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In reply to curtis73:
you can self insure, in texas you have to file a certificate of deposit with the state equal to the minimum liability coverage required.
you are also proposing that the government step in and require someone else to take out a loan against their property to repay you in the event that they wreck your car, but also complaining about the government requiring you to purchase insurance in order to drive.
curtis73 wrote:You guys are thinking so deeply in the box.
+this
I asked the original question as a serious "How it got to this point" and I like the thought experiment.
In a perfect world - nobody would need insurance because we would all be able and willing to pay for the ramifications of our mistakes. In the world we do live in - we pay such a huge price to protect ourselves from the corruption we have created for ourselves. Every once in a while its nice to entertain the "What if", if for nothing more than to acknowledge that the boundaries we think are there - are really just because we are afraid or unable to face the real consequences.
[cue song] Freedom is just another word for nothing left to lose...
you are also proposing that the government step in and require someone else to take out a loan against their property to repay you in the event that they wreck your car, but also complaining about the government requiring you to purchase insurance in order to drive.Correct, however I am saying that if the government forces Cletus to take a loan to pay his damages, that's a darn sight better than if the law requires him to line the pockets of an insurance company prior to his causing any damage. Its like putting you in jail just in case you commit a crime next year.
Now... if the government made me pay into one of those accounts like they do now for medical care, that's a different story. The money is still mine. Of course the financial institution gets their cut by using my money, but the principal and interest is mine.
Actually Curtis73, you should like insurance companies. It's like living in a collective. They take in money from a group of people and pay it out to those in need. I've been driving now for 31 years, and what you pay out in insurance really isn't that much compared to what they can pay out if you screw up. And they pay out a lot every year.
It really irks me when people really believe what they hear about how bad companies like insurance, drug, etc. are, when in reality, they are no better or worse than most others, and a hell of lot better run than our own government. (look at profit statements) And the reason for most of these to be required is the failure of others in the past to live up to their responsibilities. Our court systems get choked up due to issues arising from failure to pay, and then everyone remotely associated with it gets sued.
I used to have a customer that built roads. They had several full time employees that did nothing but go to court every day, as anytime a wreck resulted in a lawsuit, they were also named. How much money does this add to the cost of building roads? How much does it add to city government costs? How much to insurance companies? If you really look at it you will see that requiring basic coverage will help reduce costs for all of those involved. And it benefits you in helping them not to have to raise your taxes. Obviously it is still your right to sue, but it does reduce the load.
There are plenty of laws I don't agree with, but this is not one of them. If you take it away, those that need it most would be the ones least likely to have it.
curtis73 wrote:Correct, however I am saying that if the government forces Cletus to take a loan to pay his damages, that's a darn sight better than if the law requires him to line the pockets of an insurance company prior to his causing any damage. Its like putting you in jail just in case you commit a crime next year.
except, his insurance payment is not the full amount of his coverage. he's not paying 65k every year to the insurance company, but his insurance could very well have to pay that, or more, to someone else on his behalf.
if he has to take out a loan, its likely going to be a helluva lot more than $40 a month for liability coverage to pay for. then you have to factor in what it could cost him if he were to have more than one accident, or wreck more than one car in an accident, cletus could very well be on the hook for more than his lifetime earning potential.
Strizzo wrote:except, his insurance payment is not the full amount of his coverage. he's not paying 65k every year to the insurance company, but his insurance could very well have to pay that, or more, to someone else on his behalf.
So, insurance companies are in the business of losing money? I promise you that on average you pay a hellofalot more TO the insurance company than they pay out in benefits. So person "A" never has a single insurance claim and pays premiums for 30 years. The insurance company wins. Person "B" signs up, pays one premium, and then flattens a pedestrian. Bummer, but I promise you the average swings toward "A". If it didn't, insurance companies would be a charity.
They take profit hand over fist, my friend. I'm all for that. There is nothing wrong with profit. It doesn't make them the "bad guy." Let the squirrel get his nut, but I'm rather violently opposed to the government requiring me to "invest" in a company where my money lines their pockets so thickly
curtis73 wrote:Strizzo wrote:except, his insurance payment is not the full amount of his coverage. he's not paying 65k every year to the insurance company, but his insurance could very well have to pay that, or more, to someone else on his behalf.
So, insurance companies are in the business of losing money? I promise you that on average you pay a hellofalot more TO the insurance company than they pay out in benefits. So person "A" never has a single insurance claim and pays premiums for 30 years. The insurance company wins. Person "B" signs up, pays one premium, and then flattens a pedestrian. Bummer, but I promise you the average swings toward "A". If it didn't, insurance companies would be a charity.
