All insurance companies and lotteries take in huge amounts of cash and pay relatively little back. The whole economy is a scam if everyone needs “insurance”.
The biggest thing with auto insurance isn’t covering your car, it’s covering the cost of whatever you hit sueing you.
Your car may only be worth $3,000, but if you hit a pedestrian and they require a dozen surgeries and are wheelchair bound for life, you bet you’re ass you’re getting sued for a few million in medical costs.
In a reasonable country, those medical costs would be free, but since they’re not you need some sort of protection against once accident bankrupting you in civil suits.
In a reasonable country, public insurance would charge your auto insurance to recover costs. The harms and risks of car ownership don’t need further subsidies
Why is car insurance so expensive in all the other countries then?
Even in countries with universal health care surgeries aren’t typically free. They are just paid by a public health insurance. That health insurance will pay at first but it will try to get it’s money back from you if you injured somebody.
Repair costs for two vehicles outside the US is probably just as expensive as a doctor’s visit for a single person inside the US.
Real answer: in most other countries you can be punitively sued, ex: if a person wants to recoup the emotional damages from being crippled. You can also, depending on the country, be made to cover the cost of services provided by the medical system if you were found to be at fault (I don’t know how often that happens for an individual vs. a large company, but that’s how the rates were explained to me by a UK colleague)
Plus there are things not covered by healthcare, and loss of income etc
In addition to what everyone else said, property damage is a big part of it as well.
Let’s say you run into a building and knock out a load bearing wall. Or plough through a business or government office. It’s not impossible to rack up a couple million in damages if you crash bad enough.
##ItsAScam
Third party liability for my policy is a few million last time I checked, if you somehow cause a heavy truck to crash or damage a piece of infrastructure you can run into those figures pretty fast.
I never really thought about that before. That’s probably why america hasn’t had healthcare for all, the insurance companies are lobbying (bribing) the shit out of the republicans.
I DETEST both-sides-ism, but yeah actually in this case, both sides are being bribed and blocking true progress, just the paid off Democrats have been doing it more quietly by slow playing and avoiding real single payer solutions when the party actually has power.
When was the last time they had enough power to pass anything like that? It would take a 2/3 majority.
Health insurance companies are lobbying the shit out of both parties. Car insurance companies would love universal healthcare. It would drop their outlays which would increase their profits.
Maybe you’re right and I’m wrong, that would make sense.
I have no insider knowledge, that’s just my bullshit take.
Even in a country with „free“ healthcare, if you are at fault for the accident, your car insurance will have to reimburse the other parties health insurance for their medical costs.
It’s in you’re contract how much they’ll pay out for this. $50-$100k is common. After that it’s on you. But you’re right in the sense that law suits often happen to seek this amount.
Wait to get hit?
I don’t think you’re doing it right.
Step 1 make sure you have gap insurance.
Step 2 never make more than the minimum car payment.
Step 3 when your ready for a new car, side swipe a car on the left and drive into a brick wall on the right. Make sure there are no cameras.
Step 4 enjoy your new car.
Step 5 commit identity fraud so you can keep a low insurance premium!
Step 6 do none of this because it’s all crimes. I really hope you read the instructions to the end before starting.
I really hope you read the instructions to the end before starting.
“Remove the diskette from its protective envelope” (it stayed in the box)
“Take the diskette by one of its corners” (“What corners, it’s round?”)Hi, I followed your comment while reading it. I’m stuck after step 3, the police are asking lots of questions. Pls help.
New number
Who dis?
I’m currently having some suspect cardiac issues, but my insurance won’t pay for “preventative” treatment. I t seems I have to have, and survive, an actual heart attack, in order to be reimbursed for my treatment.
So, just like car insurance, where you can claim only after an accident.
It’s fucking stupid and makes no sense, because AFTER an incident is far more expensive…
I don’t mind paying for auto insurance, but I also get more out than I pay :(
I probably pay in 5-6k before my car gets totaled and I get a payout higher than that before I start the process again.
Just once I want to be able to keep a car to the point where it’s actually paid off …
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Where do you live that you total a car every so often you don’t even pay them off
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What cars.? There’s no way somebody survives more than 2 totals, are you good?
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Do you still want to drive after all of this?
