The “Social Costs” of Buying New

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Collectivism – the idea that “social costs” should be born by the individual, even when an individual hasn’t actually imposed any costs on “society” – is a big part of the reason why I’ll probably never own a new car. Because owning a new car means paying through the nose for  insurance – the premiums based to a great extent not on what I have done or might reasonably be expected do (based on my track record, etc.) but rather, on what random strangers out there in society have done – or may do.

Consider: All states force everyone to buy insurance – on the theory that everyone should be financially responsible in the event of an accident. One problem with this nice-sounding theory is that out there in reality, irresponsible people routinely drive without insurance, irrespective of what the law requires. They may be theoretically liable to civil or even criminal consequences if they’re caught or cause someone injury. But unlike the responsible law-obeyers, the irresponsible law-ignorers typically have very little for the state to take. If Pedro the illegal alien totals your car, it’s you who will be left holding the bag. No, amend that. It is everybody who plays by the proverbial rules that gets left holding the bag  – because the costs imposed by Pedro are distributed across “society” – in the form of higher premiums for everyone.

Everyone, that is, who isn’t irresponsible.

The “health care” system operates on the same principle. It socializes costs – which of course is a way of rewarding those who incur the costs – at the expense of those who are forced to pay them. This, in turn, causes the costs to rise, inexorably upward. Car insurance works just the same.

You may have never been the cause of an accident. You have a spotless driving record going back decades. One fine day you decide to treat yourself to a new car. Then you find out what it is going to cost to insure the car – and have to be revived with smelling salts. In a major metro area such as Phoenix or Philly, it can easily cost $1,000 annually to insure a car that sold for $25,000. This is a monstrous – disproportionate – expense. It is approximately five percent of the car’s purchase price. Paid not just once, but every year, for several years to come. For perspective, consider home insurance. If you had a home worth $250,000 a policy that cost about 5 percent of that would be on the order of  $12,500 per year! (The average cost for a homeowner’s policy is more like $800 a year – not even close to 1 percent of the value of the home.)

If the home insurance shysters tried to foist a 5 percent per annum bill on homeowners, there would be a pitchfork and torches uprising. But when the car insurance shysters do exactly the same thing – no, a worse thing – because unlike a house, a car is a depreciating appliance, not an investment – we just shrug and write the check.

Let’s break it down some more. $1,000 annually for insho’ance works out to $5,000 over five years – the period of the typical new car loan.  That amounts to 20 percent of the car’s purchase price – usurious by any reasonable standard. Remember also that the five grand is gone forever. At least you still have the car. But the thing to keep in mind is that you really paid $30,000 for your $25,000 car.

And this is one of the big reasons why I will not buy a new car.

It’s bad enough that the state takes 3o percent off the top of every dollar I bring in. Bad enough that I have to subsidize air bags I don’t want and back-up cameras I don’t need – the costs of which are all folded into the MSRP of every new car. But I’ll be damned if I will pay another 20 percent (or more) on top of all that for insurance. Insurance that’s high not because of me, but because of people like Pedro the uninsured illegal – and Dale the inbred PWT who, while stoned on crystal meth, pile-drives into some poor bastard who had the green light.

Et cetera.

Pedro ought to be deported. And Dale, thrown in jail. Instead, nothing meaningful in the way of consequences is laid down upon either of them. Because of course they – and their kind – can’t be bled. They are unfunded liabilities. The funding to be provided by the rest of us.

The only way to dodge this trap is to never buy a new car – at least, never buy one you can’t afford to pay for in full at the time you buy it. Because otherwise, you will be legally compelled to purchase a full-usury “comprehensive” insurance policy – one that will add at least another 10 percent (if you’re lucky) to the cost of the car itself.

If you buy something older – something you can stroke a check for – then you at least have the option of buying a bare-bones, liability-only policy. If you are a safe driver, this is by no means a risky move. If you have managed to go the past ten years without a wreck, it’s not unreasonable to expect that you’ll go another ten without a wreck. The state forces you to buy coverage – but you still have the option of skipping coverage that may be and often is overkill – and overkill expensive, too. It’s a way to defer some of “society’s” costs, too – and leave Pedro and Dale to pay their own way, at least a little bit.

Meanwhile, of course, there’s no escaping all the other taxes. “Society” has needs, you see.

Throw it in the Woods?

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  1. Na’vi of Hometree Wisconsin

    Most Americans believe in the fantasy of Pandora. That one group of strongmen or the other must rule the planet, and all beings must be forced to play a part in an elaborate farce at the point of a gun. The key is finding the best and most benevolent strongmen. Always it is a totalitarian struggle against the totality of it all.

    For me, this fantasy has become so grotesque, and so much worse than even savage anarchy, that I refuse to play a part for another day.

    Somewhere in the urban bourghetto or upon an isolated undeveloped backwater, there will always be an Agora. That is the only live action role playing I will ever participate in and help to build.

    Wherever there is a voluntary public market, with free anonymous exchange, it is there I will seek prosperity, happiness, and fulfillment of my potential.

    There under an avatar and form of my own choosing, I need merely create and offer my own creation for sale to the highest bidder. I need only make an offer to serve and sell my services to the highest bidder. Any other L.A.R.P.ers in the Agora are free to do the same.

    Over time, in this world, one builds a level of trust and reputation about one’s creations and services. One becomes known as a forthright and reliable provider and trader of valued goods and services.

    Such an Agora culture must always mitigate and defend against the uncoordinated competitive theft that may arise from within or without by roving bandits who are prone to intrude and predate upon any public market.

    These takers by force and fraud, if left unchecked, will soon destroy the incentive to invest and produce anything at all, leaving little for either the Agora population or even the bandits grown fat among the Agora realm.

    Whenever an Agora thusly becomess unable to sufficiently ward off value destruction and involuntary public theft, I will reject the common delusion that both bandits and traders can be made better off if the strongest and most popular bandit sets himself up as a dictator and monarch.

    I will reject the evil lunacy of a resident stationary Bandit in Chief. Of a benevolent adminstrator of banditry and spoils distribution bureaucracy.

    I and hopefully all other participants, will leave this Agora and return to the Pandoras of the common wolves and sheeple, and wait and abide until such time and opportunity should arise, that I may once again join or build a new Agora elsewhere, and enjoy my kind of life anew.

