Inspiration By Experience

Archive for the ‘auto insurance’ Category

It makes no difference what the activity, when you’re learning something, you make mistakes. On the football field, it makes no difference if you crash into other players. You’re all players together and no innocent members of the public are at risk. But if you apply the same approach to driving, there can be a lot of innocent victims. So insurance companies group all inexperienced drivers together. The younger the driver, the higher the premium. But, as time passes, and you build up a track record of safe driving, the rate comes down. There’s a general policy to review your safety record on a regular basis between 17 and 29. In general, all drivers under the age of 25 pay the highest rates but, assuming no accidents, the rates will slowly scale down. Single males are judged the most dangerous. The statistics show young female drivers are significantly safer.

The rates come down faster if you marry and have children. Now as the owners of vehicles likely to be carrying your family, you are assumed to have a safer approach to driving. Even if you don’t marry, you still earn a lower rate if you’re the owner of the vehicle. It’s assumed you’ll drive your own vehicle more carefully. This leads to a more general point. If parents insure their children, they pay the penalty if there are accidents or convictions. Premium rates are likely to triple or cover may be refused if underage children are caught driving while intoxicated. The same can apply if they are caught for underage drinking even while not driving. The parents are likely to face nonstandard rates or surcharges. Perhaps curiously, DWI/DUI convictions can also affect other home-based policies like those covering a jetboat or snowmobile. These higher rates will stay in place until the child leaves the home and will no longer be a driver of the family cars. This makes it better to encourage younger drivers to take out a policy in their own names. The sooner they learn the cause and effect of financial responsibility the better. Read the rest of this entry »

There’s an increasing disconnect between what the TV ads are saying about the rates for insuring your vehicle and the quotes floating into your inbox. The marketers would have you believe there’s no problem in finding really cheap insurance (but only with their company, of course). Yet the insurance industry itself funds the Insurance Information Institute as a research body. It regularly publishes studies. Mostly, they are uncontroversial. So it came as a surprise when it revealed a steady rise of some 10% in the premium rates between 2008 and 2010. The latest straws in the wind are also suggesting a further rise of some 4% this year. When you consider the rate of inflation has been zero – there has been a recession, after all, and many prices actually fell – it’s a disgrace the insurance industry has been pushing up its prices.

Yet, when a talking head does appear above the parapet to talk for the industry, the message is always the same. The rates are going up because the repair and medical costs have been rising faster than inflation. Indeed, when you look at all the evidence on medical costs, you can believe what these insurance apologists are saying. Then you have to ask yourself about the value of the US dollar. It’s been falling steadily over the last three years. So the cost of all those imported spare parts from foreign manufacturers has also been rising. If these same insurance companies were not announcing increased profits to their stockholders, you would almost feel sorry for them. Read the rest of this entry »

It would be a wonderful world for everyone if we could all get past this cult of selfishness. As an aside, we can note with ironic detachment that the first film in the planned trilogy of Atlas Shrugged is struggling to cover its costs. Indeed, so poor is the box office, we may never see the second and third parts made. It seems the Tea Party and Libertarians resist the idea of paying for admission to see their favorite story on the big screen. Ah well, such are the priorities of the Right when asked to pay for anything. Which brings us to the progress of Assembly Bill 299 in Nevada. If you ask the Republicans, this is the worst piece of redistribution since Karl Marx first thought up the idea of communism. First, let’s consider the problem.

When you drive around our great nation, there’s a one in five chance the driver of the vehicle crashing into yours is uninsured. This woeful state of affairs persists despite there being a mandate requiring all drivers to carry a minimum of liability cover. The practical reality is a lack of enthusiasm to enforce the laws. Since most uninsured drivers feel they stand a good chance of avoiding prosecution, they save the money and leave the rest with the risk. Yes, that’s right. Unless you paid for collision cover and, possible uninsured/underinsured cover, you pay for all losses arising from the crash out of your own pocket. So you have what the Brits call Hobson’s Choice. You either pay more in premiums or you pick up the bill for all losses. Either way you pay more. If the law on mandates was actively enforced, we would all pay less – assuming, of course, the insurance companies would pass on their savings to us. But if you ask politicians to fund active enforcement on budgets in deficit, they back away (usually on foot), claiming it’s more important to use the little money available to keep schools open and pay someone to keep the streets clear of rubbish.

Read the rest of this entry »