Posted on 03/03/2009 11:38:17 AM PST by IsabellaLouisa
A conservative radio host in cold Buffalo NY wrote this. Posted on his Web page. Love it.
Newsradio 930 WBEN-AM / Article Author: Tom Bauerle/The Tom Bauerle Show
AUTO INSURANCE AND THE NEW ECONOMICS
If you drive, you know how much of a squeeze automobile insurance can be on the household budget.
In a nutshell, bad drivers pay more. Good drivers pay less. This is not breaking news. You know that when you receive a traffic citation or rear-end someone in traffic, once you know everyone is alright, one of the first things you think is, "Argh! What will this do to my insurance?" Maybe you've even found yourself approaching a stale green light or exceeding the speed limit and thinking that you'd best slow down, as you don't want to pay more for insurance if you’re caught breaking the rules. Auto insurance companies , of course, use many factors when determining how much money to charge you to assume the risk of covering your losses. One of the most reliable predictors of future behavior is past behavior, and as you know, chargeable accidents and moving violations will increase your cost of insuring your vehicle. Those “surcharges” after an unfortunate accident also contribute to what might be an already-dwindling insurance budget.
Of course, you are free to shop around for a lower rate, but auto insurers are not stupid. They have years of data and actuarial information upon which they base your costs for auto insurance.
Good behavior is rewarded with a lower cost of insurance. Bad behavior is penalized with a higher cost.
But what if an auto insurance company changed the rules? What if good drivers paid the same rate as bad drivers?
This would be great for irresponsible drivers but a nightmare for people who've played by the rules and who've exercised caution. It is obvious that the good drivers would seek another company that continues to reward their good driving, because it is not in their best interest to pay more to subsidize bad drivers.
Of course, if there were no other option, the good drivers would be stuck without an alternative. In such a scenario, one might predict that the good drivers, without the cost-saving incentives of remaining good drivers, might begin to behave like the bad drivers.
Speeding ticket? So what.
One more drink for the road? So what.
Light just turned red? So what.
Sure, you'd be hit with a fine if caught, but your insurance isn't going to skyrocket.
We would never tolerate such a situation on our roads, yet America in 2009 is heading down the socialist road where there are diminishing incentives for responsible behavior.
Bought a house you can afford? Now you can pay to help people who didn't.
Earned a degree, busted your hump, and make good money? Good. You're rich. Pay more taxes.
The current government-sanctioned class warfare and disincentivization of the productive class will have the same effect on our nation as the fictional insurance company portrayed above.
Being responsible isn't always easy. Self-control takes willpower. Playing by the rules isn't always cool. But many of us do it. We are responsible and we play by the rules because these are the right things to do. Unfortunately, along the aforementioned socialist road, it won’t matter anymore.
We are, I fear, becoming a country where the productive responsible will have no incentives to remain so.
Bad analogy; should be “What if good drivers paid a higher rate than bad drivers?”
I love this. Dead on!
Welcome to FR!
Good post!
Here in Maryland democrats outlawed giving discounts in home owners insurance to us with good credit, this in raised our rates to pay for the bad credit people, many of which abandoned their houses.
The key is that health care and housing education services are rights to democrats, the new constitution. diving is NOT unless you are illegal in Maryland.
Thank you for comparing the realm of social politics to the twisted world of car insurance. My two year old can find a better metaphor.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.