To point 2, do you know how easy it is to total a car? If you have any appreciable damage to the vehicle, it can be enough to total it. 2 of the crashes I’ve been in were parking lot speeds and it’s still enough to total it. Like, a light tap (<15mph) to the pillar separating the front and back doors is enough to total a car if it’s not worth a ton
When your car is “totaled” (from the perspective of insurance) it just means that it would cost more to repair your car than your car is worth.
Mild hail damage can total a cheap/old car, even if you only need to replace the windshield for it to be drivable.
How cheap are we talking about???
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There is plenty to criticise about insurance companies, how did they stumble upon the one thing that is fine?
A lot of people can afford an insurance premium, and perhaps a deductible, but won’t have enough for a $40,000 liability even if they saved for years.
What is suggested in this post is not much different from the past where poor people simply went on not having coverage and ended up in indentured servitude working off debts with manual labor like picking rocks. It’s also just a thread away from Health Sharing Ministries, which is just a catastrophic failure whose nuance cannot be accurately depicted in a short comment.
Well because if you crash right after making the insurance there won’t be enough in your “savings”.
What if we do pay insurance and never get hit?
To me, both are not ideal. But somehow we as a society have accepted one as default and other as an extreme.
And the default one just happens to benefit the “shareholders” and not the everyday people.
(Btw the taxes we all pay could easily cover the costs of occasional accidents, and accidents could be reduced by proper regulations)
Some comercial insurance, workers compensation specially, have something called technical excesses sharing where the insured company give back some money if the client company had less claims that the premium paid. But that only offered to really big accounts.
And this would only make the insurance that much more expensive to everyone.
Conceptually at least, if you never get hit, your premiums paid for the repairs of other people that did.
That’s the idea, no one knows if they will get in an auto accident. Most people cant absorb the cost of the ramifications. Instead of every person saving the full amount to replace their car, pay for hospital stays, make someone else whole (which is a ton of money out of the economy and you know for sure a lot of people wouldn’t be responsible enough to do that) we recognize that the number of people exposed to being in an accident is less than the number of people that will be in an accident.
Everyone pays into the pool, if someone has an accident they get to take more out than they put in by design.
That’s where your money goes if you never get in an accident. Insurance companies also make a profit by managing that pool of money, and they are incentivized to only insure good drivers or collect more money from bad drivers (which is why rates go up if you get in an accident)
The alternative is that everyone starts their own savings account, one that would almost definitely cost more money, and the number of people that would just not save anything is probably pretty high because they would know that they can’t realistically save up enough.
There are comprehensive insurance policies where you can file a claim to get a repair done. It’s not cheap AND they’ll raise your rates, but you can get it :)
It’s not a scam, it’s just how companies work. By definition, every instance will pay out less than they collected in payments. They have to pay their employees, their offices, taxes an yes, also their shareholders. That’s why, on average, insuring something is always a loosing bet.
You should only insure yourself against things that are potentially threatening your or your family’s existence: Liability, health, home, occupational disability, survivor benefits. For everything else it’s almost always better to just put the money into an account to have it at hand in case.
You should only insure yourself against things that are potentially threatening your or your family’s existence: Liability, health, home, occupational disability, survivor benefits.
That, and anything that’s legally required (such as auto insurance if you want to legally drive a vehicle)
Insurance should always be public. If you feel the need to say things like “companies need to pay their shareholders,” you are only one braincell away from saying “gotta keep the lights on”.
Why should a travel cancellation insurance or a mobile phone insurance be public? You can take out an insurance for almost everything, from wedding insurances for when your spouse gets cold feed to alien abduction insurances. I don’t see why the state should be involved in that.
And of cause companies need to pay their shareholders. That’s how our economy works. Even if an insurance is state funded, it needs seed money, and that money costs interest. Either the state (i.e. you) pays the interest, or the insuree (i.e. you) pays the interest, but it has to be paid for either way.
Nobody’s talking about wedding insurance. The OP specified car insurance that you are legally required to have in many places in the US.
Nobody’s talking about wedding insurance.
I am. You know that topics can change or broaden during a conversation? I was explicitly talking about existential and non-existential insurances, and buttnugget responded with
Insurance should always be public.
which then would also include non-existentials. Also, car insurance in its broader sense is neither existential, nor is it legally required. What is required, is liability insurance for your car, because not having it and causing an accident could destroy the existences of you and your victim, by putting you into bankruptcy and your victim unable to realise their claims against a bankrupt person.
