Make Car Insurance Fairer

Wouldn't it be a great idea if the oil companies offered all-you-can-drive gasoline? For one fixed price, you could drive as much as you wanted. Of course, this is ludicrous. It would be massively unfair. It would create terrible incentives. Yet this is how auto insurance is sold. Some insurers offer a 15% discount if you drive less than 7,500 miles a year. But beyond this distance the price is fixed. People who drive 10,000 or 100,000 miles pay exactly the same premium.

Econ 101 says that when something is free, people consume too much. In this case, all-you-can-drive insurance encourages people to drive more than they otherwise would if they had to pay the full cost of each mile. The heavy drivers don't bear the total costs related to their actions--hospital bills, body shop bills, highway congestion.

Low-mileage drivers (e.g., women, who drive half as much as men) get a raw deal. Fixed-price insurance hurts Detroit, too. More people would choose to have second and third cars--maybe a ragtop for weekends?--if the extra insurance weren't so expensive.

So what should be done? Simple. Charge drivers for insurance on a per-mile basis. That does not mean higher average insurance rates. It does mean that the low-mileage drivers would stop subsidizing the high-mileage drivers. If the per-mile fee reflected the incremental risk, Berkeley professor Aaron Edlin calculates that driving would be cut back by 9%, with an insurance savings of $8 billion a year and an additional $9 billion savings in reduced congestion. Not to mention the environmental benefits of reduced fuel consumption.

Proposals for implementing usage-sensitive rates go way back. In 1963 Nobel Prize-winning economist William Vickrey suggested that insurance be included in the purchase of tires. Anticipating the objection that this might lead people to drive on bald tires, Vickrey said drivers should get credit for the remaining tread when they turn in a tire.

Andrew Tobias proposed a variation on this scheme in which insurance would be included in the price of gasoline. That would have the added benefit of solving the problem of uninsured motorists (roughly 28% of California drivers). As Tobias points out, you can drive a car without insurance, but you can't drive it without gasoline.

In Vickrey's time, turning back odometers was, perhaps, too easy. With digital electronics, rolling back the odometer is much harder. It is also illegal. Odometer readings are good enough for car leasing--why not for car insurance?

Alternatively, an insurer could monitor distances driven using the Global Positioning System. As this magazine noted earlier (Nov. 27, 2000), Progressive Corp. had a pilot insurance program using this technology.

GPS could slice the risk equation more finely. Highway mileage could be given a discount, and nighttime driving could be charged a premium. Speeding could also lead to higher premiums. To put a positive spin on it: You safe drivers would get the discounts you deserve.

Why has the insurance industry been so cool to mileage-based pricing? An established insurer might be reluctant to adopt it because it would lead to higher rates for half of its customers, and that half would be angrier than the other half would be pleased. Pay-per-mile insurance makes the most sense to a company that is trying to grow and to attract more women customers.

Another stumbling block is that some states make it very difficult for insurers to provide this product. Patrick Butler has been working for some 20 years to get the law changed to bring per-mile insurance to the marketplace. With the support of the National Organization for Women, he has drafted model legislation to allow firms to offer per-mile insurance.

In January 2002 Texas became the first state to explicitly permit per-mile insurance. There is mileage-based insurance legislation pending in both Oregon and Georgia.

In the U.K., Norwich Union, a major auto insurer, has already rolled out a similar plan. Early indications suggest that customers who drive less than the norm are saving, on average, 25%.

There's a lot you don't get. I never said it didn't exist, I said you (post 72) couldn't make a blanket statements because the laws vary drastically from state to state. You said (post 74) you were comfortable making that blanket statement and went further to say that proof of financial capability was the "most the law can, or need, require". I showed (post 77) that indeed AZ required third party insurance. You came back 3 days later (post 81) and misrepresented ASRS 28-4007 without bothering to provide a supporting link. I (post 82) quite easily tracked down 28-4007 and found that it applied only to those with fleets of vehicles and those REQUIRED by other statutes (generally tied to chaffeur businesses) to provide proof of financial reliability. You then (post 86) back tracked to a completely different part of the discussion, one I'd already explained wasa joke. And now finally you're able, after much needless tooth pulling, to "recognize it is not a guarantee"... which is all I said in the first place.

Now you're scrambling for more, desperate to win something. I stand by my statement that their (insurance company representatives) job is to get as much money out of you as possible. Actually that's the job of EVERYBODY in business, that's called capitalism and I see no problem with it. There's no malice or condemnation in the statement. My job in the software company I work for is to help them get as much of your money as possible. The job of the waitresses at the Hooters my window overlooks is to get as much of the patrons' money as possible. If you have a job in a free market then your job description boils down to "get money from customers, get more customers, repeat". And our jobs as consumers is to give the business as little money as we can, that's the give and take of a free market. There's nothing ignorant, inciteful or lieing about it, and it's not a joke. And if you don't understand that it's time you picked up some Adam Smith and did some learning.

