There’s a sound basis, morally, for arguing that no one ought to be forced to buy car insurance. It has as its premise the idea that it is wrong to force anyone to pay for harms they might cause – because they have not actually caused them. Yet forcing people to hand over money is a harm caused – to the person who is forced to hand over the money. The harm is compounded by the inarguable fact that the insurance companies are literally in it for the money; i.e., they are for-profit, private businesses that use the government to force people to hand over money to them for harms they have not caused.
There is an even stronger argument to be made that no one ought to be obliged to pay for the choice made by others to purchase a hugely expensive to repair/replace vehicle. Yet that is exactly what is happening to millions of people who are trying to keep what they are forced to pay for insurance – to “cover” harms they have not caused – to a minimum, by not owning expensive to repair/replace vehicles themselves.
Their “coverage” used to be based primarily on such factors under their control, such as the value of their own vehicle and their own driving record, including their record of accidents and claims. A driver who had a “clean” record – as far as tickets for trumped-up traffic offenses – and who had not caused any accidents or filed any claims – paid much less for basic, liability only insurance as per government demands. This was among the perks of not buying a new vehicle, which generally entails having to buy comprehensive coverage, which is much more expensive.
That perk is not what it used to be.
The cost of basic, liability-only insurance had been increasing by double digits – on average, by about 30 percent over the past three years. The main driver is not what is referred to as “inflation.” It is the insurance companies making adjustments – as they style them – to the cost of everyone’s government-mandated coverage to cover the ballistically increasing repair/replacement costs of new vehicles.
The way they do the math is basically as follows: You may own an old, paid-for vehicle that’s not worth much. But if you get into an accident with a new, $75,000 vehicle, it is going to cost the insurance company a lot more to repair or replace it than would have been the case a few years ago, when $75,000 vehicles were far less common. As they have become common (the EV push accounts for much of this) the odds – the mafia will claim – are higher that you might be involved in an accident with one.
It might be only a minor one. But nothing is “minor” when it comes to damage to a $75,000 vehicle – or even a $50,000 vehicle (which as you probably already know is now the average price paid for a new vehicle). A low-speed scrape – the sort of impact that, in the era before fragile plastic-covered front and rear clips with fragile plastic headlight assemblies and fragile plastic grills – might not have resulted in any physical damage at all or at least, damage so trivial that repairing it was not a big deal – is now often a very big deal.
On the Bill Meyer Show the other day, a technician called in to talk about the replacement cost for one headlight assembly – on a late-model Subaru. Would you believe $400? Not counting the labor to do the install. The headlight replacement costs if it’s a Mercedes or Lexus (or any other luxury brand) can be twice that.
Guess who’s paying for that?
Even if you haven’t actually cracked one by backing into a Mercedes or Lexus at the supermarket. The assumption is it’s only a matter of time before you do and – therefore – you must pay (in advance) for these damage you haven’t been the cause of, because you might be the cause of them.
This is wrong on multiple levels. We have already discussed the wrong entailed in forcing people to pay money for harms they have not caused, for the profit of private businesses that use the government as their thug enforcer. The other – more insidious – wrong is forcing people who are trying to live within their means to pay more because other people who have much more money or who are willing to spend much more on a vehicle choose to buy extremely expensive things and then put them in harm’s way – potentially.
No one is forced to buy a $75,000 vehicle (or a $50,000 vehicle for that matter). It is something some people do because they can afford such expensive vehicles and don’t mind paying hugely extra for them. Is it not reasonable that they pay the increased potential repair/replacement costs of the choice they made?
How about a $30,000 cap on repair/replacement costs as the basis for what people who do not make that choice are forced to pay via the premiums they are forced to buy? In other words, if you – the owner of an older, paid-for vehicle – happen to cause an accident, your government-required liability coverage – the coverage that covers damage to the other guy’s vehicle – will cover up to $30,000 damages to the other guy’s vehicle, but anything more than that is the responsibility of the other guy’s coverage. The owner of a $75,000 vehicle would not have to buy more than $30,000 worth of coverage; but if he wanted coverage beyond that, he’d have to choose to buy the additional coverage and pay the extra cost.
Just as he chose to buy the expensive vehicle in the first place.
This is fair because – again – it is a choice to buy a $75,000 (or $50,000) vehicle and that choice ought not to impose costs on others. Lower-income folks are literally being driven out of driving by insurance costs and people who are just trying to keep their costs low are being made to pay increasingly obnoxious sums – even though they have done nothing themselves to justify this. They are being effectively made to shoulder the costs imposed by others, over whom they obviously have no control. 
That’s wrong.
A cap on mandatory liability insurance coverage – and thus. costs – is a reform that would at least make insurance affordable again – for those of us who aren’t interested in buying $75,000 (or even $50,000) vehicles and resent being made to pay for “coverage” as if we had bought one.
Because we might cause damage to one.
. . .
If you like what you’ve found here please consider supporting EPautos.
We depend on you to keep the wheels turning!
Our donate button is here.