You can also insure your own car against all kinds of damages, from theft to engine failure, from collision to hailstorms. But that is not legally required, and usually it’s also not existential, unless your existence was threatened by loosing your car. Even the OP talks about non-existential car insurance, as they want their insurance to pay for their check engine light.
You know that topics can change or broaden during a conversation?
You don’t have to talk down to me or insult anyone else. I’m well aware of how basic conversations work, and the other person is trying to share their ideas.
What I mean is that you’re pigeonholing the conversation. You’re talking about perpetuating the system, as if insurance somehow needs to stay the way it is as a huge capitalist scam rather than reimagining it, especially when government systems are involved. And even then, I don’t see why insurance can’t be reformed or socialized for any of these purposes with the right framework. You’re coming at this by saying this is how it is and therefore this is how it should be.
But my bad, I forgot that in the US, even the wrong sneeze can send you into bankruptcy. It’s like Americans cling to this broken system to avoid being crushed by the weight of their own economy by pushing the problem somewhere else and turning it into monthly payments.
You can change the system all the way you want. But even a co-operative insurance in a communist society will have to spend money on other things beyond damage claims. Thus even they will take more money from the insuree, than they pay out.
Even if your insurance is only a pot where everyone throws their money in, and takes it back out when they need to, someone still had to buy the pot.
It doesn’t matter how you organise it, paying insurance premiums will – on average – always be a loss. That’s neither a good thing nor a bad thing, it’s just a fact. The important part of insurances is the “on average”: The vast majority of people will never cause a million dollar damage, so they can pay a tiny share of the damages caused by the one unlucky person who does.
Instead of being mad that you paid for the car insurance and never needed it, you should be happy that you didn’t end up in a car crash, destroying someones life. Instead of being sad that you paid for your health insurance for 90 years without ever needing it, you should be happy that you aren’t the one who had to spend years in hospitals fighting cancer. And instead of paying an insurance premium for your phone, you should put that money in a piggy bank and take it out if your phone ever gets stolen.
Things like insurance, home and auto need to government run and not for profit
insurance, home and auto
And the biggest one: health
True, sorry, I’m fortunate enough to live in a single payer Healthcare country. Although it desperately needs reform, vision and dental aren’t really covered
can’t look at bad teeth if you don’t have any eyes!
Annnnnd if you can’t eat, you’ll die so you don’t need to see anything anyway!
I thought were were against US health policy?
Haven’t you heard? For-profit healthcare is coming to a fascist near you!
Don’t forget the medication itself!
Single payer insurance of any type pulls from a far larger pool than any company could have, lowering the individual cost and allowing a bigger risk coverage. But… what about all those insurance companies (of all types), as well as other industries that rely on the increased costs? How will they survive? /s
Ahhh I’m sorry! I forgot about the poor shareholders! Forgive me!
I’m beginning to think you don’t love the GDP, citizen
GDP me harder daddy
Home insurance should absolutely NOT be government wrong. That’s just government sponsored building in flood zones at that point
Flood insurance largely is only government run, it’s far too costly for private companies. The flood insurance program started paying for people to not rebuild
I mean they can stop allowing building in flood zones. Home insurance should not be for profit
I work in auto insurance and 100% agree. Shocks my coworkers when don’t think auto insurance shouldn’t be all about profit.
One car insurance company where I live operates kinda like this. USAA.
Every subscriber is a member. Every year, after they pay operating costs, they take the money left over from premiums and put it into accounts distributed across all the members. When you reach a certain age you can withdraw the money accumulated in your account.
There are a lot of them like that called “mutuals” which are just insurance cooperatives. If you’re American you can probably get your insurance through one, although they aren’t as popular.
I haven’t heard of this. What’s this benefit called?
Yeah I didn’t know most of that. I’m not a veteran so I can’t be a. Member even though I bank with them. Or couldn’t last I checked. I probably can now because my MiL is a vet.
…i don’t know man, i’ve been with USAA for fourty years and my dividends always amount to just a discount on my december premium…
It’s amazing what you can do when you aren’t accountable to shareholders
Let’s not forget when you get hit not everything is covered, also some damages like trees falling in your car from storms etc. Is also not always covered unless you have specific and even more expensive insurance. Also you don’t even cover your own car, you cover the other persons car.