  2. Eric,

    Take it easy on Pedro and Dale….. its society’s fault. Gosh! You’re so ethnocentric and xenophobic! Unlike Pedro you benefit from White Privilege and Dale is a product of his environment. Any way you present it the leftist will have a Teflon Don response with an added spin. The end result places “them” as the victims of society (“hey what do you mean ‘them’!?” screams the leftist).

    • What I’m afraid of is not Pedro per se but rather the costs Pedro is imposing on me via his “Uncle.”

      Even in my rural county, way out in the Boonies, our real estate taxes (already obnoxious) have gone up to accommodate the “needs” of “immigrant” children. This annoys me. Am I wrong to be annoyed? It annoys me that I am compelled to maintain insurance on my eight vehicles, but Pedro the illegal can drive without even a driver’s license with virtual impunity – because “Uncle” won’t deport him, jail him or force him to pay as he forces me to pay.

      Am I wrong to be annoyed about that?

      Let me ask you a rhetorical question: Do you let anyone who wants to just walk into your home, grab food out of your ‘fridge, sit on your sofa and watch TV? Do you let strangers help themselves to your bank account whenever they “need a little help” or because their kids are hungry?

      As long as there is a welfare state, open borders is a disastrous idea.

      • You aren’t wrong to be annoyed, but the problem is not Pedro. He’s an individual who offers his services, at the market price, to other individuals who buy them; and he takes advantages of everything the welfare state offers, that’s for sure. In a way, his existence could actually be the factor that will render the welfare state unsustainable. But there’s no difference between him, Pedro, and a worker in Asia who’s building a car, or making close and shoes, for you, at a lower cost.
        I have a big problem with the welfare state, but I have a bigger problem with the ideas of state, borders and deportation, which are not libertarian.

        • Absolutely – but until the welfare state is dismantled, the fact remains that there are massive incentives for people looking to cash in to come in. So it’s reasonable to oppose them coming in – until they aren’t in a position to demand “social services” and add to an already crushing burden on the productive elements in this society.It’s bad enough that we already have tens of millions of tax-eaters in this country. Do we really need more?

      • It all makes sense if you are in the ruling class IMO. If I were to step into the shoes of someone who say, had control of the council on foreign relations I would see it this way:

        Pedro has a political purpose to cause people to fight amongst themselves. Your purpose is to be productive livestock.

        Power & Money. Pedro helps maintain the power structure by keeping people from looking the ruling class. Taxing the crap out of people like you and forcing the purchase of cartel/monopoly products keeps the money flowing into their pockets.

        It is then the job of the CFR and so forth to come up with good sounding reasons to bring about these conditions without ever letting on the real purposes. Oh and make sure the livestock and the Pedros pay the costs of having all the Pedros in the country.

        All this stupid disastrous stuff makes perfect sense when viewed from the POV of a monied robber baron descendent or political office holder.

  3. Off topic, but I was on my local news again this morning. We were debating our new non-ban on fireworks. Little hicksville station so no links but it was live. Kinda fun like usual. We finally got real fireworks made legal again and already they are ticked. I of course stated that we are adults and should be allowed to do as we please. The counter arguments were, fire hazzard and noise disturbance. “poor me it’s keeping me awake at night.” “what if you burn down my house?”

    I hit them with, we already have laws against disturbing the peace and we have laws against burning down your house. Then I ask if any of them had neighbors who used illegal fireworks and if they kept them up at night or ever burt down their house? So how will it help handing out fines? (sound of crickets chirping)

    Just good old fun!

    • I love fireworks and used to (along with three amigos of mine) go up to PA (where you could legally buy the hard-core stuff, like mortars) and then we’d have a big Fest in the neighborhood on the 4th.

      But I do not celebrate the 4th of July anymore. The idea is absurd and even revolting. “Our freedoms.” Please!

    • Having been exposed to idiots using fireworks I understand the noise and damage hazards. But here’s the rub…. they are illegal in Illinois. So much for the law working on people who are going to be rude anyway once again.

      • Yah they have been illegal here for as long as I can remember. We had to go down to Ohio to get them. The thing was it didn’t stop anyone, so what is the point of another law on the books that at best will be arbitrarily enforced?

  4. Hey Eric – have you ever looked into the option of getting a “International Driver’s License” – I would be curious how that would impact we Americans in terms of tickets and insurance – just a thought I have never had time to follow up on…

    • Had an ex-cop tell me that if you show an international license then you’d better be in a rental car. Otherwise, he’s going to start asking questions about why you are driving a locally registered car and don’t have a local license. He’ll want to see green card or visitors visa, something.

    • The problem with that is the car – as another posted mentioned. If it’s registered to you – and you are a US citizen – “the law” probably requires that you have a state-issued permit.

    • When I received an Int’l License from AAA it states (IIRC) that the license is good for one year and only good for legally driving outside of your native country.

  5. My ‘bare-bones’ policy costs me $30/month for a decade-old car that was given to me free. So I’m actually paying MORE for insurance than I did for the car. Isn’t that somehow WORSE than paying 5% to insure a new car?

    Sure I MIGHT cause damage to someone else’s property, but my driving history says its unlikely. As a bike-rider, you learn to drive extra defensively, anyway. So, even though I have no violations, and a car worth zero, which I hardly EVER drive because I have little need to, and other options besides, I end up paying almost $400/yr for the privilege of driving ‘responsibly’.

    Doubly ironic since, due to my limited use of the car, I spend less than $100/yr on gas.

    I am a die-hard libertarian. But I once read a book written by a Trooper that made some sense, and which called for insurance to be included in the price of gas, like road taxes. When you buy gas, you buy insurance. That way every driver on the road has liability, and those who want extra can buy extra. I know, its not very libertarian. But neither is locking people up for setting off an indicator of irresponsibility, rather than actually causing damage, which can happen if you’re caught without insurance.

    • It’s not a great idea, but is certainly more equitable in my opinion that overt perversions of the constitution perpetuated by the current system. At least the state acts in a more passive role versus requiring you to inspect your car, purchase insurance from a private company and forcing you to go through all the crap, taking up productive time and energy.

  6. A small piece of insurance company nastyness I ran across about 15 years ago has to do with so called “uninsured motorist” coverage. I’ve only been in two serious accidents, neither my fault, but one involved a guy who wasn’t insured. Not only wasn’t insured, it wasn’t his car, he didn’t have a license and he was drunk. Needless to say he was also destitute.

