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(Mirror.co.uk)   Car insurance costs so much because great drivers like you have to subsidize a continent full of everyone else   (mirror.co.uk) divider line 43
    More: Interesting, car insurance, bus drivers, Mr Smith, Competition Commission, price comparison, value product, continents  
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1228 clicks; posted to Business » on 17 Dec 2013 at 10:16 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



43 Comments   (+0 »)
   
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ZAZ [TotalFark]
2013-12-17 09:03:36 AM  
Car insurance costs so much because you rent a Ferrari as a replacement car when your rusted out Yugo gets a ding.

That's an equally fair summary of the article. What in America we call the duty to mitigate damages in tort actions is not working to control costs. The repair market has bad incentives.

In America we have "no fault" coverage in some situations to control costs. In my state this has two forms. First, you may not sue over minor injuries. You collect from your own insurance and nobody sues anybody. Second, you may buy insurance that pays out no matter who was at fault. You collect from your own insurance and your insurance company negotiates a settlement with the other insurance company. If you were primarily responsible for the accident your rates go up.

I like the principle that not "at fault" drivers contribute to cost of insurance. The division into at fault and not at fault is artificial in most accidents; usually there is a mix.
 
2013-12-17 09:23:59 AM  
Is car insurance really that expensive?  Mine comes out to something like $30 a month per car, or $1 a day.  That's cheaper than all our utility bills.  We have the standard $100K/$300K insurance, but we do drive less than 10 miles in an average day.  That's with no comprehensive insurance, and the blue book value of our vehicle is about $3000.

I think car insurance is expensive if you're an expensive person to insure.
 
2013-12-17 09:30:17 AM  
Hopefully the states take the PPACA as a guideline and ban insurance companies from charging men more than women for insurance simply because they use it more.
 
2013-12-17 09:43:54 AM  

Fubini: Is car insurance really that expensive?  Mine comes out to something like $30 a month per car, or $1 a day.  That's cheaper than all our utility bills.  We have the standard $100K/$300K insurance, but we do drive less than 10 miles in an average day.  That's with no comprehensive insurance, and the blue book value of our vehicle is about $3000.

I think car insurance is expensive if you're an expensive person to insure.


What? I live in an east coast city, have no tickets or accidents, and pay about $80 per month for full coverage on a car I owe about $7000 on.
 
2013-12-17 09:47:33 AM  
Cars are a lot more complicated to repair theses days, with all the technology built into them.
 
2013-12-17 10:26:19 AM  
All insurance is that expensive because of tort reform, the lack thereof.
 
2013-12-17 10:29:23 AM  
Hahaha suck it anti-mass commuters
 
2013-12-17 10:34:14 AM  

vernonFL: Fubini: Is car insurance really that expensive?  Mine comes out to something like $30 a month per car, or $1 a day.  That's cheaper than all our utility bills.  We have the standard $100K/$300K insurance, but we do drive less than 10 miles in an average day.   That's with no comprehensive insurance, and the blue book value of our vehicle is about $3000.

I think car insurance is expensive if you're an expensive person to insure.

What? I live in an east coast city, have no tickets or accidents, and pay about $80 per month for full coverage on a car I owe about $7000 on.



he doesn't have full coverage,  he's only paying liability.  And both those rates are about right
 
2013-12-17 10:40:16 AM  

ltdanman44: he doesn't have full coverage,  he's only paying liability.  And both those rates are about right


Comprehensive would have been about another $10 a month for me, but like I said, the value of the vehicle is only about $3000 to start with.  It's also a 17 year old light truck, so I'm not terribly concerned about its condition.
 
2013-12-17 10:52:21 AM  
Car insurance isn't really expensive.

vernonFL: What? I live in an east coast city, have no tickets or accidents, and pay about $80 per month for full coverage on a car I owe about $7000 on.


What you owe on your car is meaningless.

I live in Philadelphia and pay about $130 per month for 2, 2-year old vehicles, $500k liability, $1mm Extraordinary Med expense, and comp/coll on both vehicles with $250 deductibles.

I think that's a great deal.

If you think car insurance is expensive, wait until you see the legal bills should you get into a serious accident w/o insurance.
 
2013-12-17 11:03:08 AM  
Another point, with auto insurance, you're not 'subsidizing other drivers' like you are in health insurance.