In conclusion: insurance is a fucking scam
IDK what’s worse about that, that it’s called force majeure or that it translates to God hates you, so ain’t paying for that.
If Bob hates you and drops a branch on your car with a chain saw, then suuuuure you might get something, after your deductible of cause, but if you’ve pissed off God then…
Then if you are in an accident or something happens to your car, they’ll try not to pay out and even if they do, they’ll make you pay even more every month, regardless of whether the accident was your fault or not. Oh and you have to have it where I live or you’re breaking the law.
Where I live, you can choose to not have it as long as you take $50,000 and put it into a bank account and secure it and not touch that $50,000 as long as you are driving without insurance.
What if you hit a lambo?
It doesn’t really matter either way. If you have 50k cash or a 50k insurance limit. The other party can settle for 50k or they can try to get more through sueing you. If they get a judgement for more than 50k (likely after years) then you have to pay, but if you don’t have a million dollars, they aren’t getting it anyway. From there they can agree to a payment plan or try to garnish wages or place line.
Sounds wild to me. In UK the third party liability insurance limit is usually in the millions.
It’s the difference between minimums and maximums. In most American states you have to have $50,000 worth of liability insurance to legally drive, which covers the majority of financial consequences for accidents.
That being said, now that cheap cars are $35,000 brand new, it might be a smart thing if you’re an American driver to have $100,000 or $125,000 worth of liability insurance to keep yourself from going bankrupt.
The extra $100 a year for that coverage would totally be worth it if you ever have to use it.
Also they will arbitrarily decide how much your car was worth. Did proactive maintenance and no accidents? Cool, now it’s assessed to be the same as if you had six unrepaired fender benders and kept raccoons in the back seat.
The difference is that (in theory at least), insurance will pay your full costs, regardless of how much you’ve already paid in. You can sign an auto insurance on one day, pay in 100$, then get into a 20k$ crash the next, and get the entire costs covered.
A retirement savings fund is capped by how much money you’ve put in it. You can never take out more money than you’ve put in (+interest/portfolio growth).
I mean outside of the fact by law you have to have car insurance.
The insurance you’re required by law to carry is liability imsurance that ensures you don’t ruin someone’s entire life with no ability to compensate them. If you own your car free and clear, its completely on you whether you want to insure your own property.
Depends. You can also deposit so much to the DMV instead for them to hold in place of insurance. In California it’s $75k.
Ah yes, $75,000, a totally reasonable amount for the average joe to just give away.
That’s why people get liability insurance instead,
The average new car is 50k, many cars are a lot more and medical expenses can be crazy. If you accidentally total a 100k sedan and the driver ends up with a broken bone you could be forced essentially into a life of indentured servitude with 50% of your wages garnished for life
Well that’s the thing. It’s about ensuring that there’s a legally predefined amount of money available to pay for damages you cause while driving. It’s not going to be cheap. The dmv holding it as cash is merely the alternative to insurance pooling everyone together, charging them according to risk and the cost of doing business, then paying it out whenever necessary.
The only real alternative would be forcing you to actively maintain that amount in free credit, which would probably be difficult and have a fee associated with the risk of inability to pay, especially as you’re not guaranteed to survive a crash you’re at fault in.
75k is a pittance compared to the damage you could do to another person’s property or life while driving. That’s the whole point of the legally mandated liability insurance–for most people getting in an accident that results in injury to the other party would be financially devastating. And even worse would be having someone hit you and put you through 250k of medical care with no ability to pay.
Thousands of people are injured every day in car accidents in the US and about 100 are killed, so its not some kind of unicorn situation.
If you want to argue about driving being a necessity to live and work, that’s a completely separate discussion from why liability insurance is necessary.
It’s not a completely separate discussion though. If driving is necessary to live and work, and you legally have to have insurance to drive, then I believe that to be a completely reasonable connection. I’m not saying we shouldn’t have a system in place to ensure people’s lives don’t get destroyed without proper compensation, I’m simply saying our current system is broken, and to try to justify it with saying you can spend what amounts to more than what the average person annually makes in the US is ridiculous.
If you can’t afford to give away 75k, then you can’t afford to not have auto insurance, so that’s kinda a mute point.
What a shit take, “oh you can’t afford 75000 dollars, so that means you should instead also spend thousands of dollars every year for the rest of your life, and hey you are legally required to do so!”