Recognition of creative editing (also known as LIEING) on your part. Let's look at the very first sentence I wrote in 94:
From my read of 4007 (post 82) I don't think it's available to the general public.

Gee since I quoted section C maybe you should read it. Having your certificate yanked on 5 days notice is pretty ugly. Also having only 30 days to payoff any settlement is pretty nasty. Of course the problem of having to own 25 vehicles (section A) is also rather daunting.

Who's avoiding a question? And I VERY DIRECTLY answered that question in post 82:
I don't own 25 cars.
I also don't own any kind of chauffeur business.

Which means, according to ASRS 28-4007, I CANNOT self-insure.

Of course if I could (ie if I met the requirements of 28-4007 section A) I'd then have to post a $40,000 bond with the state. Little pricey.

Keep it coming lautzu. Now not only are you a whiney rat that can't admit when he screwed up, you're a LIAR. keep misquoting me LIAR. Keeping saying I'm avoiding questions I've answered multiple times LIAR. Bring it. You've got nothing. You were wrong in your initial assertion and all your doing now is trying to obfuscate, but you can't.

You simply must go back and read post 92; the 28-4804 section clearly states that a person can post a bond to satisfy the financial responsibility law as long as that person has no outstanding judgements against him and he doesn't meet the use restrictions in article 2.

Perhaps you should read all of the sections in article 2.

Click on the link and read it carefully, but in any case it isn't worth starting a war over.

Well 4804 is about abandoned vehicles, I'm not sure which section you're refering to. I've read all of article 2 (4031 - 4037) and all it does is describe what the financial requirement is. 4007 is still the one that applies directly to self insurance, and section A is pretty clear (my emphasis, obviously):
A person in whose name more than twenty-five motor vehicles are registered or who is required to comply with the financial responsibility requirements prescribed in article 2 of this chapter may qualify as a self-insurer by obtaining a certificate of self-insurance issued by the director as provided in this section.

There are only two groups who can self insure in AZ: people with fleets and the list under article 2 (chauffeur, hazardous material, shipping, all corporate type stuff, non-profit car-pool is specifically exempted).

If that's not clear enough we go to section D of 4007:
D. A person who is required to comply with the financial responsibility requirements prescribed in article 2 of this chapter may apply for partial self-insurance to cover any portion of the financial responsibility requirements.

Again the general public is left out. There's nothing in there saying that any old person can do it. For partial it's just people required by article 2, not even the 25 vehicle people can do that. In both cases (full self-insurance or partial) we have exclusive lists that do not include the average shmo on the street. And there's no indication that the average shmo has this option.

Aaron Edlin calculates that driving would be cut back by 9%, with an insurance savings of $8 billion a year and an additional $9 billion savings in reduced congestion. Not to mention the environmental benefits of reduced fuel consumption.

This sentence says it all. This is about environmentalism. Insurance companies study statistics and demographics constantly in an effort to better tune their rates. If mileage was such a good indicator of risk, all insurance companies would be using it (I only have one company that uses mileage as part of the rating). The relatively recent addition of credit scoring to the rating model is an excellent example. Not too long ago, I didn't have any companies that used credit as part of the rate calculation and now all but one of my companies (the same company that uses mileage) use credit scoring.

When it comes to the premiums we pay don't forget these two true stories. #1 - driver bumps into a car in a store parking lot, woman in bumped car sues for $100,000 and husband sues for $50,000 for loss of affection. Insurance company settles for $47,500. Damage to woman's car from the "bump" was $375. She ripped all of us off with her phoney lawsuit. #2 - driver bumps into car on highway, no injuries until someone convinces person in bumped car to go to doctor. Lawsuit filed, she collects $21,000, damage to her car under $1000. Another phoney lawsuit. This happens many times each year and we all pay for those fraudulent lawsuits and settlements.

" you a whiney rat..screwed up, you're a LIAR..LIAR..LIAR"

Pants on fire?!! (a little discostu humor there)

You are a most charming individual, with an extensive vocabulary. I'm afraid I can't match that sense of humor though.

Please, continue to bash the insurance industry at will. With a work ethic of 'get as much money out of the customer as you can', you will continue to be a shining example of capitalism. You must be overrun with repeat business.

Oh...that's right...that sense of humor thing again. Good one. I never can tell when you're joking. If it's not too upsetting, could you please leave me with one more tirade?

Thanks in advance.

Hey you're the one that blatantly and deliberately misquoted me twice. That makes you a LIAR and if you can't accept it that's not my problem.