They take profit hand over fist, my friend. I'm all for that. There is nothing wrong with profit. It doesn't make them the "bad guy." Let the squirrel get his nut, but I'm rather violently opposed to the government requiring me to "invest" in a company where my money lines their pockets so thickly
Sound of game show buzzer going off
Buzz....dead wrong. Auto insurance companies do not make profits hand over fist from premiums. In fact, an insurance company that only pays out $.99 for every $1.00 in premiums they bring in is considered to be doing well. Many operate at paying out over $1.00 for every $1.00 in premium they bring in. How do they make their money, you ask? Investments. They invest the money they bring in. There are very few lines of auto insurance where they make a decent profit straight off the premium paid....classic car insurance is one of them. My current company doesn't write classic cars, but the last one I worked for did. If I recall, they actually made a decent profit off premium dollars...but that book of business is very small, essentially a "drop in the bucket" of the overall business.
madmallard wrote:Zomby woof wrote:In reply to Giant Purple Snorklewacker:
We have public health care, so I'm paying twice?
I think auto insurance is backwards. You should buy insurance to cover yourself only, like house, and life insurance. Then it wouldn't be mandatory, and I wouldn't have any.
public healthcare taxes are not collected on the expectation of people getting hurt in car accidents. Socialised medicine is not accidental medical coverage, that money has to come from somewhere.
If the accident has absolutely no liable party, then more medical taxes have to be raised to cover that cost.
If its a car accident with a party at fault, the state will seek to recoup the medical costs from the at fault party or their relevant insurer.
This far to sensible a post to be taken seriously.
Klayfish wrote:Sound of game show buzzer going off
Buzz....dead wrong.
First of all, I appreciate the condescension. Your objectivity gives me a warm fuzzy feeling just thinking about the potential productivity of this discussion. 
Different insurance companies make their money in different ways. Some charge huge premiums and invest less. Others charge smaller premiums and spend a large amount of effort on aggressive investments. I've been in your shoes before - both as a business owner and as a market investor.
AND, NONE OF THIS CHANGES MY ARGUMENT AT ALL. I don't give a flying turd how they make their money. Its a capitalist economy, let them make as much money as they can. But the government forces me to supply the principal upon which they profit massively.
Let me put my own capital into my own "secured insurance" account and let ME make that profit if I so choose. Don't force me to give it away on a fixed schedule to line your pockets when there is no fixed return on my investment. I can accomplish the same thing with an insurance account and pocket my OWN interest and profit.
I can't imagine not wanting insurance, much less resenting a "requirement" to do so. In my state, at least last I checked, drivers are not strictly required to have any kind of auto insurance. However, if you elect not to, you must file an affidavit of personal responsibility with the DOT/DOR.
Insurance, at least in the automotive insurance world, can cover so much more beyond the mere medical and property damage related expenses, including other lawyers paid by the insurance company to litigate their liability, not yours. They don't represent you of course, but your interests are closely aligned in many cases. Not always, but often.
I'm not rich. I have nice enough E36 M3 to care. I'm covering it with insurance.
The tort/legal system and the insurance system are not a new invention, and the associated theories of liability are not recent or american inventions either. It goes back a long way, to at least address the original question, being how did we get here? Insurance, much like the ability to incorporate, has done incredible things to advance society. We didn't just get here, it goes way back to before the East India Company.
The shifting of burdens and the taking of chances...
Now, we can talk about the refusal of insurance companies to pay claims in bad faith, and I will join anyone in being totally pissed off.
curtis73 wrote:Klayfish wrote:Sound of game show buzzer going off
Buzz....dead wrong.
First of all, I appreciate the condescension. Your objectivity gives me a warm fuzzy feeling just thinking about the potential productivity of this discussion.
Different insurance companies make their money in different ways. Some charge huge premiums and invest less. Others charge smaller premiums and spend a large amount of effort on aggressive investments. I've been in your shoes before - both as a business owner and as a market investor.
AND, NONE OF THIS CHANGES MY ARGUMENT AT ALL. I don't give a flying turd how they make their money. Its a capitalist economy, let them make as much money as they can. But the government forces me to supply the principal upon which they profit massively.
Let me put my own capital into my own "secured insurance" account and let ME make that profit if I so choose. Don't force me to give it away on a fixed schedule to line your pockets when there is no fixed return on my investment. I can accomplish the same thing with an insurance account and pocket my OWN interest and profit.
The buzzer comment was actually supposed to be a joke. No offense meant. Hard to convey in typing.
Anyhow, I suppose the discussion could go on endlessly. But I'm not sure if you're in the auto insurance business, but I don't know of any company that charge huge premiums and invest less. Like many other industries, auto insurance it is cut throat competitive, and if a company charges more premium just to try to "line their pockets", they'll go out of business in a HUGE hurry. And profits aren't massive...if they were, I wouldn't be searching GRM for cheap deals.... 
I hear your point about being "forced" to buy insurance. But again, it comes back to the fact that you're not being forced. Your option is to not own a car. The reasons insurance is needed has already been discussed in this thread to death. Namely, since lawsuits are allowed, someone needs to pay for the big settlements. And very, very few of us can afford to pay those on our own.
See, now do you feel warm and fuzzy? 
