A cut, sure, but the whole fuckin thing?
A cut, sure, but the whole fuckin thing?
193 comments
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its a MLM, just like health insurance. theres no guaranteed they will cover your cost in damages some of the time.
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How insurance should work: Disasters are unpredictable, are bound to happen and can be very expensive to resolve. So instead of each individual risking bankruptcy for participating in a system, everybody pools together money at a much lower individual cost. That money goes toward a statistical guarantee that the cost of any disaster will be covered.
How insurance actually works (under capitalism): For-profit companies use every tool at their disposal, regardless of ethics or legality, in order to take as much of your money as they can possibly get away with while simultaneously paying out as little as they can possibly get away with, and then pocket the difference.
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The province I'm in has socialized car insurance through a crown corporation. We all pay relatively the same rate, and there are discount tiers applied based on years of experience. If they have a good year of low payouts we get rebate cheques because its not a profit corp.
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Or not to build homes in a place called Tornado Alley, for example.
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Iirc, margins for insurance are actually extremely thin. Consumers almost always go with the lowest cost option, and since insurance is mandatory, they don't differentiate much on anything except cost. Insurance companies don't actually make money on insurance premiums. They make money by investing the float.
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What op is describing is called "self insured"
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Also called "illegal" in most places.
And the flying is, it was much cheaper when it wasn't mandatory. Liability insurance used to be super cheap because people didn't want to pay for insurance that didn't cover their own car. But when states started mandating liability insurance the price skyrocketed.
What grinds my gears though is being required to have liability insurance for every car even though the car itself isn't covered. I'd love to daily drive a super-efficient electric car, but I teach scuba on the side and once or twice a week end up having to haul a bunch of dive gear in my cargo van. But with the cost of liability insurance, I can't afford to keep my van as a beater weekend driver when the time comes to get a new daily driver, so I'll have to buy another fuel-guzzling murder machine that I mostly drive to an office job downtown.
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Funny enough, if somebody offers you insurance that builds cash value, even though the sound of it does make sense you should probably run.
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I've never heard of this. Why should I run?
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Any guesses as to how much money would be in the pool if every person in your country paid into a single pool for automotive insurance? I bet that if such a pool existed, then there would be a lot of motivation to use that money to reduce the risk of paying out. Which makes me wonder if public transit is better in countries with national health insurance as a result of the national health insurance.
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In BC, Canada, auto insurance is managed by the government. We have low insurance rates to begin with, and then we get a cheque in the mail at the end of the year if they collect more premiums than they pay out. (It's not a straight annual thing, of course. I don't know the details, but over the longer term it's how it works.)
It's kinda weird not having any sales pressure, too. They aren't at all light about upselling extra features. I only just found out that for ~$30/yr, I can add replacement car coverage to my plan. Over a lifetime, that's like $2K to never need to worry about a collision leaving you unable to drive for more than like a day to get a rental.
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Didn't always have cheap insurance. The government before this one looted that extra auto insurance pool money to put into the general coffers so that they could claim the budget was in the black instead of the red, rather than send it back to people, and they charged like 50-100% more for insurance to begin with.
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German here, the answer is no. Our public transit is crumbling left and right. Our health insurance too though. Serves us right for voting conservatives into power again and again for the last 30 years.
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I have to imagine the tail wags the dog both ways in that scenario. Better public transport feeds into better public health outcomes, and nationalised healthcare (should) have a vested interest in reducing auto reliance for myriad reasons.
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Its like gambling, I bet 100 bucks something will happen to my car this month. Damn nothing happened, lost again.
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Except you know legally required.
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Forced. And raped.
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It's not gambling, it's risk aversion. They are not the same. It's assuring you're protected from harm by distributing out the costs in case of harm, that any individual couldn't handle.
Gambling the goal is to get money. Insurance the goal is distributed liability so that possible danger will not bankrupt you. You still often can not come out ahead with an insurance payout, but hopefully won't come out bankrupt.
That's part of why medical insurance is so bad these days is because it doesn't even prevent that. But it's still an insurance, and not one that you want paying out.
Hell, not all insurance is even monetary --conceptually, saving grain silos for drought and famine is still insurance.
