt.

      My object is to get as many people as possible to see this – in order to delegitimize it.

      And we are making progress.

      • Tre Deuce
        August 25, 2012 at 5:55 pm

        ‘CONSUMPTION’ And ‘COERCED’ CONSUMPTION.

        CONSUME or DIE. Your unworthy if you don’t CONSUME.

        Great post, as always, Eric….Kudos!

        • August 25, 2012 at 7:07 pm

          Thanks, Deuce!

          Keep us posted on the car, by the way….

  30. Larry
    August 28, 2012 at 5:02 pm

    While I agree that insuring the driver is a better idea than every car, I disagree that mandatory coverage should be abandoned on the assumption everyone will be responsible to have money set aside to cover damage or injuries due to an accident. You’ll take the money out of the hand of the insurance mafia and put it in the hands of the lawyer mafia, because that’s what you’ll need in order to collect.
    My legally parked car was hit by a driver who had the cops call the “big 3″ – no license, no registration, no insurance. Guess who was on the hook to fix my legally parked car? ME!
    None of the fines this guy was hit with went to restitution for me or the owner of the other legally parked car he hit.
    So my choices were”
    1. Go to court to seek money form a guy who probably had nothing.
    2. Report it to my insurance carrier and watch my rates go up.
    3. take it in the wallet.
    Sadly, for most people mandatory insurance is the only guarantee law bidding honest people like me don’t get hosed

    • August 28, 2012 at 5:48 pm

      But Larry, don’t you see?

      How would mandatory insurance have helped you, since you admit “the guy probably had nothing” (and had no insurance, despite “the law”)?

      Such people will always be out there – law or no law.

      All the law does is create hassle and expense for the people who are not the problem.

      • Prince Draxx
        August 28, 2012 at 6:07 pm

        I believe the equitable solution to the insurance problem is to determine how much liability insurance should cost and add that amount to the price of a gallon of fuel.
        By doing this you remove the threat of an uninsured motorist and also take one of the insurance companies’ favorite way to screw their customers; “Uninsured Motorist Coverage”. This coverage, which by its very name is totally ridiculous in a state that requires all motorists to carry liability insurance, costs me more than liability and enough that I can’t really afford collision on my 12 year old truck.
        They have it in California, one of the few things I found there that I approve of. And yes, I know that having the government involved in it will push the price up, but the fact is it would probably save me 50-75% of what I pay now.

        • Texas Chris
          August 28, 2012 at 8:59 pm

          Every time the government starts a program like that they end up spending the cash that comes in. Then, when the system is out of money and you need it to fix your car, it’s not there.

          Never trust the government to hold your money for you. Never, never, never.

  31. Whistlewing
    April 25, 2014 at 11:50 pm

    And the Canadian Government is in bed with all insurance companies. The more that can be charged for insurance premiums, the more the government gest in their Goods and Services Tax (H.S.T.) that is charged on all insurance premiums, thanks to the Liberal Government implementing all services to be taxed!

Leave a Reply

Your email address will not be published. Required fields are marked *