Recently by Eric Peters: Some Cars I Can't Review
Collectivism the idea that social costs should be born by the individual, even when an individual hasnt actually imposed any costs on society is a big part of the reason why Ill probably never own a new car. Because owning a new car means paying through the nose for insurance the premiums based to a great extent not on what I have done or might reasonably be expected do (based on my track record, etc.) but rather, on what random strangers out there in society have done or may do.
Consider: All states force everyone to buy insurance on the theory that everyone should be financially responsible in the event of an accident. One problem with this nice-sounding theory is that out there in reality, irresponsible people routinely drive without insurance, irrespective of what the law requires. They may be theoretically liable to civil or even criminal consequences if theyre caught or cause someone injury. But unlike the responsible law-obeyers, the irresponsible law-ignorers typically have very little for the state to take. If Pedro the illegal alien totals your car, its you who will be left holding the bag. No, amend that. It is everybody who plays by the proverbial rules that gets left holding the bag because the costs imposed by Pedro are distributed across society in the form of higher premiums for everyone.
Everyone, that is, who isnt irresponsible.
The health care system operates on the same principle. It socializes costs which of course is a way of rewarding those who incur the costs at the expense of those who are forced to pay them. This, in turn, causes the costs to rise, inexorably upward. Car insurance works just the same.
You may have never been the cause of an accident. You have a spotless driving record going back decades. One fine day you decide to treat yourself to a new car. Then you find out what it is going to cost to insure the car and have to be revived with smelling salts. In a major metro area such as Phoenix or Philly, it can easily cost $1,000 annually to insure a car that sold for $25,000. This is a monstrous disproportionate expense. It is approximately five percent of the cars purchase price. Paid not just once, but every year, for several years to come. For perspective, consider home insurance. If you had a home worth $250,000 a policy that cost about 5 percent of that would be on the order of $12,500 per year! (The average cost for a homeowners policy is more like $800 a year not even close to 1 percent of the value of the home.)
If the home insurance shysters tried to foist a 5 percent per annum bill on homeowners, there would be a pitchfork and torches uprising. But when the car insurance shysters do exactly the same thing no, a worse thing because unlike a house, a car is a depreciating appliance, not an investment we just shrug and write the check.