I used to be with a mutual insurance, which was still actually a mutual insurance, meaning the customers were also the shareholders. I got a small dividend most years out of whatever surplus existed.
Wish we could have that for fire insurance in California but the company would go belly up by the end of the month.
I first thought of starting a nonprofit insurance (all kinds) 40 years ago. It really is that obvious a market. Risk pool is always better when it’s bigger. Obama care did something, but not enough.
How insurance should work: Disasters are unpredictable, are bound to happen and can be very expensive to resolve. So instead of each individual risking bankruptcy for participating in a system, everybody pools together money at a much lower individual cost. That money goes toward a statistical guarantee that the cost of any disaster will be covered.
How insurance actually works (under capitalism): For-profit companies use every tool at their disposal, regardless of ethics or legality, in order to take as much of your money as they can possibly get away with while simultaneously paying out as little as they can possibly get away with, and then pocket the difference.
Why people think first part is great for insurance, but when somebody wants to scale that up its suddenly horrible socialism.
America basically has socialised healthcare already. It’s just funneled through a 3rd party first, who jack up prices. Where do they think those premiums are going?
"When you pay the government, you’re paying for other people’s care. The taxes will go up when more people use and abuse the system and probably won’t even be used for healthcare, and will just be used for something equally unimportant to me like feeding someone elses children in a state I don’t even live in. When I pay a private insurance company, I’m only paying for me. The rates only go up when the insurance company deems it necessary. The profits go to the people that really deserve it, you know? The hard working executives.
🦅 'murica
How dare you.
everybody pools together money at a much lower individual cost
Another example of this is would be public transport.
The province I’m in has socialized car insurance through a crown corporation. We all pay relatively the same rate, and there are discount tiers applied based on years of experience. If they have a good year of low payouts we get rebate cheques because its not a profit corp.
That’s the way you do it, if it must be done at all. And despite my antipathy towards cars, it seems it must.
I would think it would disincentivize driving?
Drive less > less chance of accident > fewer payouts > bigger refund check > adjust forecast lower for next year > lower premiums > GOTO 1
Or maybe it’s closer to zero sum. because some think that way while some asshole cough Alberta uses the money on extra tires and gasoline to drive even more.
Not surprising that the refund check doesn’t reduce driving in practise. If memory serves - you can’t reward a behaviour into extinction, just like you can’t punish a new behaviour into existence.
At least, that’s if you credit what they teach in applied behaviour analysis courses. I don’t get to use my degree much, except at times like this.
Why would you pay for a car to not drive it but instead collect the refunds? It would be cheaper to not have a car. I think it would incentivize driving more as the premiums are low and when that causes premiums to rise higher it would disincentivize owning a car.
What happens if they pay out more than forecast?
Then there might be a rate increase for everyone in subsequent years, but not your current contract.
Or not to build homes in a place called Tornado Alley, for example.
The idea is when everyone pays into insurance the collective fund is used to pay for the costs any individual wouldn’t.
Thankfully accidents or thefts don’t happen to everyone, but if they do you usually get more out than you put in (personal liability is usually millions of dollars, nobody puts that much in individually).
Where this goes wrong is when fraud happens or insurance companies are incentivized to manipulate rates to increase their profits.
Where this goes wrong is when fraud happens or insurance companies are incentivized to manipulate rates to increase their profits.
I’d say the problem is that insurance companies can take profits above operating expenses at all. These should all be strictly regulated (if not entirely state-run) and predicated on funds going to reimbursements for expenses + minimal admin overhead. If money is leaking out the window to shareholders via dividends and stock buybacks, its effectively being embezzled from policy holders.
There’s an argument for maintaining a reserve (think about disaster prone areas for things like floods, hurricanes, etc…), but I agree that it would be better for insurance organizations to be prohibited from being publicly traded (private or public benefit corporation only)
There’s an argument for maintaining a reserve
In a federalized system where you print your own currency, there’s really not. Insurance premiums become a deliberate dampener on economic growth that offsets the possibility of future spending (and subsequent inflationary risk) during a large disaster, and an incentive to mitigate risk in order to reduce expenses.
