View Full Version : Auto Insurance

08-29-2001, 02:04 PM
My gubernatorial campaign is getting under way. Some of my more salient platform items include pardoning all incarcerated drug criminals and eliminating mandatory education.

Also, I intend to revolutionize the auto insurance industry.

I live in California, so this racket may work differently in your state. Right now every driver in the state of California is required by law to purchase minimum liability insurance to cover damages to another vehicle and medical costs if you injure someone in a crash.

This is the opposite of the way it should be done, and far less effective. Under the current system, everyone has to participate or it doesn't work. If ONE person doesn't have the insurance then people are at risk of suffering damage and injuries without compensation. However, if the law didn't require you to buy this coverage, then it could be left up to you to find insurance to cover your self in case of damage and injuries.

It's quite simple. We could have insurance companies offering SELF-COVERAGE to those who want it. It's the equivalent of eliminating the liability coverage and just buying the uninsured motorist insurance. Under a system like that, no one is responsible to be insured. If you want to risk driving the roads without covering yourself, so be it. If someone hits you, it doesn't matter what their insurance situation is. You've either purchased self-coverage or you haven't.

Yes, I or my insurance company can sue them for damages if they are found at fault. Therefore, if I want to avoid getting sued over damages that are my fault, I had better get liability coverage too.

The only role government would play is in protecting the consumer from monopolies, price fixing and the like, just like they do with any other industry. The end result is a stripped down, efficient system that works and doesn't need government bureaucracy to maintain it.

Auto insurance is the only service industry that has the legislature supporting it by mandating that EVERY person buy the service. With the government and the insurance companies in bed together forcing everyone to buy, the industry prospers and the politicians get HUGE contributions, and the good of the consumer gets lost. How can anyone truly believe that this system is in place for our benefit?

I think that the very existence of "uninsured motorist coverage" shows what a racket our current system truly is. If the system of mandating liability coverage worked effectively, there would be no need for this extra bit of "in case the other guy isn't following the rules" coverage. It's a big racket to sell more insurance services. Just let drivers cover themselves IF THEY WANT TO and leave it at that.


08-29-2001, 04:09 PM
What about pedestrians hit by negligent uninsured drivers? What about passengers? I gues you could make passengers assume the risk, but bystanders should not have to assume the risk of being injured by uninsured motorists.

An experiment with "self coverage", albeit with legislative and regulatory intervention is the PIP system states like Colorado implemented. It led to more problems, in my opinion, than states with more traditional systems like my current home state of Idaho.

The minimum liability coverage requirement in most states is astoundingly low. Thus you should make sure you have adequate Uninsured as well as UNDERinsured motorist coverage. People make this mistake accidentally all the time. I did, and should have known better. I got the underinsured coverage added, but I am glad I wasn't wiped out by a joker with 50K liability coverage in the meantime. The money my wife and I spend for uninsured and underinsured coverage is some of the best money we spend. And we carry a big umbrella policy which is cheap if you have homeowner's coverage. But we see people crippled and killed by morons with 25 or 50 k liability (or no insurance) all the time. It's self-defense, which I think you advocate, as even the minimum liability coverage is not enough.

08-29-2001, 04:13 PM
The threat of a lawsuit doesn't affect most people, because they don't have enough that filing bankruptcy is a problem. They are in debt anyway and have no earning potential, so what do they care about being sued.

08-29-2001, 09:39 PM
What about pedestrians hit by negligent uninsured drivers? What about passengers? Of course, a self-coverage policy would cover your property and injuries resulting from anyone else's driving, including getting hit while being a pedestrian. Not to mention your normal medical coverage will cover that anyway.

Passengers also would be part of your self-coverage policy. Before getting in the car with someone, you should ask them "are you covered? How much?".

As you say, I prefer the self-defense approach and scrapping the faulty, liability coverage approach.


08-29-2001, 09:41 PM
Of course, but the point is that if you don't buy self-coverage insurance, you risk getting hit by someone with no assets.

Obviously, everyone with even a few hundred dollars worth of discretionary income will buy self-coverage insurance before getting on the road. Otherwise, you might get crippled by a drunk-driving moron with no money and no insurance.