    My car was totaled in the accident but I had “uninsured motorist” coverage on my policy, supposedly $300,000 worth. That’s how I found out those policies only cover medical expenses (as if I didn’t already carry medical insurance). Absolutely worthless for property damage. And to make matters even worse, the state I was living in required all insurance policies written to provide this useless coverage, which I had to pay for. Bah!

  7. They nail you even with a used car. I brought a ’92 Buick PA with 92K miles for $2000 cash. Insured with Progressive for the state of Alabama minimum runs $280 a year. Do the math. In 8 years I will pay $2000, the full purchase price of the car which by then will probably be worth $500. But the insurance will continue on.

  8. It shouldn’t cost a dime to keep someone in prison. Once again that’s another reason Pedro has a job here, because we are paying our laborers to sit on their butts. Prisoners could be working the ranches and picking crops.

    There would be cases where some minimum wage worker is willing to make restitution but it would be too slow. In a case like that part of his restitution would be too also pay into a restitution fund whereby victims could get immediate restitution. So, if you were a victim you would get reimburssed from the fund immediately by past perpetrators of misdeeds.

    • “So, if you were a victim you would get reimburssed from the fund immediately by past perpetrators of misdeeds.”

      Sounds a little like Social Security…

      • The difference is there would be no force or aggression by government or mandatory participation.

        In a libertarian society the concerns of Scott would be easy enough to address. If a prisoner feels he is being mistreated he could appeal to a mutually agreed upon arbitrator.

    • Clik, you have to also think about what would happen if the State was allowed to work prisoners. It’s bad enough we have private prisons now that make money off prisoners just for housing them. How many more people would be busted for victimless crimes like selling milk without FDA approval if those outfits could put them to work assembling electronics?

      • So Gil, are you going to work tireless to repeal imprisonment for not paying taxes? Or how about repealing income taxes?

        The state has no trouble “enslaving” people and you appear to favor that condition. Yet somehow you find it objectionable to use similar methods for payment of a legitimate debt?

  9. It costs money to keep inmates in a prison. Lots of money. That is why they are reluctant to do more than slap someone on the wrist for these violations. (I think 30 days might be the max penalty for some of them with no visible income.)
    My own suggestion would be to create a special military unit like France did once upon a time, called the Foreign Legion. Instead of costing us approximately 40,000 dollars a year to keep them, we make them earn their keep. Most would beg off for health reasons. I would have none of it. I would put them there anyway.
    Pedro is safe. He has President Obama on his side. He has an entire southern group of ranchers on his side that want cheap labor for their ranches. As long as he has the backing of powerful groups he is safe.
    Pedro is only one of millions of illegal under cover tax breakers. It is called the cash economy with no rules. Has anyone ever collected taxes from a prostitute? Yet an untold number of people do not pay taxes at all. A lot even qualify for welfare.
    If there were such a thing as real justice, the entire IRS laws would have to be illegal from a discrimination view alone. It is great to tax the middle class. Everyone else gets a free pass.
    Well, the middle class is disappearing. Now who do they get to foot the bill? Might be interesting to find out.
    Insurance, banks, lawyers, and a lot of other parasites will be out. The first rule of a good parasite is to protect the host. If the host dies, then a parasite must find someone else. I suggest that like all parasites, the insurance industry will abandon us when they have to pay any real money out for us.
    This happened when we had a few really bad hurricane seasons in Florida. Most of the Insurance companies wanted to leave. Companies that used to brag that they were in all the states were suddenly quiet. We are really dealing with a bunch of parasites in partnership with our politicians.

    • Dave,


      In re parasites abandoning their hosts: Last year, a deer lept from the side of the road into my truck’s right front fender. Rather than file a claim, I just cut a check to the local body shop to get the fender replaced/sprayed, etc. Reason? I am convinced that had I filed a claim, the filthy insurance company would have subsequently “adjusted” my rates – even though this was a legitimate accident – i.e., something I could not have avoided and which did not involve driver error. That’s how these fiends operate: You pay. They don’t. And when you try to make them pay, then you are certain to wind up with the bill eventually. It’s a scam. A legally enforced shakedown.

  10. Eric,

    As I’ve mentioned on a different article, New Hampshire does not have a mandatory auto insurance requirement. Technically you have to show the financial ability to pay if you forego insurance, but in actual practice it is not enforced. It does not prevent you from registering your vehicle and legally driving in the state. It is true that buying a car that necessitates a loan would come with an insurance cost, but that is a requirement of the lending body.

    • That’s a magnificent thing!

      PS: I have no issue with a lender requiring the borrower to maintain insurance on property not yet paid for. The lender has every right to set down conditions of loaning money – including that the borrower “make whole” the lender in the event the borrower damages the not-yet-his property. The borrower is free to not accept these contractual obligations. Seems in keeping with Libertarian principles to me.

      Now, once a car is paid for and the property in toto of its owner, it’s the owner’s personal business whether to buy insurance coverage. To insist that he buy coverage for “in case” he causes damage to some abstract “someone else” is to punish him a priori – to treat him as presumptively guilty of having caused harm. It is really no different than denying Tom his right to own a gun because Ed went on a shooting rampage.

      • However so many people always have a car note that they don’t see the insurance law as an additional burden. As far as they are concerned it’s a law for what they are doing anyway so they don’t care.

        • That’s true!

          I’ve noticed that most people are comfortably habituated to debt. I find this fascinating. Our neighbors, for example. Nice people; older couple – and poor. They live in a ramshackle house that needs a lot of work. He works as a day laborer – and he’s in his early ’70s. She is a cafeteria “lunch lady.” I doubt they bring in $35,000 annually – together. Guess what they have in the carport? A new Subaru Forester and a new Chevy Silverado 2500 with 6.2 V-8.

          They are in debt up to their eyeballs – they have told us so!

          But they freely chose to sign up for this debt. It is something I would never do.

          Even though I could easily “afford” to take out a loan on a new Silverado 2500 myself, there is no way I’d ever do it. I buy older stuff for much less – in cash.

          It’s a whole different mindset. Like worship of the National Felons League, I just don’t get it…

  11. Libertarian principles: If you do wrong, make right.

    Too many deadbeats go through life with the attitude that you can’t get blood out of a turnip and get away with it.