But there’s no money in simply holding cash in reserve. That’s why private insurance companies typically try to parlay their premiums into investment ROI. The real money in running an insurance company is what you can do with all the cheap cash you’ve collected while you’re sitting on it, with the expectation that you won’t need to pay it all out again any time soon.
A public system wouldn’t need to hold cash in reserve that it can print/loan itself at ZIRP. And it wouldn’t need to seek private ROI ahead of inflation or to pay off private investors in order to mitigate the risk of holding large volumes of cash for a long period of time. But - most importantly - a public insurance program attached to a large state/federal government has a financial incentive to mitigate risk on travel that it can combine with actual public policy to improve the economy overall.
Rather than just insuring a house or a car, state officials can implement public works that reduce the risks of flooding, provide emergency relief during natural disasters to mitigate loss of life, and reduce instances of highway accidents / fatalities. Instead of simply outsourcing and privatizing the risk management aspect to an independent contractor, they can attack the problems of social risk holistically, then set policy prices to reflect the risk-adjusted negative externalities of cleaning up a mess created by risky individual behaviors.
Rather than just insuring a house or a car, state officials can implement public works that reduce the risks of flooding, provide emergency relief during natural disasters to mitigate loss of life, and reduce instances of highway accidents / fatalities. Instead of simply outsourcing and privatizing the risk management aspect to an independent contractor, they can attack the problems of social risk holistically, then set policy prices to reflect the risk-adjusted negative externalities of cleaning up a mess created by risky individual behaviors.
Uhhh, that sounds like socialism
No better way to reduce car accidents than to kill 100 Zillion people.
In my Canadian province car insurance is government run and if you’re a good driver your premiums and license fees are reduced
Must be nice
It is. I’m in one of those provinces. We get rebate cheques if they take in more cash than outgoing.
We also had an accident where somebody turned into us, but no witness. The insurer of both parties is identical because its the same for everyone, so they did a 50-50 fault and we both get our car fixed with no premium changes
We also had an accident where somebody turned into us, but no witness.
I mean, in my experience that’s the point where you put in a call to the local PD and get it reported, so the accident doesn’t go on your record. If their car is t-boning your car, its a pretty clear-cut case of them being at-fault.
But if it was minor and folks were in a hurry and nobody cared, I definitely get it. Nice to live in a country that friendly and chill.
Police don’t come for accident here, unless it is really major or injury. There’s no suing each other or an opposing insurance, so a police report becomes irrelevant.
I though a side dent would show other person at fault, but the insurance company said an alternate way is person is already turning and instead of yielding to traffic in a turn you speed ahead. I felt like arguing it, but since it doesn’t matter we just let it be.
I don’t understand why we don’t have nonprofit insurance. It would be cool if someone started one that focused on serving poor people.
Where’s the disincentivization for manipulation?
Not all markets are the US.
Ideally you have an independent regulator who makes sure there’s competition, and if the industry can’t keep up it gets cleaned up into a well regulated government entity.
Even the US has things like Medicare/Medicade. That is, government run services that are supposed to just be a service, not a profit-making activity. Funnily enough, they don’t have the same issues.
They made issues, unfortunately. Medicare Advantage (latest iteration) has private contractors handling your care which the government reimburses, and Medicaid varies from state to state, with some covering more and others far less (and some having similar arrangements with private contractors).
In theory: Public backlash leading to competition taking market share, and regulatory penalties.
But what about the shareholders? Gotta pay out them sweet sweet dividends.
Mutuals and professional body insurances are a thing to.
I have to wait to get hit???
I’m guessing she hasn’t figured out the concept of insurance fraud…
And if you don’t pay it you can’t legally drive a car. And if you can’t drive a car, you aren’t going to be hired for a job.
I repeat, YOU ARE REQUIRED BY LAW TO GIVE A CORPORATION MONEY IN RETURN FOR NOTHING IF YOU WANT TO PARTICIPATE IN SOCIETY
Car insurance is a fucking scam.