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Actually, insurance is like gambling, your goal is just to loose, not to win. Lloyds, the world's first and foremost insurance company started as a London coffee house where rich aristocrats met and bet on the return of ships. This was the pure gambling stage. Merchants soon started to bet that their own ship won't return and the rest is history.
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I used to be with a mutual insurance, which was still actually a mutual insurance, meaning the customers were also the shareholders. I got a small dividend most years out of whatever surplus existed.
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Wish we could have that for fire insurance in California but the company would go belly up by the end of the month.
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I first thought of starting a nonprofit insurance (all kinds) 40 years ago. It really is that obvious a market. Risk pool is always better when it's bigger. Obama care did something, but not enough.
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The idea is when everyone pays into insurance the collective fund is used to pay for the costs any individual wouldn’t.
Thankfully accidents or thefts don’t happen to everyone, but if they do you usually get more out than you put in (personal liability is usually millions of dollars, nobody puts that much in individually).
Where this goes wrong is when fraud happens or insurance companies are incentivized to manipulate rates to increase their profits.
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Where this goes wrong is when fraud happens or insurance companies are incentivized to manipulate rates to increase their profits.
I'd say the problem is that insurance companies can take profits above operating expenses at all. These should all be strictly regulated (if not entirely state-run) and predicated on funds going to reimbursements for expenses + minimal admin overhead. If money is leaking out the window to shareholders via dividends and stock buybacks, its effectively being embezzled from policy holders.
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There's an argument for maintaining a reserve (think about disaster prone areas for things like floods, hurricanes, etc...), but I agree that it would be better for insurance organizations to be prohibited from being publicly traded (private or public benefit corporation only)
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I don't understand why we don't have nonprofit insurance. It would be cool if someone started one that focused on serving poor people.
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In my Canadian province car insurance is government run and if you’re a good driver your premiums and license fees are reduced
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Where's the disincentivization for manipulation?
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But what about the shareholders? Gotta pay out them sweet sweet dividends.
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Mutuals and professional body insurances are a thing to.
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And if you don't pay it you can't legally drive a car. And if you can't drive a car, you aren't going to be hired for a job.
I repeat, YOU ARE REQUIRED BY LAW TO GIVE A CORPORATION MONEY IN RETURN FOR NOTHING IF YOU WANT TO PARTICIPATE IN SOCIETY
Car insurance is a fucking scam.
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You don't have to drive, you can take the bus, ride a bike, use taxis/rideshares, etc. Plenty of people get around without a car. My area is pretty poor for carless living, yet I did it for a few years.
Car insurance is to protect others from you, and a lot of it is due to medical costs and lawsuits. Without insurance, one accident would financially ruin you and the person you hit, so it's a good thing people are required to have it to drive on public roads.
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Every time I see a comment like this, I want to beat the poster mercilessly with public transit maps for cities like Houston, Jacksonville, Phoenix, etc. until they realize what a stupid fucking suggestion that is for millions of people.
Yea sure, just walk 5 miles in 100+ degree heat to the nearest bus stop for the bus which comes every 50 minutes and will drop you off 5 miles away from your destination. So easy!
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I will say there are lot of areas of the country where things like biking and bussing aren't feasible and I empathize that people don't have that level of convenience.
I will also say that there are many areas of the country that do have bus service or could bike to work and refuse to try it.
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I mean, you could hold a few hundred thousand in a surety bond instead, but who can actually do that?
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People who got paid a fair wage before wealth inequality spiraled lol
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The USA has ~23 million millionaire households. So many people could do that.
It seems that one can pay a percentage of the bond amount as an annual fee, avoiding having to put up the fully amount. I have no idea if that is a good idea, and I have no finished reading the link I posted.
When would some want to do this over having normal liability insurance? Maybe if they drove very little.
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YOU ARE REQUIRED BY LAW TO GIVE A CORPORATION MONEY IN RETURN FOR NOTHING IF
You aren't, actually. You can obtain a Financial Responsibility Bond in lieu of insurance. An FR bond is where you deposit a certain amount of cash in an interest bearing account. If the courts determine you are responsible for damages accrued while driving, and you fail to pay those damages directly, they are taken out of your FR bond.
