Public Auto Insurance Rules!

[Charles Anthony]

The government has nothing to do with the petty extortion that the insurance companies engage in. This is a pefect example of how unfettered capitalism will enourage companies to screw other people because it is profitable.

How do you describe GeofFrey's experience above, i.e. ING coming into the market and offering 50% lower rates?

Is that a result of government or unfettered capitalism?

[Riverwind]

How do you describe GeofFrey's experience above, i.e. ING coming into the market and offering 50% lower rates?

Is that a result of government or unfettered capitalism?

Lower rates form whom? Most likely only drivers who were already paying low rates to start with. I doubt 'new' drivers like fleabag would have benefited from ING's cherry picking. It is quite likely that competition from ING will force the existing companies to reduce rates for the low risk clients and jack up rates on higher risk clients that ING is not interested in. More likely they would simply deny coverage. Such things are not an issue if the service was not essential. With auto insurance the service is essential so denying coverage to people based on their 'risk category' amounts to extortion. In TFB's case he did not make any claim yet the insurance companies jacked up his rates 8 fold because he was is a 'higher risk' category. The arbitrariness if the insurance business illustrated by TFBs case demonstrates why insurance companies operating in a free market cannot be trusted.

[Charles Anthony]

With auto insurance the service is essential so

That is exceedingly vague. What "service" exactly is essential?

If you are talking about a government taking over a service, be more precise. What service do you want the government to provide?

By the way, what do you think of my proposal in post #6 which still stands:

It would be cheaper just to raise all of our taxes and make the government payout all accidents.

Get rid of insurance companies altogether.

[Riverwind]

If you are talking about a government taking over a service, be more precise. What service do you want the government to provide?

In this case all the gov't needs to do is ensure that consistent and predictable set of rules are followed and that people cannot be unreasonably denied or charged excessive rates for coverage. They could do try to do this with regulation but private companies always threaten to stop selling insurance in provinces that try to go this route. That is why a gov't run monopoly is the only practical option.

Get rid of insurance companies altogether.

Governments can be involved in different ways depending on the task that needs to be done. Gov't should own the roads but should contract out the maintenance and construction work to private firms. Gov'ts don't need to own meat packing plants but need to establish a system of regulations that ensures minimum quality standards. When it comes to providing auto insurance the the most effective mechanism is a gov't run insurance monopoly that operates like a private insurance company but is compelled to provide insurance to everyone.

[Charles Anthony]

You are not saying what you want.

consistent and predictable set of rules

What are those rules?

people cannot be unreasonably denied or charged excessive rates for coverage.

What is "coverage" mean?

to provide insurance to everyone.

What exactly is this insurance?

Let me put it in a different way: what exactly do you want to happen when somebody gets into an accident?

If you are not going to deny people a policy, my proposal is cheaper.

[Riverwind]

If you are not going to deny people a policy, my proposal is cheaper.

Your proposal also provides no incentive for drivers to be careful - that would make it more expensive in the long run. Gov't run insurance monopolies do raise rates for people that actually cause accidents. What they don't do is charge ridiculous rates for people who have not caused any accidents but simply fall into some arbitrary 'high risk' category (TFB's case is a perfect example). In theory, this objective could be achieved by gov't regulation of private companies but experience in the Maritimes seems to indicate that regulating companies will simply encourage them to gouge customers even more in order to pressure the gov't to reduce the regulations. For that reason it makes most sense to set up a gov't run insurance company.

[Charles Anthony]

Your proposal also provides no incentive for drivers to be careful - that would make it more expensive in the long run.

No. I could say: one accident and you are cut off from having any benefits again. Problem solved.

or

Treat it like a crime: one accident and you are charged with assault. Problem solved.

How careful should drivers be, according to you?

experience in the Maritimes seems to indicate that regulating companies will simply encourage them to gouge customers even more in order to pressure the gov't to reduce the regulations.

That makes no sense. What exactly happened to support your conclusion?

[Wilber]

With auto insurance the service is essential so

That is exceedingly vague. What "service" exactly is essential?

If you are talking about a government taking over a service, be more precise. What service do you want the government to provide?

By the way, what do you think of my proposal in post #6 which still stands:

It would be cheaper just to raise all of our taxes and make the government payout all accidents.

Get rid of insurance companies altogether.

The only mandatory insurance is third party liability to pay for damage a driver does to someone else. I would call that essential.

Unfortunately the government just paying out settlements with no financial consequences would remove whatever incentive higher or lower rates may contribute to a person using good driving habits. What taxes would you raise? You can't expect those who don't own cars or drive to pay for the liability of those who do, so you would have to do it by increasing vehicle related taxes like licensing fees or fuel taxes. Sounds a lot like public insurance to me.

[White Doors]

I have cheaper insurance than anyone I know from BC or SASK.

