Auto Insurance and the 15% rate cut - myth and reality

[gullyfourmyle]

Back in 2008 I wrote a self-published book titled ABUSE OF POWER. It was about Bill 172 - the street racing legislation. Part of the book required me to research what is known as the Ontario Road Safety Annual Report (ORSAR). I analysed the data gathered by police on every aspect of traffic accidents from 1988 up to the latest numbers which at that time were for 2006. It takes anywhere from a year to two years for the data to be compiled.

What the data indicated was that speed is involved in traffic accidents less than 7% of the time. It is rarely the cause of an accident.

Street racing which was what was on the public's mind at the time accounts for .002% of fatal accidents and the same can be said for non-fatal accidents.

Parked cars represent another .08%

Distracted drivers cause 80% of accidents.

Police spend most of their spare time and a huge portion of their budget trying to catch speeding drivers. They are not serving and protecting anyone most of the time. They are imposing a road tax that finds its way back into the police budget. There is nothing honest about this.

Most of the distracted drivers are distracted by their passengers over whom they cannot have complete control 100% of the time despite what the law unrealistically requires. The people who cause the most accidents and thus carnage on the roads are people who are not drivers, have no driver's license, don't know how to drive and have no automobile insurance.

How do you target these people? So far we have no way of doing that so the real perpetrators get away with their crimes and the driver who is generally completely innocent gets nailed.

The 80% number comes to you directly from the Canadian Automobile Insurance Association. They compiled the data.

In the USA their National Automobile Insurance Association came up independently with the same 80% number and since I wrote my book the numbers have stayed the same as have most of the numbers in the ORSAR.

The numbers are unassailable.

However our automobile insurance premiums are mostly affected by speeding tickets.

Using speeding tickets as a yardstick of driver competence is fraudulent and historically unjustifiable.

What that means is our insurance industry has been committing a financial rape of their clients who are legally required to have automobile insurance. This is way beyond simple fraud.

Essentially the government has made fraud and theft an operational mandate for the auto insurance sector.

Every driver is a victim regardless of driving record.

For the NDP to demand a 15% roll back in premiums is the bare minimum of what could and should be asked and imposed.

There is only one aspect of speed and auto insurance premiums that affect the rates.

The higher the speed the greater the chance of injury and death.

Fatal accidents are cheaper than injuries and the most expensive injuries happen at low speeds. So higher speed limits can be said to be in everyone's best interests.

When the speed limit on the 401 was lowered from 70 mph to 60 mph, supporters of the speed limit reduction - including the police said the lower limit would reduce the number of fatal accidents. It did not. The 60 mph (100 kph) speed limit on the 401 is maintained for incompetent drivers who have no business on the 401. The slower speed makes them feel safer but the numbers tell us they are no safer at any speed. Incompetence does not need a speed limit.

Speed limits are not based on safe operation of an automobile. They are based on safe operation of cement mixers, cranes, school buses and other ungainly, unaerodynamic vehicles that all individually weigh many tons more than a car or light truck. All cars today are more than capable of negotiating any 400 series of highways at 90 mph. with ease.

What reduced the number of fatal accidents since the speed reduction was new car architecture. Cars are structurally safer and old fashioned drum style front brakes are gone. Front drum brakes in moderate to heavy traffic that requires repeated use of brakes is like driving with no brakes at all due to a phenomenon known as brake fade. So even antique cars are commonly upgraded to disc brakes on the front.

Most accidents happen to drivers between the ages of 18 to 55 - not because they are worse drivers per capita but because there are so many more drivers of that age on the road. Insurance companies suck blood from that demographic and have since the advent of the baby boomers. Mind you the baby boomer demographic is still being parasitized by the insurance industry for other fictional biological traits that only happen to baby boomers.

The youngest drivers have more accidents because they are more likely to have passengers who are uncontrollable by the driver not because they are poor drivers. That their passengers tend to die more frequently than the actual driver is because the driver has a steering wheel to hold on to and instinctively takes avoidance measures to save him or herself in a split second.

Most injury and fatal accidents happen on straight stretches of two lane roads with perfect visibility, dry roads, no intersections, no alcohol or other health issues and speed is not a factor. This what the data collected by the police tells us.

Another aspect of this issue is that when the 15% insurance premium reduction hits, soon after all home owners will be hit with a household insurance premium hike that will more than make up for the auto sector shortfall.

The insurance sector in its many iterations is no friend to the consumer. It's a parasitic industry that requires a lot more objective oversight and legislative restrictions than it currently gets.

Under both Liberal and Conservative governments the insurance industry rapes and pillages at will and only grudgingly makes payouts. Fraud is certainly an issue but the insurance companies can certainly do a lot more to protect themselves and us from fraud they say drives up rates than the bare minimum they do.

The numbers tell us that by far it's the people running the insurance companies who are committing the frauds not their clients.

The answer fraud on the consumer end is in upgraded automotive technology to make cars far more difficult to steal. The technology exists but is still out of reach for most consumers.

Edited May 19, 2013 by gullyfourmyle

[Topaz]

I've talked to my broker and its still where you live, the car you drive, and how many tickets you have. The companies won't give good drivers a break and we all know if they lose money from their investments , they get it back through upping the rates. They also rate you on your age and sex, but I've found brokers can give the best rates.