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No it's not, mandatory insurance of cars is there in case you do something, is it better if you get into accident and go bankrupt instead?
Agree about having to own a car but that's a North America problem, even then there are some cities where you don't need to own a car
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Idk what country you are in, or where you live, but you are absolutely not required to drive a car to participate in society. A car is a luxury item, a privilege. Car companies have been brainwashing the public for a hundred years with pro-car propoganda so it may seem necessary but it definitely isn't.
Trains, trams, busses, taxis, bikes, walking. These are all options available to pretty much everyone. No insurance required.
Now that I think of it, at least where I live the level of insurance you actually need to legally drive is included in your registration.
So maybe what you're saying true for you and whatever area you live in, but it's definitely not universally true
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There are many cities in the US where it absolutely is required to have a car. Where trains, trams, busses, taxies, bikes, and walking are actually NOT available or feasible because the city does not have the infrastructure in place for them. Your comment comes across as incredibly privileged and ignorant of the reality many people face. And you can say, out of sheer ignorance, something like "well the people living there should change that!". Sure. The single mom just trying to get her kids to school before getting herself to work everyday is going to get right on that.
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Liability insurance: legally required.
Also liability insurance: costs hundreds and the price gets jacked up every few months because fuck you.
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Imagine somebody without liability insurance hits you with their car, breaking your spine. And they don't happen to have any spare money. You'd have to remodel your home for accessibility on your own dime.
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I have to wait to get hit???
I'm guessing she hasn't figured out the concept of insurance fraud...
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Everybody is 12
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Everybody is broke.
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I don’t understand your comment. 12 years old? What does that have to do with this? Or is it an “I am 12 and what is this?” joke I’m not getting?
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If it were a socialist systemic thing, and we rephrased it to, we all contribute a little each year and it goes into a pot for anyone who needs their car fixed, who contributes? (but then you gotta erase the evil corporation that rakes in billions and pays ceos unimaginable money)
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Need a new paint job? Get in an accident. Check engine light? Get in an accident.
I am not a
lawyerperson whose advice should be listened to on anything, ever. -
This already exists, and they are called unit linked insurance plans. Basically the insurance company provides you some units in an investment/trust fund, in addition to the policy benefit, for your premiums (obviously higher to compensate).
They are actually much scammier, because the insurance company administers the unit fund as well, and the fees are often much higher than if you just buy the policy and an exchange traded trust/fund separately. They were formulated by insurance companies basically for the sole purpose of bamboozling people who echo this meme. Back in the day, door to door insurance salespeople would say "even if you never claim, you still get a payout!".
Unit-linked insurance plan - Wikipedia - https://en.m.wikipedia.org/wiki/Unit-linked_insurance_plan
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That's basically what whole life insurance is, and it's a complete scam IMO because premiums are high (to allow for investment) and the investment is too conservative. You're much better off buying term life insurance and investing the difference.
You can partly do this DIY with self insurance. Basically, you put a certain amount of capital into a bank account or something and hand that over to the state treasurer in a trust, and it needs to be about $200-400k in my area (range is because the law isn't clear to me). If you can stand to part with that much, you probably prefer to have the insurance take that risk for you so you can retain control over that money and not worry about lawsuits.
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bc “businessmen” in america think they are providing something of value and not utter bullshit
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They know it's BS but they're not concerned with providing anything of value. It's all about making a profit at any cost. If it's legal they'll do it, screw ethics. Hell, if it's illegal but the punishment is a fine, that's just the cost of doing business. Fuck MBAs and suits.
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Once you start seeing insurances as casinos where you can bet on something happening to you or not it makes a little more sense
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Homeowner's insurance is worse, almost as bad as health insurance. Try getting them to pay out, and if they do, watch your rates go up, or your policy get cancelled. If you have a mortgage, you must have homeowner's insurance. State Farm cancelled me out of the blue after 25 years without a single claim.