I would likely pay less in a purely private system because I currently am in a low risk group. However, I know that status would only last as long as a $500 fender bender on icy roads where I don't even make a claim. I would rather pay more now if that means I will not be subjected to extortion because of some random event in the future.

if you don't make a claim, youre insirance does not go up. period.

[jdobbin]

I have private insurance.

I have my 4 year old car completely insured for collision etc and my house too - full coverage. I pay $1100 per year. Tell me again why you like government insurance?

There is definitely private insurance for cars that can be cheaper for some. It is a bigger difference based on age, location and driving record though when you look at private versus public.

There's a reason why some people have been getting pissed at private insurance lately.

[White Doors]

I have private insurance.

I have my 4 year old car completely insured for collision etc and my house too - full coverage. I pay $1100 per year. Tell me again why you like government insurance?

There is definitely private insurance for cars that can be cheaper for some. It is a bigger difference based on age, location and driving record though when you look at private versus public.

There's a reason why some people have been getting pissed at private insurance lately.

Well then I defintely prefer private insurance. I don't want to be associated with other high-risk groups - nor should I be.

[jdobbin]

Well then I defintely prefer private insurance. I don't want to be associated with other high-risk groups - nor should I be.

A lot of people in the Maritimes thought private insurance was good until everyone in the province started experiencing huge increases.

Good for you that you are doing well. Some provinces have not done well with private.

[Riverwind]

if you don't make a claim, youre insirance does not go up. period.

Not true. If you have a fender bender and pay for it out of pocket your insurance may still go up if the insurance co finds out about it. You also have no way to know how much your rates might go up as a result of a claim that you do make. With ICBC you know exactly how much more you will pay so it is easy to calculate whether you are better off paying it off yourself instead of making a claim.

[theloniusfleabag]

Dear Riverwind,

What they don't do is charge ridiculous rates for people who have not caused any accidents but simply fall into some arbitrary 'high risk' category (TFB's case is a perfect example).

Another example...My ex-boss got rear-ended twice in a year, neither were her fault since it is almost impossible to be found at fault if you are the lead car (although one of the other drivers happened to be an off-duty paramedic who smelled of booze!) . However, the insurance company told her,"We're starting to see a pattern here...so we're doubling your premium".

As to why ING was evidently so low, the term 'cherry-picker' was used. Meaning, they likely will insure only 30-55 yr old drivers who have never had an accident in their life.

Charles Anthony,

It would be cheaper just to raise all of our taxes and make the government payout all accidents.

There are too many variables for this to work, never mind that it is unfair to non-drivers. (On a side note, public transportation is already close to this. The transit system is already heavily subsidized with tax dollars, and the transit fees are a mere pittance compared to the actual cost. Why not raise taxes a few bucks and make transit free?) Gov't insurance still collects premiums from drivers, a sort of 'user-pay system' for gov't insurance. This money is 'pooled' in a fund to pay out claims. In the private system, this 'pooled fund reserve' is considered profit, and any claim against it is met with scorn and, inevitably, retribution.

This, however,

No. I could say: one accident and you are cut off from having any benefits again. Problem solved.

or

Treat it like a crime: one accident and you are charged with assault. Problem solved.

is just silly. No one would be on the road.

[Charles Anthony]

As to why ING was evidently so low, the term 'cherry-picker' was used. Meaning, they likely will insure only 30-55 yr old drivers who have never had an accident in their life.

So what? They are providing lower rates to more people who otherwise had high rates.

It would be cheaper just to raise all of our taxes and make the government payout all accidents.

There are too many variables for this to work,

Name one.

I just took OUT variables. I took out your bureaucracy.

Gov't insurance still collects premiums from drivers, a sort of 'user-pay system' for gov't insurance. This money is 'pooled' in a fund to pay out claims.

What an interesting "essential" service. I wonder if this logic can be applied to other "essential" services.....

No one would be on the road.

What would they fear??

I do not think free-loaders will ever be satisfied.

[White Doors]

Well then I defintely prefer private insurance. I don't want to be associated with other high-risk groups - nor should I be.

A lot of people in the Maritimes thought private insurance was good until everyone in the province started experiencing huge increases.

Good for you that you are doing well. Some provinces have not done well with private.

I'm from the maritimes. That was mostly because of 9/11. If the government controlled it they would just increases taxes.

[Technocrat]

I have cheaper insurance than anyone I know from BC or SASK.

I would likely pay less in a purely private system because I currently am in a low risk group. However, I know that status would only last as long as a $500 fender bender on icy roads where I don't even make a claim. I would rather pay more now if that means I will not be subjected to extortion because of some random event in the future.

if you don't make a claim, youre insirance does not go up. period.