You don’t have to drive, you can take the bus, ride a bike, use taxis/rideshares, etc. Plenty of people get around without a car. My area is pretty poor for carless living, yet I did it for a few years.
Car insurance is to protect others from you, and a lot of it is due to medical costs and lawsuits. Without insurance, one accident would financially ruin you and the person you hit, so it’s a good thing people are required to have it to drive on public roads.
I will say there are lot of areas of the country where things like biking and bussing aren’t feasible and I empathize that people don’t have that level of convenience.
I will also say that there are many areas of the country that do have bus service or could bike to work and refuse to try it.
And many people could move across town or something if a car-free lifestyle was important to them.
Having a car is a choice in many parts of the work world, and making a different choice can be uncomfortable and require effort. But it is a choice.
i’v been nearly everywhere in america, and this very obviously not true for large sections of the country…deliberately so
I’ve been in a number of places in America as well (not everywhere), generally in places that are explicitly not convenient to live carless. For example, I grew up in the suburbs of Seattle, before the nice train lines were put in, so the only option was the crappy bus line that didn’t go anywhere. My sibling still lives there, and they biked to work for a few years, despite the infrastructure there sucking for it. I live in the suburbs of Salt Lake City, just out of reach of the train system, yet I was able to bike to work for a few years. My in-laws live in the suburbs of LA, which has notoriously bad mass transit, and I’ve seen people there cycling to work.
I don’t cycle or take transit to work, but I could if I really needed to, it would just take about 1-2 hours each way to get there vs 30 min or so by car.
If you look for solutions, you’ll find them. If you look for excuses, you’ll find them. Either way, it’s a choice you’re making, whether consciously or not.
i’m not talking city suburbs, i’m talking that town in the middle of nowhere USA whose name nobody remembers, that only exists because of the local trucktop. with a 4 lane highway splitting the whole town in 2 and no pedestrian crossing on that roadway at all.
cross that on foot/bike and you risk your life
Eh, I have a different sibling in an area like that. They live right off the highway about 10 miles from town, the highway has no sidewalk, and road speeds are typical highway speeds (about 60 mph). Yet they ride into town all the time. It’s not as small as the type of town you’re referring to (my sibling’s city has several thousand people, and the larger town has 20-30k people), but it’s about the same setup.
Yes, car-free living isn’t practical in many areas, but it’s practical in a lot more areas than most people give credit for. And it’s possible to move if that truly is the lifestyle you want.
Again, my point is that you’ll find whatever you’re trying to find, be that solutions or excuses.
I mean, you could hold a few hundred thousand in a surety bond instead, but who can actually do that?
People who got paid a fair wage before wealth inequality spiraled lol
no they didnt
Go learn about the change of proprtional wealth since the 1970s that coencides with the creation of the super rich class.
Wealth inequality did not used to be this bad.
im well aware of that, but even pre-70s people didnt stack cash in a surety bond to avoid having car insurance.
The USA has ~23 million millionaire households. So many people could do that.
It seems that one can pay a percentage of the bond amount as an annual fee, avoiding having to put up the fully amount. I have no idea if that is a good idea, and I have no finished reading the link I posted.
When would some want to do this over having normal liability insurance? Maybe if they drove very little.
Idk what country you are in, or where you live, but you are absolutely not required to drive a car to participate in society. A car is a luxury item, a privilege. Car companies have been brainwashing the public for a hundred years with pro-car propoganda so it may seem necessary but it definitely isn’t.
Trains, trams, busses, taxis, bikes, walking. These are all options available to pretty much everyone. No insurance required.
Now that I think of it, at least where I live the level of insurance you actually need to legally drive is included in your registration.
So maybe what you’re saying true for you and whatever area you live in, but it’s definitely not universally true
YOU ARE REQUIRED BY LAW TO GIVE A CORPORATION MONEY IN RETURN FOR NOTHING IF
You aren’t, actually. You can obtain a Financial Responsibility Bond in lieu of insurance. An FR bond is where you deposit a certain amount of cash in an interest bearing account. If the courts determine you are responsible for damages accrued while driving, and you fail to pay those damages directly, they are taken out of your FR bond.