I suspect they all conspire to cancel policies, knowing that we need to go somewhere, so State Farm cancels a customer, and they go to Allstate at a much higher rate, and Allstate cancels a different customer, and they go to State Farm at a much higher rate. This forces the customer to go through a new approval process, and sign a new contract that is probably worse for them than they had before, in addition to being a higher rate.
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Oh my God, you probably don't want to get me started on that. Here it is literally (in the original meaning of the word) a scam. Companies incorporate, take in premiums, pay themselves big bonuses, then say they are not financially flush enough to cover claims, go bankrupt and THE SAME PEOPLE come back and do it again. It is a racket designed to extract money, they don't even reliably pay claims, thankfully I don't have personal experience with having to use them, but have read enough industry news.
I have paid enough in home insurance to buy a house. We pay for the last 40 years a rate that would imply each house in Florida is completely wiped out every 40 years but my old house is 100 this year, our current house is 85. What the state charges probably is close to the actual risk, and if we just put EVERYONE onto that plan and ran it as a nonprofit it would work better.
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It really does need to be investigated. I believe they use LexisNexis to share data.
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You say "try getting them to pay out" and follow up saying you never filed a claim? I've gotten my home insurance to pay out twice, once for a beer that fried a laptop (my fault, but I had coverage for it) and again when a lightning strike took out part of my solar array and some indoor electronics. They've also promptly paid in situations where I wasn't a customer but the beneficiary of a claim and bent over backwards to make sure I was taken care of.
Maybe the problem is using an insurance company that farts out millions of dollars a quarter marketing Gecko, Jan, Jake, Mayhem, or Emu instead of investing that in claims. Though, I'll give a shout-out to my homegirl Jan back when I was in a different situation and a snowplow took a chunk out of my car. Progressive took care of me then while the city took their sweet time making good on the claim against them.
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Insurance is valid, profit from insurance is where it gets problematic cause the whole point of insurance is to have a similar average outcome, just less extremes in the worse case scenario.
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How do the 'ppl who actually know' defend this obvious scammy aspect of the whole thing? Genuinely curious
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Insurance is a pooled risk fund. Basically x% of people are going to get into accidents and therefore you'll need z dollars to cover the the group of insurees.
The downside is this means that if you're not getting in accidents, your money is paying for someone else's accident. The upside is (theoretically) if you get in an accident your covered.
While insurance companies can be scummy, the concept of insurance is basically a support network you pay into.
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What's hilarious to me is, if you're rich, you aren't legally obligated to even HAVE insurance!
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Depends on your location.
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In the US, most states only require some variation of liability-only auto insurance, which basically says if you cause an accident that is terrible for another person, someone will pony up some money to give them financial restitution. This is practically necessary to avoid situations where drivers risk facing financial ruin for other people's mistakes when the at-fault driver can't pay. Expecting every driver to have a reserve of cash sufficient to cover potentially multiple totaled cars in an accident they cause from the moment they start driving is not feasible.
Beyond that, you can generally use your own savings to cover your personal financial loss from accidents. If you don't already have a decently sized reserve, it's probably best to have some more comprehensive insurance until you've built up enough to mitigate early risk. I think most people would choose to just use comprehensive insurance indefinitely and not worry about it rather than needing to pay for insurance while also building up their personal reserve. But if you can afford to build your personal savings and aren't prone to accidents, self funding would likely save you a lot in the long term.
Insurance is basically a way of spreading out risk. It or some similar system is basically required when people are constantly risking a huge amount of personal wealth, not to mention death or permanent disability.
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you can generally use your own savings
30% of Americans have a negative net worth.
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What I meant was, it's generally legal for someone to do this. The tweet was discussing getting some sort of reimbursement for avoiding costly accidents. Having an investment account you can withdraw from when necessary is a way to do this, and is legal. I understand many people wouldn't be able to afford it.
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You could get the minimum insurance required by law and then dedicate a saving account for when you might need it.
The better argument would have been to say that there are life insurances that you can borrow against, so why not car insurances. I guarantee the reason is because of lack of demand and therefore not profitable. If people were wanting such a thing, someone would provide it, but the reasons for such a policy as well as what the collateral is are two different things.
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It's really a cost element.