That is pure BS. I used to live in London Ontario, I moved to Guelph Ontario for work. My rates went up for no other reason that Guelph is considered to be part of Toronto. So i have to pay Toronto insurance rates dispite living almost an hour away. It works out to nearly a $200 difference/year in my insurance rates. Explain to me the logic in that...

The CFO at my company had to pay insurance rates in the order of $7K per year... because he was immigrating from overseas. He had been driving since he was 16 but again was considered a 'new high risk driver' despite passing all the MOT drivers exams including a road test... thats just plain stupid.

[geoffrey]

As to why ING was evidently so low, the term 'cherry-picker' was used. Meaning, they likely will insure only 30-55 yr old drivers who have never had an accident in their life.

Go get a quote. I'm in my early twenties. No accidents or speeding tickets mind you, but I've only been driving 5 years.

[BubberMiley]

Go get a quote. I'm in my early twenties. No accidents or speeding tickets mind you, but I've only been driving 5 years.

And yet, as cheap as ING is, I bet you still pay more than I do.

[fellowtraveller]

After seeing the OP paying $1000/year for an old SUV in Manitoba, I'm glad to live in Alberta.

My costs for two newer vehicles used to be about $3000 for comprehnsive coverage when I dealt with the usual brokers, ING being the last one. Until then, I had no idea how much money the independent brokers marked up the policy. It must be an exceptionally profitable small business, they were getting over $1000 per year as a finders fee, every year, every policy.

I switched to Canadian Direct, and my cost is now under $1900 for the same vehicles. I have yet to make a claim, but my mother is also now insured with them and had no problems at all from Candian Direct with an accident. They defineitely do cherry pick, but I really don't care about high risk drivers having to pay more. Tough luck, drive better.

[LonJowett]

They defineitely do cherry pick, but I really don't care about high risk drivers having to pay more. Tough luck, drive better.

But under the private system, high-risk doesn't necessarily even mean you're a poor driver. It just means you fit the wrong demographic profile.

Public insurance in Manitoba confines its generalized distinctions to vehicle type and safe-driving record. So it's more expensive to insure a motorcycle or a sports car than it is to insure a station wagon, because those vehicles carry a higher risk. You also pay more if you have a habit of getting into accidents. But they don't have the gender/age/regional biases that private insurers usually have, which makes for a fairer system. I don't think a 25-year-old city-dweller with a good driving record should necessarily be gouged just because of his demographic profile. Why not include his race as a factor if they're going to make over-generalizations like that?

[Riverwind]

They defineitely do cherry pick, but I really don't care about high risk drivers having to pay more. Tough luck, drive better.

Have you even read the stories on this thread? Private insurance companies use whatever excuse they can to call someone ' high risk'. Safe drivers who have not caused any accidents are constantly screwed by private insurance companies. You may benefit from the 'system' as it is this month but that could change next month. You are very naive if you think 'driving safe' will protect you from being gouged by private insurance companies.

[White Doors]

I have cheaper insurance than anyone I know from BC or SASK.

I would likely pay less in a purely private system because I currently am in a low risk group. However, I know that status would only last as long as a $500 fender bender on icy roads where I don't even make a claim. I would rather pay more now if that means I will not be subjected to extortion because of some random event in the future.

if you don't make a claim, youre insirance does not go up. period.

That is pure BS. I used to live in London Ontario, I moved to Guelph Ontario for work. My rates went up for no other reason that Guelph is considered to be part of Toronto. So i have to pay Toronto insurance rates dispite living almost an hour away. It works out to nearly a $200 difference/year in my insurance rates. Explain to me the logic in that...

The CFO at my company had to pay insurance rates in the order of $7K per year... because he was immigrating from overseas. He had been driving since he was 16 but again was considered a 'new high risk driver' despite passing all the MOT drivers exams including a road test... thats just plain stupid.

I was speaking in relation to accidents. you make a claim on an accident, your rates go up - of course, if you do not - they do not.

[BubberMiley]

you make a claim on an accident, your rates go up - of course, if you do not - they do not.

Not necessarily true. There have been reports that with some private insurance companies, your rates will go up if you call them and inquire, hypothetically, about increases in premiums should you get in an accident. They feel that this sort of inquiry indicates you are more likely to have been in an accident, and this information indicates you are a higher risk.

[geoffrey]

you make a claim on an accident, your rates go up - of course, if you do not - they do not.

Not necessarily true. There have been reports that with some private insurance companies, your rates will go up if you call them and inquire, hypothetically, about increases in premiums should you get in an accident. They feel that this sort of inquiry indicates you are more likely to have been in an accident, and this information indicates you are a higher risk.

Never give your name when they call... never ever ever. NEVER!!! No hypotheticals. I've had a few friends who's rates have increased after asking about a future upgrade to their car or a fender bender.