    Maybe we need Debtors Prisons where these turnips can work off the damage they cause and make things right. Facing that prospect more deadbeats would voluntarily purchase insurance protection and our insurance rates would be lower because we wouldn’t be subsidizing their irresponsible behavior.

    • “Maybe we need Debtors Prisons where these turnips can work off the damage they cause and make things right.”

      I agree with this in principle. That is, in the notion of restitution; of making whole those who’ve been injured by your actions. So, if a person hits your car and doesn’t have the means to pay for the damages, then he should have his wages garnished. If he has no wages to garnish, then he should be put to work somehow and the proceeds used to pay back the debt. Etc.

  12. Doug – I wouldn’t have nearly the problem with mandatory insurance if insurance companies were not permitted to rat out customers and they were also prhibited from political lobbying. Insurance companies are the reason that we have mandatory seat belt laws, helmet laws and why many states still have low speed limits in the US. They are also the reason cars are overloaded with safety equipment that you cannot remove. Every year it gets worse. Today’s cars weight 600 lb more than they did in the 1980’s before airbags, side impact and roof crush proteciton. Debatably, the fatality and injury rates are somewhat lower, but cars are ridiculously expensive to insure. Repairing today’s cars is no joke.

    The problem I have with insurance companies ratting out their customers is that it borders on unconstitutional. In 2000, I was ratted out by Progressive insurance because I cancelled their policy after getting a second bill for $350.00 a month for insurance on 2 cars. I had called to find out why I got a second bill from them and they rudely told me that I had gotten a couple of tickets, which I had disclosed to them when I was getting my insurance quote. I got mad, got a better quote from Allstate and cancelled progressive. They still ratted me out and I had to go to the NCDMV and prove that my car was insured since they had threatened to cancel my car registration. Of course, I had the insurance and they were wrong. I thanked them for the inconvenience. I will never do business with Progressive again, but more importantly, the whole thing stinks. I am inclined to say let’s junk auto insurance altogether. Insurance companies need to be chopped down to size and stripped of their state mandated profit protections.

    • Lobbying is intrinsically criminal. Why have the American People not insisted that it be treated accordingly?

      • Writing a letter to your congressman is lobbying. We couldn’t stop lobbying if we wanted to.

        Congress shouldn’t have anything for lobbyists to lobby for. The Commerce Clause in the Constitution has been stretched way too far. Congress should not be able to use it to “regulate commerce” in favor of their campaign contributors.

        • Writing your congressman is called redressing greivences. That is far different than manipulating some slime mold crack headed political whore in Washington DC to sell his country out to the lowest bidder.

  13. Sorry but I just can’t agree with you regarding forced Auto Insurance.
    Until this year, Jalisco Mexico required no Auto Insurance. There were a lot of Hit-and-Runs and People unable to pay the Accident Costs. Since January, Auto Insurance is manditory. This doesn’t mean there aren’t a whole lot of people now driving with Insurance but it does mean a Fine is incurred if a driver cannot provide the proper Paperwork if he is stopped. If the (possible) Fine is not paid and Proof of Insurance is not provided to authorities, the car cannot be registered the following Registration Period. If the owner of the car does not register it, it will be impounded if the driver of that car is stopped.
    Before, if a Driver was responsible for an accident and someone was injured, he went to jail until things were worked out regarding payments and laws violated (driving intoxicated for example). If no one was injured, he was responsible for the Deductable portion of the other driver’s Insurance Policy and the other driver’s Insurance paid the rest. The Insurance Company could go after the At-Fault Driver and the other driver could go after him to get back the Deductable he had to pay but the guy usually had no money anyway so it was kind-of pointless. If both drivers in an accident were insured, the At-Fault Driver’s Insurance covered the deductable of the other’s Insurance. Theoretically, this is the way it is now so the Insurance Companies take care of the Accident Costs. Before, if one had an accident, his Insurance costs did not go up (My Wife’s Sabrina has had 9). With Manditory Insurance, this could change.
    In Germany, one cannot get License Plates unless he has Insurance. If he cancels his Insurance after he secures his plates, the Insurance Company contacts the DMV and the Police will go to the person’s home and demand the Tax Sticker on the Plates. Driving without a Tax Sticker is a major offence – MUCH more so than Speeding which is not even considered a crime. Since Insurance Policies are contracted for a year, the Insurance Company will probably sue the Driver for breach of contract.
    Every car in Germany has Insurance and any damage to a car is considered an accident – including Door and Parking Dings. Also, by law, there are set time periods a Driver must drive Accident-Free (not in an Accident which was his fault) in order for his Insurance % Rate to be reduced. For example: If an Insurance Company sets its Liability and Theft Cost for a Golf 1,4 TSI at 400€/year, there is only one driver of the car, he has been driving Accident Free for 15 years and drives 15.000Km/year, his Insurance % Rate may be set at 60%. His cost for a year’s Insurance would not be 400€ but instead 240€/year. If he is a new driver or a lousy driver, his Rate could be 140%.
    In Mexico, the Car Taxes were eliminated in 2012 – unless the car is valued over (I think 500.000 Pesos). One pays only for License Plates each year and is given a discount if he pays before the end of March. On our 2008 Smart with two Drivers and Full Coverage, the Insurance is about 4000 Pesos/year. This year the plates cost 300 Pesos. The other car is a highly modified ’83 Golf. Insurance on this is 3300 Pesos/year. One can cancel his Insurance but keep his plates. I do this when I leave Mexico.
    In Germany, Car Taxes are based upon the the displacement of the motor. One can License (which also means Insure) his car for between 2 and 12 months. One of my cars is Licensed for 6 months each year so I pay 50% of the Taxes and Insurance. I’m the only Driver so, at a 40% Rate for a 2001 Audi S3, I pay 178€/year (no Collision). The other car (an Audi A2 FSI – which is driven only by me 5 months each year), costs 98€/year . This July, Germany is introducing Wechsel Kennzeichnen which allows one to use one set of Plates on two vehicles. He needs to pay the Taxes and Insurance Cost for the more expensive car.
    The big difference Mexico/Germany have with the USSA is they do not allow Insurance Companies to access/ask/steal/whatever a Driver’s Records. They have strict Privacy Laws which include NOT allowing Insurance Companies to know what a driver has done – this is an issue he has with the Government (including if his License has been revoked). Except for Status Changes, the Insurance Companies ONLY allowed concern regarding their customer (Driver) is: Has he been At-Fault in an accident and how much has that accident cost the Company. Insurance Companies are only allowed to share information amongst themselves.