Sure you're pooling your risk with another million people, but your claims history and exposures have a direct impact on your premiums.  Good drivers get discounts off the standard premiums and bad drivers get debited.

Meanwhile in health insurance, you get community rated or rated as part of a group of workers, so you can do Iron Man competitions and be charged the same exact premium as the 350lb whale 2 cubes over who has had lap band surgery and developed diabetes.
 
2013-12-17 11:38:48 AM  

MugzyBrown: Another point, with auto insurance, you're not 'subsidizing other drivers' like you are in health insurance.

Sure you're pooling your risk with another million people, but your claims history and exposures have a direct impact on your premiums.  Good drivers get discounts off the standard premiums and bad drivers get debited.

Meanwhile in health insurance, you get community rated or rated as part of a group of workers, so you can do Iron Man competitions and be charged the same exact premium as the 350lb whale 2 cubes over who has had lap band surgery and developed diabetes.


U.S.A! U.S.A!
 
2013-12-17 11:42:45 AM  
Half the complaints, arguments and comments here can be addressed as such:

Article is about the U.K.
 
2013-12-17 12:12:34 PM  

dragonchild: Half the complaints, arguments and comments here can be addressed as such:

Article is about the U.K.


Just to complicate matters, comprehensive ("fully comp") in UK means something different to comprehensive in USA. In UK, it's Physical Damage + liability, in USA it's Physical Damage coverage which is not Collision and not specifically excluded in your policy.
 
2013-12-17 12:17:15 PM  
Part of my payment goes into an unisured drivers fund. So if someone without insurance crashes into you, you are covered. My sister has been hit twice by uninsured drivers.
 
2013-12-17 12:32:14 PM  

ZAZ: Car insurance costs so much because you rent a Ferrari as a replacement car when your rusted out Yugo gets a ding.

That's an equally fair summary of the article. What in America we call the duty to mitigate damages in tort actions is not working to control costs. The repair market has bad incentives.


How so? Repairing a car correctly is expensive, notwithstanding the cost of a rental replacement.

I had a $9500 car get T-boned in a crash a couple of years ago. The repair bill (from the insurance company's preferred shop, no less) was over $7000, which put it over the state's threshold for a writeoff. And that was after I *drove* the thing under its own power to the body shop. $52/hr for the work, which isn't really that expensive for body work labor anymore (as done by qualified technicians, not by a couple of guys with hammers in their back yard.) Nowadays in the era of crumple zones, it's not hard to get a car written off anymore.

The insurance only paid about $25/day for a car. The family did not particularly enjoy the ten days I spent driving Enterprise's shiny new Cobalt before I bought a new car.
 
2013-12-17 12:43:12 PM  
Isn't this how insurance works......
 
2013-12-17 12:56:40 PM  
It's not that expensive ever since I learned that one weird trick insurance companies don't want me to know about.
 
2013-12-17 01:03:13 PM  

groppet: Part of my payment goes into an unisured drivers fund. So if someone without insurance crashes into you, you are covered. My sister has been hit twice by uninsured drivers.


in my neck of the woods if you get in an accident it's likely with an uninsured, unlicensed, and undocumented driver. Without good full coverage ( ie expensive ) insurance you're screwed.
 
2013-12-17 01:48:49 PM  

Nuclear Monk: It's not that expensive ever since I learned that one weird trick insurance companies don't want me to know about.


Do you have a blog I can click on?
 
2013-12-17 01:50:21 PM  

robbiex0r: Nuclear Monk: It's not that expensive ever since I learned that one weird trick insurance companies don't want me to know about.

Do you have a blog I can click on?


Log in to cheapinsurance44.com and enter the keyword discount
 
2013-12-17 02:10:57 PM  
There's a lot of escalation in the insurance game.

For a long time I went with just collision insurance.  I wasn't driving expensive cars and could pretty easily replace them (this is still the case, though I've moved up a notch or two in rust-bucket-levels).

But, not having an insurer 'on your side' means it's you against a behemoth.  For a very concrete instance, I was driving on a fairly crappy weather day (some slush and fog).  The woman in front of me and over a lane is going too fast for conditions (my opinion anyway).  Spins out, into my lane, I hit her, my car is pretty much dead.  Turns out her license was even suspended (but the car was insured).