I’d have fewer complains if driving weren’t a necessity to survive in this country, public transportation is few and far between if it even exists locally, and good luck getting any decent job without a car, or I guess you get minimum wage at the local gas station barely even being able to pay for rent. Oh, want to move? Guess what you’d need for that!
It’s a rigged system, and I despise seeing someone try to justify any part of it because “oh you could just pay $75000” ??? Fucking ridiculous.
Insurance is to cover the costs of the OTHER person if you cause an accident, so fucking yeah.
If you get in a car, that has the potential to cost someone else tens of thousands of dollars if you fuck up, you better fucking have some way in place to compensate that person, in case you do fuck up.
It’s your choice if you use insurance or capital for that, but it’s unfair to OTHER people on the road if they have to end up sitting up on (tens of) thosuands of dollars because you fucked up, and don’t have any way to compensate them.
And getting rid of insurance is not the solution to bad public transit access, and mandatory auto liability insurance isn’t a bad thing just because shit public transit forces most people into cars.
Like what alternative do you suggest ? No mandatory insurance, and crash victims just have to send up sitting on their own repair and medical costs, and that’s somehow better ?
I feel like ending up sitting on the costs of a crash you didn’t even cause is going to be more harmful to low income people than having to form over liability insurance payments.
My suggestion is a government based insurance system that everyone puts a proportional amount into based on their wages, almost like taxes one might say, that goes towards a publicly available fund for people that have traumatic accidents/injuries.
Just in case it’s not just a spelling error
It’s actually moot point not mute point
You still have to pay for insurance even with the fund though. It’s required by law.
It probably varies based on states but in CA you can put a deposit in with the DMV in lieu of getting insurance. The deposit would be used for any damages you are liable for. I don’t remember the amount but it made insurance seem like a better deal to me personally since the coverages went way beyond the deposit amount.
The requirement is “proof of financial responsibility” not “insurance” specifically. Every state allows you to establish a surety bond rather than insurance. If you’ve got $30k-$50k lying around doing nothing, you can let the state hold on to. So long as you don’t get sued for damages related to your driving, you get it back when you stop driving.
Exactly. Insurance is best thought of as similar to gambling, but functionally the opposite. It’s “I’m giving you $x per month knowing that I’m probably going to lose money on this exchange, but in return if I’m hit with y disaster that it would be very difficult to financially recover from then you pay for it”.
I get that some people are frustrated by it during financial squeezes, and with liability insurance it can be annoying as it’s mandatory. But as someone who’s gotten a renter’s insurance payout, the relief of “thank fuck I’m not out thousands of dollars while having to deal with this disaster” is immense
I think of insurance as a cost limitation device. In case of disaster it limits the potential costs to something manageable in exchange for a manageable monthly payment. As you acquire more expensive things (house, car, etc.) those potential costs expand significantly. With vehicles your car insurance also covers some medical expenses after an accident, as well as covering
I can pay a couple thousand dollars a year to insure my house but I definitely couldn’t have paid the 40k out of pocket to replace my roof, siding, a couple of doors and windows and repaint the garage after a recent hail storm. Every vehicle I’ve lost to nature’s chaos had a loan tied to it which would’ve been very difficult to both continue to pay back and repair/replace the vehicles. Insurance limited those costs
That’s a good model to think of it. Insurance originated as mutual aid and I’m very in support of not for profit insurance as a concept. Like, what you’re actually paying is the price of catastrophe times the odds of it in the given time plus administrative and profit costs. What that all means is that if you can’t afford it, then you really can’t afford to not have it should you need it.
I can’t fault people for being confused or frustrated when we also have insurance that’s intended to work as the primary means of payment.
Having our crap tastic excuse for a medical payment system be based in insurance, and then having another mandatory insurance system that’s somehow less helpful is reasonably frustrating.
That’s fair, and yeah I’m all in for replacing the health insurance system with single payer, but I find it difficult to picture a better system for car based risks without removing cars from the equation. The alternatives involve pushing some of the financial costs of driving onto people who create less of these costs. It’s why bad drivers have to get more expensive insurance and may struggle to get insured by the medium or low cost insurers.
Additionally home insurance is rapidly becoming more frustrating to people in many places thanks to climate change. The actuarial tables don’t lie, and seeing as destructive weather events are making many places more prone to disaster, insurers are going to find themselves taking the emotional blame, especially when many people refuse to believe that the climate has changed.