    • Doug,

      The flaw in your argument is that you assume the “problem people” will obey the mandatory insurance law. But do scumbag thugs stop stealing because it is against the law? Do laws forbidding criminals to possess gun prevent them possessing guns?

      In my state, insurance has been mandatory for decades. Yet, somehow, we still have a huge problem with uninsured (and unlicensed) drivers. Especially illegal aliens.

      All “the law” has done is increase costs and take away freedom from the people who are not the problem. The law has created a government cartel – that means, you can’t say no. Which means, they have you by the balls. They can charge you outrageous, unjust fees – and there is nothing you can do about it. You can’t say, “no thanks.” You can’t even cross-shop. Not really. Because – again – they all know you can’t say no. So they can – and do – collude to fix rates at a certain (high) level. Take it – or be a “scofflaw.”

      A good driver, accident-free – might say to himself: The hell with this. I’ll just put money aside in case there’s a fender bender and then pay for it out of pocket. Such an event is probably not going to happen (see previous definition: good driver, accident-free) so the odds are good he’ll never have to spend that money. So it will still be there for other things.

      But more important, if we could say no – then you can bet your bippie rates would not be extortionate – as they are now.

      I’d probably buy a liability-only basic policy, if I had the free choice, provided it was reasonable and based on my record of causing loss (zero) rather than insurance industry bullshit such as “speeding” tickets.

      Think about it.

    • I see Eric has addressed it, but I response is as well: How do people with no money purchase insurance? They don’t. The problem deadbeats are still problem deadbeats. A few might react out of fear and stop driving or get insurance but that’s pretty tiny. If the Mexicans in Mexico are anything like those that move to the USA I would say it’s practically zero. Culturally there does not seem to be much fear of penalties for not obeying such edicts.

      As far as Germany there is much not to like, however, given how the culture is, I doubt that these laws make any significant difference either. There would be relatively few who wouldn’t take responsibility before and few after.

  14. I drive a 97 Suburban. It has over 400 000 km (over 250 000 miles) on one engine and one transmission. One thing I did learn the hard way is that it is good to buy liability + fire and theft. I had another old car stolen and of course, when the police found the car, they phoned once (when I wasn’t home) and then never phoned again. So, I was liable for the impound fees when I finally found out where the car was. If you have fire and theft, you are not responsible for cops not phoning, your vehicle burning up and incinerating a BMW that was parked next to you, etc. I always buy liability and fire and theft. Another thing I found out, was ASK how much money the biggest liability claim ever paid out in your area is. One insurance rep inadvertently mentioned to me that here in Canada, even in the case of death, there has never been more than $2 000 000 paid out. (The law’s a bit different in Canada. You get “free” medical coverage, worker’s compensation, etc, but not as much compensation in liability suits.) Nevertheless, people who don’t know better go around buy, 5, 6 and even 10 million dollars liability because they are scared they will get sued for that much. In a worst case scenario, if you ever did miraculously get sued for that much, you declare bankruptcy and start over. It’s not like you will have to pay for the rest of your life.

    • I buy (am forced to buy) the absolute minimum coverage. Reason? I am a damned good driver (no intent here to toot my own horn – just stating a relevant fact) who hasn’t caused an accident since 1987. I judge – reasonably, I think – my chances of causing an accident to be very low. I’d go without insurance at all if I could – because I’d rather put the money aside for “just in case” – and then have it when just in case doesn’t happen – rather than be forced to “contribute” to insurance that is of no value to me.

      If I had all the money I had been forced to pay to the insurance companies over just the past ten years, I’d have $10,000 more in my bank account. That would be enough to dig the pond I want to dig in the field out back – or build the extra garage on the back of my “guest house” I have been wanting to build for the past several years.

      Instead, I had to buy insurance – legalized extortion.

  15. Insurance is not mandatory. I’ve been driving without it since 1973. It’s a scam and a designed program to keep the masses “fearfully” feeding the monster. If you want to be a slave, then play, no, make that, “work” by their rules. Otherwise, quit gripping and enjoy life!

    Bottom line is, I don’t need anyone to require me to be responsible. I already am and that’s the way I live my life. If I do something wrong, I make it right. And, I expect the same from others. If everyone lived by the “Golden Rule” we wouldn’t be in the “Insurance ClusterF..” that we find ourselves in. Just because the whole system is founded on corruption doesn’t mean I have to participate.

    • It certainly is mandatory in Virginia! Mandatory in the same sense that paying taxes is mandatory, anyhow. If you don’t pay and they find out, they’ll go after you with startling ferocity. Enormous fines, for openers. They will also take away your driving “privileges.” If they catch you driving sans those privileges, they’ll arrest you – and possibly jail you. Fail to play ball at this stage – and drive (and get caught driving) again, and they’ll up the ante even more.

  16. AND ANOTHER THING…they have their “good hands” squeezing my neuticles and as far as “good neighbors”…it’s like living next to Charlie Manson.

  17. Insurance is nothing but a gamble your are forced to make by GovCo and the rule is Heads they win, Tails you lose.

    I could get cramps in my hands typing all the BS I’ve had from “The Good Hands People” to the “Good Neighbors”. To call them parasites is to insult tapeworms.

    Had the insurance industry existed in Dante’s day I’m sure he would have included a special ring, just for them…not that I have a special hatred for these folks or anything.

  18. Deporting Pedro though, if I may say so, is not a very libertarian idea. Pedro comes here (although the Mexican economy is growing healthily now, and immigration has slowed a lot)because there’s a demand for his services, and the state incentivizes the flow of immigrants by providing them benefits. But we’re not against the free flow of people and services, are we?

    • If there were no “services” immigration become a much less significant problem.

      However the problem of imbalance with the labor supply remains. New labor flows in until wages are equalized with the places from which it is flowing. This condition is fine if free market principles are in place everywhere. But they aren’t so this becomes an issue.

      I am not sure what the solution is, but immigration controls are done to serve certain interests over certain other interests so that’s not going to be the solution. Limitless and zero immigration can be used the same way… so what to do?

      All seem to have problems.

      • All of our American labor class gets paid to sit home on their butts and watch Maury’s Who da Daddy? And they may not bother with insurance either.

        If Pedro doesn’t do the work it ain’t get’n done.