Oh and here you go again. Where have I bashed the insurance industry? Show me. Quote it, in WHOLE not in creatively edited part. As I've said, I have no malice to the insurance industry or those in it. That's not my work ethic that IS CAPITALISM at it's heart. No business wants to leave money sitting on the talbe that it could have gotten. Why do you think waiters always ask if you want desert? Do you really think they're worried you don't have enough sugar in your system? They want to get more of your money. Why does fastfood always have a "suggestive sell"? More money. Why do grocery stores put things you buy impulsively at the check out counter? More money. Why do they stick the two most commonly purchased things (milk and bread) on opposite sides of the store? Make you walk through it so you'll think of something else you need and they get more money. Why do car dealerships try to talk you into extra features? More money. Why does the insurance company you work for offer a discount to multiple policy holders? In encourages people to not shop around and gives the company more money.

And once again, it's not a joke (which I specifically said before, but being a born LIAR you of course ignore that completely). That's capitalism, that's smart business, there's nothing wrong with it and if I'm going to be disappointed in a company it's going to be because they didn't try get my money. That means they're heart isn't in it and their product probably sucks. No tirade here, though I'm sure you'll see it that way, you're the type of person that always takes being wrong personally. That's why you're still beating on this horse, when you could have admitted 5 days ago that not all states allow self-insurance.

First let me thank you again. That was an excellent.....hmmm...response.

"I already told you it was a joke....And once again, it's not a joke"

Oh boy! Riddles!!

I give up. Why does a waiter ask if I want desert?

"Where have I bashed the insurance industry? Show me."

"Auto insurance companies are mean".... "Insurance isn't socialism, it's a bet".... "Their job is to get as much money out of you as possible".... "The company is betting..."

And you consider yourself a friend to these people? I'm sure you meant all those in the good way.

Santa knows whose been naughty.

Way to deliberately misqoute, again, proving, again, that you're a bloody LIAR. For the clarity of home viewers:
"Insurance is a bet, you're betting you'll have an accident, the insurance company is betting you won't" is a joke. It's a variation on a joke I heard when I was 8 from a life insurance salesman my mom worked with, given that he sold life insurance I'm sure everybody can figure out the original.

"Their job is to get as much money out of you as possible" isn't a joke, it's a compliment. God bless capitalism.

I'm pretty sure anybody with 3 firing brain cells could have easily told that by context, but since you're going out of your way to be a lieing nitwit I'm forced to cut you off at the pass and show quite explicity your pattern of LIES.

Hey, then you go on to quote in craftily edited slices even though I specifically said to QUOTE IN WHOLE. Of course if you quote in whole it will show that you're full of crap, so you can't do that. To take your quotes:
"Auto insurance companies are mean" - they are, nice people don't refuse to fix your car. Of course my favorite NHL player (Lanny McDonald mostly of the Leafs and the Flames) was mean too, that's what made him a good and entertaining hockey player. Then there's Lyle Alzedo, the guy that used to growl at opposing linemen, definitely mean. It's not a bash. It's just a statement of truth, and with some professions it's a compliment
"Insurance isn't socialism, it's a bet" - you'd rather it be socialism?!
"Their job is to get as much money from you as possible" - again, GOD BLESS CAPITALISM.
"the company is betting..." - a joke, 4th time I've explained it to you.

I never said I was a friend of these people either. I said I hold no malice towards the industry and I'm not bashing it. you see there's like, there's dislike, and there's not care. As industry I really don't care about insurance. It's there, I use it, I'm still not convinced auto insurance should be mandatory, but I'd use it anyway. Some companies are better than others, no big deal, I'm with a really good company, still gotta watch them and make sure I'm not giving them one dime more than I should. But in the end it's just insurance, not really that exciting.

No wonder you don't make any sense. You still believe in Santa. Gonna go visit the Easter Bunny soon?

""Auto insurance companies are mean" - they are..It's not a bash. It's just a statement of truth..it's a compliment."

I knew you meant it the good way. And you say your not their friend. Poppycock....you're a sweetheart.

Joking...not joking..what does it matter? As long as it makes an eight year old laugh, we can say we're doing it for the children. (no more bad-mouthing Santa though)

While you have provided reason to doubt that self-insurance is an option, there is also reason given to believe it is. Shall I research it, and let you know either way?

It is more fun to bad-mouth insurance companies, and claim it was a compliment or a joke though. I'm not sure what to do here....you decide. You old-smoothie....you're a hoot. Don't forget to write!

More creative editing. I said it was a compliment for SOME professions, like NHL defenseman or NFL lineman. With insurance companies it's just a necessity, they can't go blowing 5 grand to repair a car that's only worth 2, bad economics. So sometimes they have to be mean and tell you it's dead, totaled, get your stuff out, we've got somebody in Mexico willing to pay us $20 for it. Or are you trying to say that it was nice last year to find out that my wife's car was totaled out? I'm not arguing that they shouldn't have, I understand the financial necessities, but telling people that the car they've loved and taken good care of for 11 years is now scrap is pretty mean.