So, I get paid, right?  Nope, her insurance drags its feet. (AmFam to name names, but I'm sure every insurer would do the same).  "Nah, it's a weather thing, no foul either side".  "Dude, she wasn't legal to drive, she got hauled away by the cop... how are you not paying out?"  Took months.  And, basically told, "well, we don't feel like paying, sue us if you dare".  I didn't have the time to get into it over a $2500 Corolla.

But, from here, I buy full insurance.  Either her insurer or mine would be paying, and my insurer would sic their lawyers on hers.  Which would inflate the costs for everyone, but that's where we are.

Much like you get financially boned if you don't pay for medical insurance.  You need a 'bigger gun' to go into negotiations with hospitals to claw the cost of a Tylenol back from $17 to $3.
 
2013-12-17 02:11:49 PM  
It is considering whether to make a driver's own insurer responsible for providing a replacement vehicle or to give at-fault insurers greater opportunity to take control over managing claims.

That seems odd. Is this something different in Britain?

When I got creamed by another driver a few years back his insurance accepted responsibility and was arranging a rental before the tow trucks arrived.
 
2013-12-17 02:22:22 PM  

vernonFL: What? I live in an east coast city, have no tickets or accidents, and pay about $80 per month for full coverage on a car I owe about $7000 on.


Car insurance varies A LOT based on lots of factors.

Once when I moved 200 yards south, into a different zip code, my car insurance dropped 25%.
 
2013-12-17 02:29:57 PM  

Lawnchair: But, not having an insurer 'on your side' means it's you against a behemoth.  For a very concrete instance, I was driving on a fairly crappy weather day (some slush and fog).  The woman in front of me and over a lane is going too fast for conditions (my opinion anyway).  Spins out, into my lane, I hit her, my car is pretty much dead.  Turns out her license was even suspended (but the car was insured).

So, I get paid, right?  Nope, her insurance drags its feet. (AmFam to name names, but I'm sure every insurer would do the same).  "Nah, it's a weather thing, no foul either side".  "Dude, she wasn't legal to drive, she got hauled away by the cop... how are you not paying out?"  Took months.  And, basically told, "well, we don't feel like paying, sue us if you dare".  I didn't have the time to get into it over a $2500 Corolla.


Somebody being unlicensed doesn't mean they're liable for the accident.

In most situations the car doing 'the hitting' is at fault.  In your situation, unless you have some witness or proof they were going 'too fast for conditions' then I would say it's 50/50 culpability.

But yes, you buy insurance for the legal coverage.  Getting your car fixed when you fark up is a side benefit.
 
ZAZ [TotalFark]
2013-12-17 02:32:08 PM  
Lawnchair

In my state two laws help out people in your situation.

1. Insurers pay double or triple damages for unfair settlement practices.

2. Winning plaintiffs are awarded 12% interest, starting from the day the lawsuit is filed. Prejudgment interest provides a financial incentive not to drag out a losing case.

Here it would be worth going to small claims for a $2,500 case where the insurance company is messing with you. Worst case a day out of your life. Best case an $8,000 payout.  More likely they get serious and offer you $2,000 to go away.
 
2013-12-17 02:38:15 PM  

ZAZ: Lawnchair

In my state two laws help out people in your situation.

1. Insurers pay double or triple damages for unfair settlement practices.

2. Winning plaintiffs are awarded 12% interest, starting from the day the lawsuit is filed. Prejudgment interest provides a financial incentive not to drag out a losing case.

Here it would be worth going to small claims for a $2,500 case where the insurance company is messing with you. Worst case a day out of your life. Best case an $8,000 payout.  More likely they get serious and offer you $2,000 to go away.


The insurance company was just doing their job.  They're supposed to defend their policy holder, not pay out anytime a 3rd party files a claim.
 
2013-12-17 02:54:44 PM  

groppet: Part of my payment goes into an unisured drivers fund. So if someone without insurance crashes into you, you are covered. My sister has been hit twice by uninsured drivers.


biatch should've kept her mouth shut and learned the first time.
/jk
 
2013-12-17 02:58:40 PM  

Fubini: Is car insurance really that expensive?  Mine comes out to something like $30 a month per car, or $1 a day.  That's cheaper than all our utility bills.  We have the standard $100K/$300K insurance, but we do drive less than 10 miles in an average day.  That's with no comprehensive insurance, and the blue book value of our vehicle is about $3000.

I think car insurance is expensive if you're an expensive person to insure.