      • Well, picking fruit, lettuce, doing construction and domestic work are services, aren’t they? There’s a demand for those services and people willing to provide them. Let them do it. Let private companies set up offices on the other side of the border, (companies that work in connection with employers in the U.S. and payed by them), to recruit, screen workers and regularize their position.

    • A secondary consequence of preventing undocumented workers (illegal aliens) from getting driver’s licenses is that these drivers are now driving without any supervision . . . and without insurance, more likely to hit & run. I would suggest that allowing these illegals to get driver’s licenses, perhaps with an SR-22 insurance requirement for failure to prove residency, might be a better option.

    • Immigration, legal or otherwise, is only a problem because of the socialist society that we live in. People are fine with Pedro picking lettuce. They get upset when their property taxes double to pay for bilingual education for Pedro’s kids. When it comes right down to it, what people are upset about is socialism. This is also true of other groups of people who are demonized in our society, such as people who smoke cigarettes or people who ride motorcycles without a helmet.

      The other side of the coin is emigration. Just look at how upset people were when that Facebook founder left the United States.

      • Yes, exactly! You can’t have open borders and a welfare state – not for long, anyhow. The situation you describe is happening all over the country, even in my rural corner of SW Virginia. It is galling enough to be threatened with confiscation of one’s home if one refuses to “help” one’s neighbor’s kids receive their government school indoctrination and socialization. But at least they are your neighbors. It’s infuriating to be taxed to “help” the children of Pedro – who don’t even speak the language – be indoctrinated in their language – at your expense!

      • I agree with that.
        I have a problem with the concept of public school. But I wouldn’t have a problem with a private school teaching children in their own language, if their parents paid for it.
        I was just saying that the free trade of goods and services, even across borders, is a sacrosanct libertarian principle.
        The problem, as usual, is when the state mediates it.

  19. The insurance should be on the Driver’s License not the vehicle.

    I own many vehicles but can only drive one at a time.

    And then there needs to be something to stop all the fake injury crap that drives costs up.

    I had an old guys fat ugly wife who wasn’t in the car sue my company and collect because she claimed the old man couldn’t get it up after the accident and it deprived her old ugly self of sex.

    Total impact damage of the Maverick was a slim piece of chrome trim at the back edge of the trunk. The damage to the van that impacted the Maverick consisted of a bent tag.

    • I agree it should be on the license, not the vehicles. It will never happen because they wouldn’t receive as much money. Why would the insurance companies want to mess up the beautiful scam they and the government have going! gnomesayin’?

      As far the fake injury crap, that’s in the works. All cars will have a “black box” come 2015. -careful what you wish for

      Then for the fat ugly wife… I’d push her fat ass off a cliff and say “you’re fucked now!”

    • “The insurance should be on the Driver’s License not the vehicle.”

      Now there’s a true breakthrough in advanced thinking 🙂 Who would argue a car was culpable in an accident? “It brought out the Devil in me! I just couldn’t help myself!” 🙂

      I agree completely; The driver is the thing insured, not the car. Sure, I can get a little more wild in a Ferrari than a Fiesta, but who’s getting wild? Me or the car?

      In general I’ve found cars boring conversationalists and completely lacking in self determination.

      • It’s a fair, sensible idea – which is why it’ll never be the basis for mandatory insurance!

        It infuriates me that I am forced to pay insurance, not only on multiple vehicles, but on vehicles (bikes) that sit for months at a time during the off season.

        Insurance companies are scum.

        • Eric – you are being too nice. There are few words that I can find to describe the contempt I have for insurance companeis and the politicians who write laws to favor them.

          • Yeah, I know! They’re leeches and thugs – and worse. If they couldn’t force anyone to buy their “services,” I’d have no issue. Those who felt the need could buy. And those of us who didn’t could say “no, thanks.”

            But of course, we’d have to live in a free country for that to happen.

  20. I’ve run only liability insurance for over a decade. I have five vehicles which cost me a total of $980.00 per year. I buy my insurance on line from the cheapest bidder. Every year a month before the expiration date of my policy, I get new bids. I just started the same system for my house. Increased my coverage and lowered my premium significantly. This morning I’m working on the cheapest telephone service plans.

    • I hear you. I do the same thing. Cheapest phone service plan you’ll find is Skype. Get the easy the “FREETALK Phone Adapter” for $59 and then give them $3 a month for service.

      • No sail fawn fo ‘ me! We have a ’70s-style corded phone. It cost $12 at Target and always works (even when the power is down) and doesn’t irradiate my peanut brain, either!

  21. The thing that really grinds me, at leaast here in Michigan, is the ridiculous liability cost of insuring multiple vehicles.

    I have a 2002 Dakota 2WD for doing the things a truck is handy for – I use it rarely. My other car is a 2008 Civic that I drive everyday. My wife drives a 2007 Accord. We have no kids (but pay our “fair share” of annual public school funding to the tune of $4,900 out of our total $7,200 property tax bill).

    Why is the liability portion of our insurance any higher for 3 cars than for 2. It should be the highest 2 of 3 – maximum. Reason: Only 2 cars will ever be on the road at one time. Highest maximum risk would be the 2 “highest risk” cars on the road.

    However, I’m forced to pay as if all 3 cars are on the road at one time.

    I only pay personal liability / property damage on the Dakota (plus the “uninsured motorist fee”). If somebody drunk out of their mind, talking and texting while eating and masturbating crashes into me – in front of 100 witnesses – I’m SOL.

    Why on earth is my liability any higher for 3 cars than for 2? If the 3rd car is on the road, that means it has been stolen and is uncovered. Car thieves are excluded on my policy.

    I have a good mind to build a contraption so I CAN drive both cars at a time – since I’m paying for them anyway. Seems 3 and 4 lane roads are just excuses for idiots to drive right next to the guy in the adjacent right lane, for miles on end, anyway.

    A minimum speed differential per lane would be nice, but I digress…

    • I have the same multiple cars dilemma. It made me wonder why the machines are insured and not the operator. A little part of me wonders why this isn’t true for everyone,then I remind myself that the laws are written by the finance and insurance companies’ lawyers. A compulsory fraud in intent and effect. I propose a claiming rule; if you are convicted of causing a serious accident, the other party gets your ride, from scooter to semi, additional damages subject to civil proceedings. That ought to promote an outbreak of courteous and attentive driving.