It's a funny joke, get over it. Like all good jokes it takes a core nugget of truth and exhagerates it to silly proportions. You yourself said (correctly) that insurance is about risk management. Part of risk management is playing the odds. Part of gambling is playing the odds. Of course they're playing the odds in completely different ways for completely different ends. But they're tied at the hip. So by calling insurance betting, I'm exhagerating to the point of rediculous the risk management part of insurance. That's how jokes work.

I didn't say self-insurance isn't an option across the board. I said state laws vary too much to be able to make a blanket statement. When you said you were comfortable making a blanket satatement I showed that it's not an option available to the general public here in AZ. It very well might be an option in all 49 other states, doesn't matter I was right, it's not a safe blanket statement to make. I was right, you were wrong, you even admitted it yesterday. The jig is up, now you're just scrambling around trying to be right about something. Here's what you do, look at your window then tell me what the weather is like where you're at, I'm sure you'll be right.

I'm not badmouthing anybody but you. That's what happens when you lie about what I say, you put yourself in the enemy column and I treat you like dirt. Stop lieing about what I say and apologize for your past lies and I'll be nice to you again. And I didn't badmouth Santa either, I don't badmouth imaginary things, especially if I'm not the one doing the imagining. It's up to you to decide if the Santa in your head is good or bad, not my problem.

"are you trying to say that it was nice last year to find out that my wife's car was totaled out?"

Yes...that's exactly what I said.

"With insurance companies it's just a necessity(being mean)"

Gee. There's just no agreeing with you. I said that you meant it in the good way.

"telling people that the car they've loved and taken good care of for 11 years is now scrap is pretty mean"

An eleven year old car damaged in an auto accident; and it's not worth repairing?!! Who would have guessed? Plus, the insurance company was "mean" enough to state this, as if it were obvious? Those heartless bastards! When you put it that way, I see your point.

"It's a funny joke..."

Hey...I said my knee was getting slapped. How long do you want me to laugh?

"you put yourself in the enemy column"

I've done nothing but agree with you today. I've even complimented you. Now, you've got me in some kind of "column"!! On the other hand, you did call me "mean". So...I've got that going for me. Won't you be my neighbor?

"I showed that it's not an option available to the general public here in AZ"

Other information provided here suggests that it is an option. Our disagreement boils down to whether it is, or not. I bet it is(hey look!!I'm betting!) I don't know, but have offered to find out; repeatedly.

Does your interest go any further than protest and insult? Appreciating that you found being told about your car "mean", nailing down this point of trivia could well be too traumatic.

Despite being on your enemy list, I am concerned about you.

Your chain has the sweetest clang to it.

Right it was really nice, that's why she cried. I'm not saying they were wrong, but it sure as hell wasn't nice. Sometimes right is mean, I recognize that, which is why I said mean isn't bashing. Who's the one living in denial here?

You've constantly lied today, and now you're just being condescending.

Other information presented here was misintepreted. Article 2 doesn't deal directly with self-insurance. It only lists who MUST prove financial responsibility and how they MUST go about it. 28-4007 says that ONLY those that MUST prove financial responsibility and those than own fleets CAN self-insure. It's all either been quoted here or linked. Go ahead, prove me wrong. All the information has been here for two days while you've whined about me being mean to your industry and lied about what I've said. As for your offer, since YOU'RE the one making the assertion then it is your DUTY to back it up. You haven't offered anything, you're just dodging and weaving because you've already been proven wrong and you're not man enough to admit it.

My "interest" was in being nice and warning you against blanket statements that wouldn't be right across the board. You're the one that's turned this into a pissing contest, and typical for people of your ilk you're the one that's gotten all wet.

"it was really nice, that's why she cried"

What a terrible thing to say.

"it sure as hell wasn't nice"

It was nice...it wasn't nice? Does "wasn't nice" = "mean"?!!

"now you're just being condescending"

Me?!!!.....never.

"All the information has been here"

I really must caution you about making such blanket statements. A great portion of relevant information remains un-posted.

It was sarcasm, you insisted it was nice of them, I pointed out the clear evidence that it wasn't. So far we know that laotzu doesn't understand either humor through exageration or sarcasm. You probably don't get puns either.

Old Professor posted a link to the ASRS Motor Vehicle Regulations. That really is ALL the information you would need on AZ. And since AZ clearly doesn't allow non-commercial self-insurance that's all we need to know that you were wrong, 1 exception state shows that your blanket statement was in error. All this because your ego wouldn't allow you to use a convenient qualifier like "most" or "all the states I'm familiar with". There's an abject lesson here that's going over your head.

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