What fucking black magic are you dropping here so nonchalantly? I’m looking this up, and I’m going to be very upset if you’re right.
Every state has this. It’s not commonly used, but it does exist. In my state, you need to deposit $30,000 with the state treasurer. When you stop driving and no longer need it, you can withdraw it.
Look at the “bond” section of your state’s proof of financial responsibility requirements.
No it’s not, mandatory insurance of cars is there in case you do something, is it better if you get into accident and go bankrupt instead?
Agree about having to own a car but that’s a North America problem, even then there are some cities where you don’t need to own a car
Need a new paint job? Get in an accident. Check engine light? Get in an accident.
I am not a
lawyerperson whose advice should be listened to on anything, ever.What op is describing is called “self insured”
Also called “illegal” in most places.
And the flying is, it was much cheaper when it wasn’t mandatory. Liability insurance used to be super cheap because people didn’t want to pay for insurance that didn’t cover their own car. But when states started mandating liability insurance the price skyrocketed.
What grinds my gears though is being required to have liability insurance for every car even though the car itself isn’t covered. I’d love to daily drive a super-efficient electric car, but I teach scuba on the side and once or twice a week end up having to haul a bunch of dive gear in my cargo van. But with the cost of liability insurance, I can’t afford to keep my van as a beater weekend driver when the time comes to get a new daily driver, so I’ll have to buy another fuel-guzzling murder machine that I mostly drive to an office job downtown.
Liability insurance: legally required.
Also liability insurance: costs hundreds and the price gets jacked up every few months because fuck you.
Imagine somebody without liability insurance hits you with their car, breaking your spine. And they don’t happen to have any spare money. You’d have to remodel your home for accessibility on your own dime.
Why does that person not have insurance? Statistically, because they can’t afford it. Your example is a failure of society and how for-profit insurance is structured, not because an individual chooses not to be insured.
Yeah, it sorta is. Also, if you can’t afford insurance, you can’t afford a car.
Too bad a car is required for the vast majority of working folks just to get to their job that would pay for said insurance along with everything else they need in life. Guess they can’t afford to live either. Seems like a great system.
Guess they can’t afford to live either. Seems like a great system.
Yes, the system is fundamentally broken and designed to screw over the little guy.
Except your city isn’t walkable and poor transit… So you can’t afford not to drive.
Not what I was saying, and goddamned if I’m not too tired to argue.
Protection racket.
Insurance has its place. How much it costs, how much they fight to help you when it comes time, those are the problems.
The fact that for-investor-profit insurance companies exist are the problems.
The fact it’s run for profit AND is a mandatory requirement to having a car.
If it wasn’t required the cost for those who pay in to cover uninsured accidents would be much higher. But I do agree that like many other things, if we nationalized the cost and eliminated profit we could drop the individual price. It would also help to use federal influence to provide other means than individual cars for transportation, less cars resulting in less risk on the road.
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and one that is subsidized by taxpayers anyways.
If it were a socialist systemic thing, and we rephrased it to, we all contribute a little each year and it goes into a pot for anyone who needs their car fixed, who contributes? (but then you gotta erase the evil corporation that rakes in billions and pays ceos unimaginable money)
And the best part is it’s mandatory!
Gotta pay the capitalism toll.
Well, only the liability part and that sorta makes sense
So the person who hit you and totaled your car can hire a lawyer and sue the shit out of you, which your insurance will settle out of court for an undisclosed sum, and they get to walk away with the money, you get Jack shit, and to top it all off, you don’t even have a fucking car anymore.
Don’t get me wrong, I’m in favor of insurance when it comes to 1000+ lbs death machines that go barreling down the road at speeds faster than the fastest land animals as part of normal usage, while packing more kinetic energy than a high caliber bullet.