      Insurance would still be sold, but at rates that weren’t inflated by legally mandated artificial demand, and based on the drivers’ records, instead of the legal fiction that certain vehicles are more valuable/dangerous than others

      • Regarding your “claiming rule” – it will never happen as it makes way to much sense. It is almost “biblical” in concept (i.e – “an eye for an eye”). I wonder why no one has ever thought of this before?
        But then again isn’t there something called the 10 commandments that came out a few years ago….oh sorry, I forgot there is that “seperation of church and state” thing as well, where the state abhors/ignores all common sense.
        Had a professor back in college that had a saying “THE MASSES ARE ASSES” – which about sums it up!

  22. As you know, Eric, here in Virginia it’s not just the insurance: the car tax on a new vehicle is outrageous. Actually, it would be quite accurate to leave “on a new vehicle” out of that sentence, but you know what I’m getting at. My 2002 Avalon fills Spotsylvania County’s coffers to the tune of about $150 a year; a brand new one would make the county a few times happier.

    • Oh yeah!

      I still pay almost $100 a year on my 14-year-old pickup! So, over the past eight years, nearly $1,000 – on a truck I paid $7,000 for!

      As bad as that is, you can imagine the tax bite on a new $35,000 truck….

  23. When I was 21 and drove a Mustang Cobra I paid $200/month for insurance. That was only slightly less than the monthly payment. And that was the best price. I had looked at a Z/28 and another company wanted double that! Young guys get particularly screwed, again on collectivist grounds. No tickets and no accidents, didn’t matter. Your demographic statistically gets trashed and wraps cars like this around telephone poles, so this is your lot.

    Funny though that at the time I also owned a 4-banger Ranger and only paid $50/month for that, when you can use that vehicle to make yourself and others just as dead and property just as ruined as you can in a Mustang. Thieves will justify highway robbery any way they can.

  24. Well put, Eric.

    Btw, has anyone else noticed the increased advertising for motorcycle insurance? Why has this sector suddenly become so competitive? Or is it? I have no idea what insurance on an bike is but the adverts are quite conspicuous these days.

    • I have noticed the increased advertising now that you mention it. I thought it was just because I rode a bike I noticed it more. I’ll try and check my rates now and report back.

          • Shoot mang, that is for full coverage on a fully dressed hog too (1996 model year though).

            Also, I have five vehicles insured with the same company.

            • I have a multi-bike policy issued through Markel (“bike line”). For the four that are registered, I think I pay (have to check with my wife, but IIRC) about $300 a year, liability only. No way would I buy comprehensive for any of them. The newest is an ’03 and anything other than dropping it at a light would probably result in totaling it out, insurance adjuster-wise. The GL650’s a rat bike. I would not insure it at all if I could do so legally. The Kz900 is nice, but only worth about $4,000 or so.

              Now, I may get antique coverage on the S1 because it’s restored to almost museum quality and so actually worth some real money!

          • I actually called the company today and talked with a rep. I asked about my full coverage, told her I have a new engine/tranny/etc… and asked if that would all be covered and she said if I had receipts.

            That puts my bike near the 18k range.

            Something tells me it would be pretty hard to get that much for a total loss.

          • Dom,

            I am an independent insuarance appraiser and must warn you that your insurance agent gave you bad and wrong advise. A new engine and tranny ad no significant value to either bike or car, once you have driven them, they are now used (albiet lower mileage), the vehicle will still have xxx amount of miles on many major components (steering, suspension, cooling system, a/c, upholstry, ect. If the bike/car become involved in theft (non-recovered) or accident, you are covered only for “actual cash value (ACV), unless you specifically request a “stated value” policy and that will cost you more. AND even then, I am seeing some insurance companies that are attempting to find ways around that contract. I can tell you that in the past year, my business has gone from a dispute with the insurance companies about twice a month, to an average of 4 calls a week, and in most cases, the insured HAS been cheated!!!
            Tony Wright

          • Hi Tony.

            I figured as much. I was talking with a call center person. My experience has always been they’ll say whatever it takes to end the call quickly and happily.


          • There is a significant difference in insurance cost between CRUSIERS and Crotch-Rockets or “PCD’s” (Population Control Devices) as we call them here in Florida. Buy a cruiser if you want to keep it under $300 / year!

            • Also, age is a huge factor. When I was under 30, forget about it. I am in my mid-40s now and it doesn’t cost me that much to cover my 1200 cc sport bike. Less than $200/year, I think. Also, having a multi-bike policy helps. And, of course, a “good driving record.”

              A good radar detector is essential.

    • “Government is the great fiction through which everybody endeavors to live at the expense of everybody else.” -Bastiat.

      It says it so perfectly. What are these insurance laws about anyway? Draw a bell curve. To the right is risk aversion and saving for a rainy day. To the left is live for today, who cares for tomorrow, experience everything, don’t fear.

      Now imagine being fed a bunch of media crap that says people to the left are “unlucky” and people to the right are “lucky”. There’s no planning, no sacrifice, nothing else involved by luck. Like the way collisions are called “accidents”.

      Now what do people want? To live at the expense of others. To do less work themselves. Now let’s look at the bell curve again. Where’s the money? It’s on the right with these risk adverse save for a rainy day types. They have low costs and high mitigation. The people two or three standard deviations to the left have nothing. Why? Because they have no impulse control they do in the moment. The big bubble in the middle, what do they have moderate risk and cost.

      How can most of these people live at the expense of someone else? Insurance. Government mandated and regulated insurance with required minimum coverages.

      The carefree at the left get to really unload their costs. The middle of the bubble sees a moderate reduction. Everyone one more standard deviations to the right gets screwed. So about two thirds of the people can see a benefit by screwing over the remaining third.

      But there’s more. Government gets an added bonus. It can tell the people in the middle of the bubble that those one or more standard deviations to the left are driving up costs. And for that, new laws, new regulations, more power.

      That is why we have “social costs” instead of everyone providing for themselves. How to fix it? I say attack this notion of “luck”.

      Sure there is random noise, but it can be pretty well dampened out with good planning and knowledge. “luck” is a notion that people have no power over their lives and encourages them to actually have less power over their lives. We need to get that power back and the need for “luck” just goes away.

      What happens today is usually a consequence of the choices made yesterday. Luck is just noise on the data. With good decision making and freedom, free markets, etc, luck’s role is severely diminished. When you’re hapless making day to day decisions based on what feels right… well luck is going to play a major role in your life.

