What is something you think should be subsidized
- Thread starter zerocool1
- Start date
yllus
Elite Member & Lifer
- Aug 20, 2000
- 20,577
- 432
- 126
Car insurance maybe? Up here it's a legal requirement to own the stuff if you drive a car, so it never made much sense to me that the sector would be handed over to private hands. They don't have all much reason to price competitively. Well, I guess with proper government oversight it might be the most efficient solution.
I guess I have nothing.
I guess I have nothing.
moshquerade
No Lifer
- Nov 1, 2001
- 61,504
- 12
- 56
I agree. If the state's gonna force me to have it, and my insurance company is able to collude with the government to revoke my driving privileges if I miss a payment; they should help with the bill.
I'd rather no state force people to have insurance. It reeks of uptight, whiny people screeching "Well who's going to pay for this then"? I'm sure the insurance companies love it though.
AreaCode707
Lifer
- Sep 21, 2001
- 18,447
- 133
- 106
Uhhhhh....
They have a lot of pressure to price it competitively. I spent a good amount of time in the industry. Here are just some of the reasons:
1. Competition. Other carriers will strive to offer a lower rate to take your business. Car insurance is a takeaway business, there aren't enough new drivers every year to grow significantly.
2. State Department of Insurance pricing pressure. All rates have to be filed with the state DOI. They're looking at your profitability. Making too much, too many years in a row? Expect the commissioner to start asking you to take rate cuts on your more profitable segments.
3. Customer retention. Your customers will shop if their rates go up, even though it's due to actuarial models. You want to keep rates steady for renewal business, otherwise they're going shopping and you stand a good chance of losing them because of #1.
I could go on, but I won't.
EDIT: Actually, I will. Insurance, as it is, generally is not profitable on its premiums (what we call an "underwriting profit" but is instead profitable on the investment of that premium, called "float," between the time that the company receives it and the time that it is paid out on claims.
In fact, many/most of the large carriers do not turn any sort of underwriting profit unless there is a year with exceptionally low accidents or no natural disasters where multiple were predicted. Some even take an underwriting loss (pay more on claims than they receive in premium) but make their profit on the float.
An insurance company is not sitting there making money hand-over-fist unless it has smart investment managers. Making it on the policy base alone doesn't work. Try it and see how fast you go out of business.
Plenty of competitive pressure, no subsidy required. Want lower rates? Stop getting tickets and smashing into things. Still don't want to pay for compulsory insurance? Move to a state that doesn't require it. When someone slams into you and can't pay, you might regret the decision.
nakedfrog
No Lifer
- Apr 3, 2001
- 62,838
- 19,058
- 136
I don't know, I think if they're going to trust you to pilot a huge, lethal projectile around that you can be held culpable for damages caused. If some bonehead plows into your house, you're cool with footing the bill for repairs? Or would you rather trust that you can get your money out of the offender via the court system?
The way I see it. Shit happens in life. Sometimes someone is responsible, sometimes they're not. If you own something and you want guaranteed protection for it, buy your own no-fault insurance for it. The things you own are ultimately your responsibility.
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