I've got the same automobile coverage, and it costs about $94/month.  Recently it has come out that persons in my location have been overcharged for health insurance systematically and repeatedly over many years.  It's not fair.:   http://www.pbs.org/newshour/bb/government_programs/july-dec13/colorad o _11-07.html?keepThis=true&TB_iframe=true&height=650&width=850&caption= PBS+NewsHour+%7C+PBS

I'd just like to say that there are a lot of couples starting families, couples getting married, and lots of healthy people around here.  It's BS to put these persons behind the 8-ball because they aren't rich.  They're rich with lot's of stuff.
 
2013-12-17 03:15:16 PM  

ski9600: I've got the same automobile coverage, and it costs about $94/month.  Recently it has come out that persons in my location have been overcharged for health insurance systematically and repeatedly over many years.  It's not fair.:


Some places are genuinely more dangerous to drive, unfortunately for those who live there. There more than twice as many traffic fatalities per miles driven in the US than in the UK. There are more than 31 times more traffic fatalities in the UAE than in the US per miles driven.

I can't find any similar numbers for the US, though that'd be a great map.
 
2013-12-17 03:38:11 PM  

ski9600: Recently it has come out that persons in my location have been overcharged for health insurance systematically and repeatedly over many years.  It's not fair.:


That's what happens when the state (or feds now) don't let companies underwrite properly.
 
2013-12-17 04:57:55 PM  
Actually, the reason I have car insurance is *because* of the continent of abysmal drivers. I've only ever been in one accident and some idiot t-boned me after running a red light.
 
2013-12-17 05:20:22 PM  

robbiex0r: Nuclear Monk: It's not that expensive ever since I learned that one weird trick insurance companies don't want me to know about.

Do you have a blog I can click on?


Or a sister making $325 per hour working from home on the internet?


There is one good thing about auto insurance in the UK.  Companies there can no longer discriminate by gender.  I have no problem with my rates being high on the basis i'm a bad driver, but back when I was a young guy it really sucked being accident free but paying high single young male rates based on categoric behaviour by others in "my group".  We'd never allow that by race, or sex if it disadvantaged the female, but somehow it is ok by age combined with gender provided the male takes it in the rear.  Not that there's anything wrong with taking it in the rear....
 
2013-12-17 10:03:20 PM  

Fubini: Is car insurance really that expensive?  Mine comes out to something like $30 a month per car, or $1 a day.  That's cheaper than all our utility bills.  We have the standard $100K/$300K insurance, but we do drive less than 10 miles in an average day.  That's with no comprehensive insurance, and the blue book value of our vehicle is about $3000.

I think car insurance is expensive if you're an expensive person to insure.


Mine is $122 a month, which sounds high.

But, I drive a new car (signed for it in September, from a great deal at work - car payment of $224 a month with less than 3% interest), am 25 (will be able to get a lower cost in January once I'm past the early 20s cluster), and don't bundle with other insurance (single, renter, no dependents, and limited history).

It's still very affordable for me, and no tickets (ever) and one accident (hit a deer in an old car, declared act of god and I'm not adversely affected) on my record. That, and my car is a small sedan with very high NHTSA crash scores.
 
2013-12-17 10:07:25 PM  

MugzyBrown: ski9600: Recently it has come out that persons in my location have been overcharged for health insurance systematically and repeatedly over many years.  It's not fair.:

That's what happens when the state (or feds now) don't let companies underwrite properly.


We can't even agree state-to-state on comparative to contributory negligence, let alone get the squareheads who barely know their asses from a hole in the ground when it comes to legislating this industry.
 
2013-12-18 01:43:04 AM  
Lawnchair: There's a lot of escalation in the insurance game.
For a long time I went with just collision insurance. I wasn't driving expensive cars and could pretty easily replace them (this is still the case, though I've moved up a notch or two in rust-bucket-levels).

But, not having an insurer 'on your side' means it's you against a behemoth. For a very concrete instance, I was driving on a fairly crappy weather day (some slush and fog). The woman in front of me and over a lane is going too fast for conditions (my opinion anyway). Spins out, into my lane, I hit her, my car is pretty much dead. Turns out her license was even suspended (but the car was insured).

So, I get paid, right? Nope, her insurance drags its feet. (AmFam to name names, but I'm sure every insurer would do the same). "Nah, it's a weather thing, no foul either side". "Dude, she wasn't legal to drive, she got hauled away by the cop... how are you not paying out?" Took months. And, basically told, "well, we don't feel like paying, sue us if you dare". I didn't have the time to get into it over a $2500 Corolla.