Full/whole life insurance policies (ones with an account you can draw from) are crazy expensive. For just $250,000 coverage it's ~$250/month or $3,000/year (sourced from aflac website).
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And then read about "moral hazard" and try not to scream.
Yeah, insurance company, it's the customers you've got to watch out for. 🙄
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To account for what would happen if you got into an accident before giving them the amount of money it costs
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It's a fucking scam. People who act correctly and drive safely and punished while the people who are assholes and drive unsafely pay a pittance to cover the extensive amount of damage they are ultimately responsible for.
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🚅 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋 🚋
Never spent a dime in insurance on it. Never had to fix a tail light. Or deal with a flat tire. Or struggle to fill a tank.
Just pay the ticket and take the ride.
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Sounds like we need co-op insurance?
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Term life is cheaper than whole life, and generally a much much better deal long term. What this person is proposing is car insurance that works like whole life insurance.
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Just don't own a car?
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Not always possible /shrug
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That sounds like a much bigger problem than mandatory insurance.
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I have never had a claim my entire life. I'm pretty sure that I've paid more in car insurance than for the fucking car itself. But I'm happy to socialize the cost of some SUV lunatic that does millions in damage while looking at the phone.
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Annnnnd when you do get into an accident, they will increase your premium next year. They cannot loose either way
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Well, you need insurance, because I'm pretty sure you can't afford the payment for when you, say, crush both my legs.
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insurance is a scam. us insurance seems more so.
put that money in a savings account instead. if you are not living in a place where you are forced to get private insurance that is. usians are so ingrained with this insurance thing though.
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The problem is insurance inflates the prices of all the things that take insurance so much that you can't afford it without insurance anymore. I could put the money I spend on health insurance every month into savings instead but if something actually happened I'd never be able to afford the bill.
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Which is part of why it may feel like a scam, right?
Insurance should in theory be a good thing, but the manner of implementation means that on-paper costs are outrageously high, but yet your insurance company magically gets a 90% discount on everything for being "in network" - which you as an individual who wanted to pay for your own care couldn't benefit from.
It's the very definition of collusion.
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Good recent example from myself. I was hospitalized a few months ago and the attending doctor wanted to do a test outpatient once I was released. At the time I had no insurance, I was in the process of signing up. I was quoted $300 for out of pocket, so I decided to hold off a month until my insurance kicked in. That test was only a $350 copay with insurance.
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yes, that's part of the reason why it's a scam.
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We have socialized car insurance here in BC, we all pay to the provincial public crown insurance corporation. If they payout less than they anticipate we get rebate cheques.
The image posted shows the person doesn't understand how insurance works. You don't get your cash back if years u retire with no accidents because the nominal cash paid for somebody else that had a crash.
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I had pet insurance because my dog eats things that aren’t food but it tripled in price and I couldn’t afford it anymore especially since it didn’t help with this non-emergency needs so I started putting the money aside in a savings account and it was super useful. I have money set aside for his vet care and it earns interest. Not a lot but I feel comfortable that if he eats something and, we’ll be able to get it taken care of.
I don’t think it’s going to be a good idea for everyone to do it but I do think it is a good strategy in some situations.
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I have been putting £60 a month aside for my 2 cats since they were born 14 years ago.
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\ After 12 years, one of the cats got bladder stones. It took some effort to diagnose at first so he had blood tests, urine tests, more extensive blood tests, several vet visits and 2 x-rays. Once diagnosed, surgery was arranged and the stones were removed.This completely wiped out my cat health fund.
I continued to put the money aside, and then the same cat developed diabetes. So I now have another monthly bill of £40 a month for insulin and needles.
My recommendation is to get insurance. Its always a gamble, but that money you spend on insurance could offset 1000's in vet care.
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Health insurance in the USA maybe and a couple of other insurances may seem that way. However your private saving can only be so much. Get into an accident in your car - the 10 million in damages is paid by the insurance. Your car is broken afterwards and you manage to cause an accident on your bicycle- the damages is covered by your normal damage insurance. You are injured - the costs are not covered by your insurance. Hence you sue the insurance - your legal insurance covers the six-figure legal fees.
