a con. Worse than Social Security, even because you
pay in and (normally) never get anything back.
pay say $800 a year to insure your car. Over a ten year period that
comes to $8,000. Gone. Out the window. Youll never see it
this. Most people dont have major accidents. Insurance companies
know this and bank on it. For every dollar they pay
out (grudgingly and after much-ado, usually) they take in probably
ten more. Insurance companies are hugely profitable enterprises.
I wont call them businesses, because businesses
properly described provide a useful product or service. They
also dont force you to to be a customer, as insurance
companies do, having successfully egged on their bought-and-paid
for agents in state government (that is, politicians) to pass laws
making insurance coverage mandatory.
It is no coincidence
that the bankrupting of America has tracked parallel with the rise
of FIRE (Finance, Insurance, Real Estate). When you add up car,
life, health and home insurance, many people are spending $10,000
a year or more for
. nothing! Theyve been gulled
into believing theyre covered but theyll
be disabused of that notion if they ever have to file a claim. Yes,
the insurer might pay
if it does, it will also double or cancel your premiums
for future coverage. Ask anyone who has filed a major
claim. Even after decades of just paying in. As soon as the math
starts working out in favor of the insured even a little
bit the terms of the relationship are swiftly altered to
correct the imbalance.
talk about car insurance specifically. It was made mandatory on
the argument that its just not right to permit people to operate
potentially lethal and always dangerous motor vehicles on public
motorways without the driver having the means to compensate potential
victims for any damages or injuries he might cause.
But that was
just window dressing. The real motive was to create a coerced and
captive customer base that had no choice but to pay
up. Government-enforced cartels are secure from market pressure;
they dont have to worry about pleasing people because
the people have no choice. Oh, they can shop Tweedledee, perhaps.
But hes not much of an improvement over Tweedledum.
Well, how about
a real alternative?
Why not return
some market discipline to the insurance racket by making it mandatory
only for those drivers who cannot demonstrate the financial means
to cover damages equivalent to current mandatory state minimums
for basic liability-only coverage?
liability requirements are as follows:
bodily injury/death of one person;
$50,000 bodily injury/death of two persons;
$20,000 property damage;
Ok. So what
if you have the ability in an emergency to cut a check
for $75,000? Many people do, especially if you factor in home equity
and 401k savings.
And if you
do have that ability, then you have exactly the same coverage
as the law in Virginia requires only with a very key difference:
Instead of pouring money into the insurance cartels pockets
every year for the rest of your life (or at least, as long as you
drive) you have all your money every last cent of it
in the bank. If you never have an accident that damages
the property or harms the person of another, then you will still
have all your cash. With insurance coverage, youll
nothing at the end of it all. Literally, thousands
of dollars possibly tens of thousands, over a lifetime
gone. Or rather, transferred. From your pocket to the pockets
of the insurance cartel.
what its all about.
Is there any rational reason why a person with the means
to pay out a sum equivalent to the mandatory state minimums ought
to be forced to buy the same coverage from a shyster
insurance company? Will it matter in the slightest to the person
whose car is damaged whether the repairs are paid for by the owner
of the other car or by some shyster insurance company (whose
adjuster will do everything he can to lowball the amount
paid out by such practices as using junkyard parts to fix the car
or, even better total out the car and give the owner/sucker
a check for two-thirds the fair market value)
well, the answers
Keep the cartel
safe. Force people to pay.
about safety, folks. If you want to argue the point,
then consider this: Virginia (and some other states) will let you
drive without any coverage or demonstrated capacity to pay
for damages at all. Just pay the state rather than the cartel
(or not really, because like the Democratic and Republican parties
these two are just different wings of the same foul
bird) a $500 annual fee and you can drive all you want. You can
be otherwise indigent and have no means of paying out one red cent
for any damages you might cause to others.
So much for
its about money. Das Geld. And everyone who wants to
drive a motor vehicle is what the Germans roughly call a Geldscheisser
literally, a money shitter. Crank his arm and out pops a
coin. The state and its buddy-boy, the insurance company
do the arm-yanking.
do the coin-pooping.
with permission from EricPetersAutos.com.
[send him mail] is an
automotive columnist and author of Automotive
Atrocities and Road Hogs (2011). Visit his
© 2011 Eric Peters
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