      • Good stuff BrentP. My dad rails against the “lucky you” crap all the time. He worked over 20 years in a machine shop making hydraulic parts, looked around at all the condo towers and apartment buildings going up all over the city, and decided he ought to get into property maintenance. Financed it all out of his own savings. Fifteen years in and now he turns down work because he just doesn’t want to get any bigger.

        But he gets the “lucky you” lines all the time from people sitting around on unemployment in the buildings he maintains. He tells me stories about people drinking beer and watching him work at one in the afternoon telling him how “lucky” he is to have work and run his own business. They don’t know that for the first five years he was working full time at the machine shop then doing yards and cleaning up grounds until sundown six or seven days a week. They don’t want to hear it anyway. It’s just “luck” to them, end of story.

      • Great point Brent.

        I’ve mostly heard the left side of the curve referred to as “the less fortunate” instead of “the unlucky” though.

        My (landline) phone bill was just raised to make cell phones more “affordable” to “the less fortunate.”

        I don’t see the need for a cell phone myself, but I’m paying for others to have them?

        Life, liberty, the pursuit of happiness, K-12 education, a car, a house, health insurance, a cell phone, heat, water, food, clothes, child care, and hundreds of other “inalienable rights.”

        It would seem that savers are suckers. More like suckees.

  25. Good point, why should we the responsible pay the price for those who refuse to be responsible? (100% against mandatory insurance)

    I have never owned a new car and only once did I ever make payments on a car and that was for a very brief time. (1988) Hell I paid cash for my house and properties.

    I am not a rich man, so I can’t afford giving gifts to banks or insurance companies.

    One more point, I actually believe that people without full coverage drive more responsibly. They have more skin in the game.

    • I bought an older Stingray years ago for $6k cash and put liability only on it. Comp even then was $1k per year. If I did not wreck it myself in 6 years I would have had enough cash left over to buy a second one! Ten years or more later it went underwater in a hurricane. Damm! Still I sold it for $1 after it was ruined.

  26. Here in Texas it’s the liability portion of the policy that’s the lion’s share of the cost, especially if you keep a high deductible (say $1000). I even kept full coverage on my old CJ because the additional amount ended up being on the order of $50 per year. In ’09 I went from a ’90 Nissan 300ZX turbo to an ’08 Lotus Exige and my insurance costs went up about $100 per year (10%).

    And that right there points out the problem – the liability is required by folks with guns on all cars, the comprehensive/collision is only required by the lender (not the law) if you’re making payments. No point in working to make liability cheap if everyone has to buy it at gunpoint.

    • Yep. For my new car I could vary around the collision and comprehension all I wanted and the cost barely changed. I didn’t consider dropping it entirely but I suppose I could. I’ll look at the bill later by I doubt it’s more than 1/7th or so of the total cost.

      It’s actually my house insurance that’s killing me right now. They up’d the replacement cost to more than double what I could sell it for.

      • And that brings up another financial farce being perpetrated upon all of us. Your home/property is valued by a third party based on the actions or inactions of other people, the market, the strength of the banks, and having absolutely nothing to do with anything you may have done or not done. You property is valued as low as it is based on what some completely unseen and disaccosiated mystery person says that’s what it is worth. Gee. That’s fair.

        • Try paying $2800 a year on ins and $1500 in taxes on a $80000 house I don’t live in, trying to sell. Add to that; most of the houses in the neighborhood have been foreclosed on, average sell is $30000 or less. The offers I have gotten (5 in 3 years) all turned down by the bank because its a modular and they want to treat it as a doubwide trailer. (Not at all one, and its well made and also been upgraded while owned) yet tax man values this unsellable property at $160000+! Without a garage. How does that add up? I’m paying for the neighborhood that bailed.

          • The tax on real estate is perhaps the most noxious – most evil – of all taxes, because it denies us even the possibility of ever truly owning anything beyond our personal possessions. If one could freely own one’s land/home, then, once paid off, one could live independently, without the need to keep working – in order to produce money to pay off the local mafia (government) in perpetuity. It is possible to stop paying income taxes, if one no longer earns the income to be taxed. But they have rigged the system such that us cattle must constantly “produce” – not for our benefit, but for theirs.

          • Eric, what irritates me the most about the system is so few even see it.

            The serfdom and slavery and company town stuff has all been re-established. Different means to the same ends.

            • Ditto!

              Don’t you sometimes feel like you’re one of the few people on Earth who’s not in a hypnotic trance? To me, it’s all so obvious. So what accounts for the pervasive indifference and acceptance? This is the riddle of our time!

          • It’s one of the ways I feel like an alien sent to Earth either to observe for scientific purposes or as punishment 😉

  27. Financially responsible and accountable Americans are swimming with lampreys, piranhas, and cookiecutter sharks.

    • With the proliferation of fiat money and new regulations, it is harder and more difficult to be “responsible”, because what looks reasonable and responsible is not. As a matter of fact, we are punished for doing the right thing and rewarded for being bad.

    • Ignorance is bliss. For one thing my insurance cost is half of what you have quoted. Second that insurance limit that I have would bankrupt you if you had an accident that would use the limit on the policy.


      Another thing is that you say even with a mandatory insurance law some drive without insurance. You know Eric who cares? It was calculated that in a state Like Illinois more than a million more people have insurance than they otherwise would without the law. That means there are more than a million more people in Illinois that are more capable of paying their liabilities if they cause an accident. I carry underinsured and uninsured coverage on my vehicles. With the mandatory law that cost of coverage is a small fraction of what it would be without the law. That saves me money. You would prefer to have my costs and millions of others to go up or if they do not carry such coverage for the uninsured then they stand the far greater chance of not being reimbursed at all if they are hit by someone.

      The view that some have that you can not stop everything bad so we should do nothing is not bright in my opinion. If we did something it would help millions of people so doing nothing to me is stupid.

      Time and again you bring up that auto insurance companies rip you off. Give us some facts about that! There is a large number of insurance companies in each state. With this large number of companies if one of them as you say rips you off it is easy to move to another company. That drives down prices. Tell us how such a competition leads to gouging you out of money?

      • Considering you claim your car doesn’t have a CHMSL what you pay for insurance on your pre-1986 beater isn’t relevant.

        As to the Illinois data you never showed the law got irresponsible people to pay for insurance. Just that if forced more responsible people to purchase it rather than covering their risk by other methods.


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