… It’s just… Those laws aren’t there for you, they’re there to protect the rich. After all, you might hit their Porsche with your Honda, and they don’t want to pay for that.
I mean if they hit you, then their insurance pays. Maybe it’s different on your continent though.
If someone with money hits you, your vehicle, or even your life, has a value that is predetermined by the insurance companies by whatever policy you get.
The middle and upper class can afford comprehensive insurance so if they are found at fault for hitting you then they still get a payout.
If you hit them, they get a payout.
If you’re poor and can only afford liability insurance, your best hope is that someone is found to be at fault for hitting you, and you get a payout. If you hit someone else, you get jack shit, and they get a payout.
The fact is, they are unlikely to be found at fault, since the rich and powerful have long since paid off the cops who write the incident reports. So if they’re at fault, then the record says nobody is at fault. But if they can spin it so that you’re at fault, then you’re at fault.
Honestly, it’s the main reason I own a two channel dashcam. I don’t want to get fucked by some rich asshole, who lied to the police to make a collision seem like I’m at fault. If I’m genuinely at fault, then fuck me I guess. I can accept that I fucked up.
I try to look at this shit from all angles, and all I ever see is that the ones that always win, is the insurance companies. 10 out of 10 times, and the rich bastards with the best insurance policies come in second place. The rest of us are a distant third, we stand to lose the most and gain the least, even if things are in our favor.
The dash cam is a great idea always.
Anyway, my original point was that nobody is forcing you to insure yourself, only the danger you can pose to other people on the road. Because people seemed salty that insurance is mandatory. And at least where I come from, liability insurance is very cheap compared to full coverage.
Its like gambling, I bet 100 bucks something will happen to my car this month. Damn nothing happened, lost again.
Except you know legally required.
Forced. And raped.
It’s not gambling, it’s risk aversion. They are not the same. It’s assuring you’re protected from harm by distributing out the costs in case of harm, that any individual couldn’t handle.
Gambling the goal is to get money. Insurance the goal is distributed liability so that possible danger will not bankrupt you. You still often can not come out ahead with an insurance payout, but hopefully won’t come out bankrupt.
That’s part of why medical insurance is so bad these days is because it doesn’t even prevent that. But it’s still an insurance, and not one that you want paying out.
Hell, not all insurance is even monetary --conceptually, saving grain silos for drought and famine is still insurance.
Actually, insurance is like gambling, your goal is just to loose, not to win. Lloyds, the world’s first and foremost insurance company started as a London coffee house where rich aristocrats met and bet on the return of ships. This was the pure gambling stage. Merchants soon started to bet that their own ship won’t return and the rest is history.
So you think getting cancer and having your medical bills paid is winning? Because that’s one form of insurance. Sure, if you get into certain types, it can be closer to gambling. But it can be further or closer
Yes. In this framing, where the goal is to lose the bet, getting cancer is winning. Winning the bet is a bad thing.
Sort of – you loose health and win money. It’s definitively a win compared to getting cancer and not being able to get treatment.
Thats a really dumb analogy.
You could frame anything involving risk as “gambling”.
In gambling you potentially profit from risking losses. With insurance you pay to mitigate your risk. Not really similar at all.
This already exists, and they are called unit linked insurance plans. Basically the insurance company provides you some units in an investment/trust fund, in addition to the policy benefit, for your premiums (obviously higher to compensate).
They are actually much scammier, because the insurance company administers the unit fund as well, and the fees are often much higher than if you just buy the policy and an exchange traded trust/fund separately. They were formulated by insurance companies basically for the sole purpose of bamboozling people who echo this meme. Back in the day, door to door insurance salespeople would say “even if you never claim, you still get a payout!”.
Unit-linked insurance plan - Wikipedia - https://en.m.wikipedia.org/wiki/Unit-linked_insurance_plan
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They know it’s BS but they’re not concerned with providing anything of value. It’s all about making a profit at any cost. If it’s legal they’ll do it, screw ethics. Hell, if it’s illegal but the punishment is a fine, that’s just the cost of doing business. Fuck MBAs and suits.