You can go "bare" if you want to or just have minimal ie state required coverage but if you have been reading this thread, you should realize that what in essence you are doing in buying insurance is protecting yourself and your future. I recently handled a case in which the UM coverage was the only substantial insurance available and it was $100k. Medical bills alone were over $130k and the insured had not worked since April 1. Medical subrogation to the employers carrier(self-funded btw) was over $30k plus there was a hospital lien for over $56k. I was able to negotiate (with a sob story) both the subrogation and hospital claims so that the client would at least get some money in his pocket for the pain and suffering and loss of income. My fee which I cut to help out the client paid for the Elise.
That story is very typical and luckily for the client, all insurance companies cooperated so we were able to close his case in 6 mos or so. Most arent that lucky and the case drags on for 2yrs while an uncollectible judgment is obtained against the under-insured driver. I can tell other war stories but this one alone should convince you that you need the insurance racket. In fact, I would say that most of the people on this list need more insurance than they have right now. I am not sure that my $3m umbrella is even enough.
Start your analysis by checking to see what your property damage limits are: $25k? How many cars on the road are worth $25k? Yeah, raise that limit substantially. Now lets look at your UM coverage. Reread the above story and decide if you have enough. Ask your agent about an umbrella policy if he hasnt already suggested it.
Do I like paying this insurance premium? Hell no but I am going to protect myself, my family and my assets. It can happen to any of us.
fastmiata makes a good point. A few years back I reviewed all my policies and raised them substantially. Guess what? The rise in cost was negligible.
Unlike say riding a bicycle, when we drive a car we are always at risk of causing HUGE damage to others around us, even to the extent of causing their death. It only makes sense to protect ourselves as much as possible. Along with us, our family's future may depend on it. What requiring you to carry that kind of insurance does is to protect you an others from financial disaster, and reduce the costs for everyone involved.
Just another quick note, how many of you have checked to see if your coverage provides for an air ambulance if needed? Some do not and have you seen the cost of that? You shouldn't be shocked if you receive a $10k bill for that in some instances. I'm just saying....
fastmiata wrote: I was able to negotiate (with a sob story) both the subrogation and hospital claims so that the client would at least get some money in his pocket for the pain and suffering and loss of income. My fee which I cut to help out the client paid for the Elise.
I'm tellin' ya, sometimes it's hard to be on my side of the fence...plaintiff attorneys driving Elises, and claims guys like me driving old beaters... 
The Elise is near the top of my "bucket list" cars....
curtis73 wrote:Strizzo wrote:except, his insurance payment is not the full amount of his coverage. he's not paying 65k every year to the insurance company, but his insurance could very well have to pay that, or more, to someone else on his behalf.
So, insurance companies are in the business of losing money? I promise you that on average you pay a hellofalot more TO the insurance company than they pay out in benefits. So person "A" never has a single insurance claim and pays premiums for 30 years. The insurance company wins. Person "B" signs up, pays one premium, and then flattens a pedestrian. Bummer, but I promise you the average swings toward "A". If it didn't, insurance companies would be a charity.
They take profit hand over fist, my friend. I'm all for that. There is nothing wrong with profit. It doesn't make them the "bad guy." Let the squirrel get his nut, but I'm rather violently opposed to the government requiring me to "invest" in a company where my money lines their pockets so thickly
like has been said several times by several different people already, nobody says you have to buy insurance because nobody says that you have to own and drive a car to and from wherever you're going. there are plenty of well dressed professionals waiting at the bus stops that i pass on my way to work every day, if they don't have a car, they don't have to buy car insurance.
like was also said, companies that charge higher premiums that the other guys lose business fast. some new companies came into the area my g/f worked, and started writing policies at way below what they could offer, simply because they had not revised their risk level in that area yet after hurricane Ike. they were losing long-time big customers left and right.
The buzzer comment was actually supposed to be a joke. No offense meant. Hard to convey in typing.
No worries. I tend to get a bit defensive of my existential anarchist ways 
My apologies as well.
And profits aren't massive...if they were, I wouldn't be searching GRM for cheap deals....
I think of that from time to time here at the repair shop. My last boss paid me terribly, but he drove a new Rover. The new boss pays me very fairly and drives a GMC Yukon with 210k on it. But given the work I did for the old boss lining his pockets while I looked on Craigslist for free firewood to cut down on my electric bill just didn't sit right.
I hear your point about being "forced" to buy insurance. But again, it comes back to the fact that you're not being forced. Your option is to not own a car. The reasons insurance is needed has already been discussed in this thread to death. Namely, since lawsuits are allowed, someone needs to pay for the big settlements. And very, very few of us can afford to pay those on our own.
Its true, I have the option to find alternate transportation, but when the government requires me to be insured in a certain way it just loses its capitalist flavor to me. I liken it to this analogy that my friend used once: Its like the government requiring me to buy a certain quality of toilet paper so as to protect my ass and the asses of my guests. I have the option not to have a bathroom, but I should have the option to choose making my own toilet paper if I have the resources.
See, now do you feel warm and fuzzy?
Not yet... I want a hug first.