Now I could spin that further without deviating much from reality - even in Europe. Yes technically you're better of saving the money instead of spending it on insurance - that however is a gamble on your bad luck. Great if it works out - there's likely no way you could ever save enough to cover all eventualities
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I'm sure I've become more conservative since being active on Lemmy. Shit like this is why.
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Mmmm, insurance company boot.
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Haha, I know the feeling. You aren't going right, everything else is moving left. That's just the progression of politics.
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The "leftists" here are some of the most conservative people I've ever interacted with.
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This post combines two of lemmites favourite past times.
Car hating and being clueless to how things actually work.
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Car hating
True, but this is about insurance. It's only incidental that it's car insurance but this applies to home and health insurance too.
clueless to how things actually work
Are we really clueless or rather idealistic? Because OOP is talking about how she would expect things to work in a fair world, which is a common sentiment. Everyone in the comments here is either trying to explain why this doesn't work or expressing how it could work.
I find it quite ironic to criticize us for allegedly not knowing how things work while simultaneously failing to grasp how the community works when the comments are right there, and also not staying accurate to the content of the post. Double whammy.
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It's not car hating, at all. It's a car owner who explains why the world owes him money.
Before Lemmy, I would have pegged this as typically US conservative: Self-centered morons who refuse to learn things and instead make up conspiracy fantasies about how they are robbed. It's basically how you get the Trump tariffs.
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I never understood why it's legally mandatory to pay a private company just for the privilege to drive a metal death box (death metal box?) on poorly maintained yet tax payer-funded roads or get punished with debt if I don't?
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Not sure if this is the case in the US but car insurance is supposed to cover the damages you cause when you destroy something with your car. Nobody cares if you can pay for the damage on your own car, but if you crash into my house or my car you better be able to pay the damages! That's why it is mandatory. To protect others from your actions.
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Conversely, you can also just drive around with no insurance at all and still do all the safety things and be terribly careful as if you had insurance.
Most can probably go through life without ever having to use the insurance or be stopped by the police.
And if you ever do get into an accident, if it's not that serious, you'll end up paying the same amount up front as you did if you had made regular payments over many years.
If it's serious, no matter how you deal with it it's going to be expensive ... with insurance it will cost you ... without insurance you'll probably end up in prison.
Tune in for more from my TED talk
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Most can probably go through life without ever having to use the insurance or be stopped by the police.
this is anecdotally super wrong.
I drive like 15,000 km a year (VERY LITTLE) - in the past 20 years I've hit probably a half dozen ride programs and been rear ended twice by someone else while fully stopped at a red light
While I've never had to actually file an insurance claim, there have been plenty of times I've had to present it
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Many police now use automatic scanning to check for valid registration or insurance. There are also some heavy penalties for driving without insurance. Something like a simple RIDE check (impaired driving check point) could reveal you have no insurance and you could face a lisence suspension. You could also be subject to an expensive lawsuit if you do hit an expensive car in an at fault accident.
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yeah but the us is a dictatorship. fairer countries probably aren't forcing you to pay private insurance nor they are scanning your plates.
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Where I live, the part of the car insurance that covers damages on others and their property is mandatory.
The insurance for yourself and your own car is optional, but I think it's fair to require some kind of guarantee that you can cover the potential damages that you are able to do to others with a car.
Cops will stop you, if you don't have the mandatory insurance, have unpaid car taxes, use fake license plates or skipped the EU check. Police cars have automatic license plate recognition to check that sort of thing.
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193 comments
And the best part is it's mandatory!
Gotta pay the capitalism toll.
Well, only the liability part and that sorta makes sense
So the person who hit you and totaled your car can hire a lawyer and sue the shit out of you, which your insurance will settle out of court for an undisclosed sum, and they get to walk away with the money, you get Jack shit, and to top it all off, you don't even have a fucking car anymore.
Don't get me wrong, I'm in favor of insurance when it comes to 1000+ lbs death machines that go barreling down the road at speeds faster than the fastest land animals as part of normal usage, while packing more kinetic energy than a high caliber bullet.
.... It's just... Those laws aren't there for you, they're there to protect the rich. After all, you might hit their Porsche with your Honda, and they don't want to pay for that.