That's pretty weird. Without knowing all the details, I can pretty safely say she would normally be found 90-100% at fault. She did not control her vehicle and entered the lane you occupied. The only thing they could knock off the settlement for you is for some kind of evasive action (i.e. you didn't swerve to avoid her or hit the brakes). None of the people I know in the business would be caught dead behaving that way. Except at State Farm. The point is, even without collision coverage to fall back on with your own carrier, it's just not worth it in the long run for insurance companies to screw with people when liability becomes clear after statement are taken and pictures of the cars get sent in. People pay insurance companies to cover them when they do something stupid on the road. Going 90% on an accident like yours would probably be considered a dick move by most.

The license part wouldn't enter into it though. In fact, police reports are frequently not used at all. Police tend to arrive after the accident and don't add much clarity to things.


Why yes, I have worked in liability.
 
2013-12-18 02:17:45 AM  

jaytkay: vernonFL: What? I live in an east coast city, have no tickets or accidents, and pay about $80 per month for full coverage on a car I owe about $7000 on.

Car insurance varies A LOT based on lots of factors.

Once when I moved 200 yards south, into a different zip code, my car insurance dropped 25%.


Biggest one is that insurance is regulated at the state level.  It will be interesting to see what happens with car insurance now that the Federal government has stepped in and set out what insurance has to offer.  I'd like to see the same thing happen with auto insurance.
 
2013-12-18 02:28:17 AM  
Dwight_Yeast: Biggest one is that insurance is regulated at the state level. It will be interesting to see what happens with car insurance now that the Federal government has stepped in and set out what insurance has to offer. I'd like to see the same thing happen with auto insurance.

Yes, because who knows more about managing risk than the folks working for the federal government?
 
2013-12-18 04:48:03 AM  

Botkin of the Yard: Dwight_Yeast: Biggest one is that insurance is regulated at the state level. It will be interesting to see what happens with car insurance now that the Federal government has stepped in and set out what insurance has to offer. I'd like to see the same thing happen with auto insurance.

Yes, because who knows more about managing risk than the folks working for the federal government?


It's not about managing risk but rather standardization of service. When each company offers completely different plans there's no way to comparison shop. With our new healthcare laws you can.
 
2013-12-18 05:21:42 AM  

vernonFL: Fubini: Is car insurance really that expensive?  Mine comes out to something like $30 a month per car, or $1 a day.  That's cheaper than all our utility bills.  We have the standard $100K/$300K insurance, but we do drive less than 10 miles in an average day.  That's with no comprehensive insurance, and the blue book value of our vehicle is about $3000.

I think car insurance is expensive if you're an expensive person to insure.

What? I live in an east coast city, have no tickets or accidents, and pay about $80 per month for full coverage on a car I owe about $7000 on.


You're both getting hosed. I have full coverage and low deductibles on two cars and a motorcycle that are worth (combined) ~$60,000 that costs only $165/month.
 
2013-12-18 05:22:50 AM  

Elzar: Hahaha suck it anti-mass commuters


I pity myself, being able to go anywhere I want, any time I want, and not have to smell the unwashed masses.
 
2013-12-18 08:58:49 AM  

Dwight_Yeast: Biggest one is that insurance is regulated at the state level.  It will be interesting to see what happens with car insurance now that the Federal government has stepped in and set out what insurance has to offer.  I'd like to see the same thing happen with auto insurance.


The feds set it out back in the 40's that if the states didn't make an ass of themselves they could have it.  Which is smart given different legal cultures and their origins and individual states' needs.  It would be interesting if the Feds took it back over but not better.  As for support for that last remark I'll refer you to the TRIA program being run for Terrorism Risk on Work Comp policies.
 
2013-12-18 12:12:31 PM  
Dwight_Yeast: It's not about managing risk but rather standardization of service. When each company offers completely different plans there's no way to comparison shop. With our new healthcare laws you can.

Insurance is a form of risk management and different standards are needed under various circumstances.

Auto insurance is also an extremely competitive business and there is comparison shopping going on all the time. That's why carriers spend ungodly amounts of money on advertising. And on their websites. It's a fairly easy product for people to understand and quotes from various carriers are easily obtainable. People generally find that one basic liability policy (or one with collision) is very much like another. For the most part, people are looking for low rates.
 
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