If you prefer not to use PayPal, our mailing address is:
EPautos
721 Hummingbird Lane SE
Copper Hill, VA 24079
PS: Get an EPautos magnet or sticker or coaster in return for a $25 or more one-time donation or a $10 or more monthly recurring donation. (Please be sure to tell us you want a magnet or sticker or coaster – and also, provide an address, so we know where to mail the thing!)
If you’d like a Baaaaa hat or other EPautos gear, see here!
Hey Eric. I moved from Louisiana to Mississippi earlier this year, and the amount of money I was paying in auto insurance was cut in half. Louisiana is run by nothing but crooks. The last few insurance commissioners are currently sitting in prison. Louisiana has some of the highest insurance cost in the country, and the state wonders why people are leaving.
Ahem CB,
Perhaps it’s the “Deltaesque Flatland nature” of the state AND The swarms of blood sucking female mosquitos that appear at …. Dusk might have also influenced your decision?
FYI ,I Miss my “Coonass” Lafourche Parish mil service bud……He actually had a dog named “Phideux”.
and the “smell of Bagass in the morning”……
Oh yeah ….Cajin cooking IS UNREAL!!
I was living on the Westbank in Jefferson Parish, and it has gotten rough over there. The worry of high crime and the smell from the garage dump is what led me to leave. Plus the blood sucking politicians. But I still get plenty of good ole cajun cooking in South Mississippi. My mama makes a killer pot of chicken and sausage gumbo.
It was nice being able to drop insurance once my house was paid off. They got us by the balls with vehicles though. Something does need to be done about this protection racket.
Amen, Ben –
Just considering home insurance: A typical policy costs around $2k annually. If you pay that for 15 years, you have paid out $30,000. After 30, you will have paid $60,000. How likely is it that your house will be damaged to either extent over that span of time? Maybe if you live where there are earthquakes or near a flood plain/ocean or in an area where tornados are common. But if you do not live where such things are common or even realistically possible, then spending this kind of money to “cover” the possibility of costs that are very unlikely to ever be incurred is in my view foolish. Far better to put the money aside for the just-in-case stuff. Same with car insurance. A competent, attentive driver is unlikely to ever be the cause of a major accident. Not spending the money on “coverage” means having the money to pay for things that might need to be paid for – and still having the money, if they don’t need to be paid for.
Much logic here, Eric. That’s why it will never be done. You must have a Byzantine system of insurance else people might wake up to the scam that it is.
Also, there should be the threat of jail time if you cause serious harm to people due to negligence. Penalizing someone more severely for have a BAC of whatever than someone who is “sober” for the same harm is ridiculous on the face. Talk about unequal treatment. Grandpa can’t see and runs over three kids and drives away because he thought they were trash cans (actual incident in FL) needs to get sent to jail.
Thanks, Mark!
I agree. I’ve used the same argument myself. What does it matter whether the guy who ran the light and hit you was “drunk” or just careless? The hitting you is what counts. Or ought to. I find it especially remarkable that conservatives tend to be the most supportive of “drunk” driving laws, such as sobriety checkpoints yet at the same time get indignant (rightly) about being hassled just because they own (or carry) a gun. They aren’t harming anyone, they say. That’s true. Neither has the guy who had a beer or two and didn’t wreck.
Wait….wait…. There is already essentially a cap on what liability insurance will pay for, in the form of state-mandated minimum coverage that one must carry- usually (depending on which state) $10K-$20K). So, you wipe out somebody’s Tesla, and your insurance company “throws in the policy” (i.e. pays the state-mandated minimum- if that’s all you carry) and the Tesla owner then has to sue you for the rest. Am I missing something here?
So really, it’s even worse than what you describe, Eric- in that all that money we pay for “mandated liability coverage” really doesn’t even cover the actual cost of damages if we were to cause more damage than what minimum coverage covers (If we carry the minimum). So, over the decades, we are really paying multiples of that $10k-$20K in “coverage” that we are getting….just for them to pay that amount if we actually were to cause damage.
And it’s pretty easy to exceed that minimum these days, even in a relatively minor accident….much more if we total someone’s new $75K car.
Personally, I carry much more than the state-mandated minimum- it only costs like $30 a year more for significantly higher coverage limits. So if I ever do cause damage, and it exceeds the state-mandated minimum, at least I am not automatically getting sued, or ending up with a lien on my paid-for home and property. I mean, if we are forced to carry the abhorrent mandated liability insurance, paying literally a few dollars extry for coverage that will actually cover you seems like one of the rare instances of a bargain when it comes to insurance.
Tl;dr; We’re not even covered for totaling someone’s $75K car, only for a fraction of it, if we carry “only” what the state mandates. So that mandated liability coverage is even a worse deal than we think.
Am I looking at this right?
Yes, you are. It makes a lot of sense to carry extra liability and medical payments, and, sadly, also un- and under-insured. They will come after whatever you have, but if someone with nothing rams you, unless you have un/under you are on your own. Both to fix your car, and your medical bills. At most, you can sue the uninsured driver, and probably win, and get nothing.
That’s all part and parcel of government decrees. They only apply to the responsible. And like you say, this proposal wouldn’t change it at all. If you are not the one at fault, you are on your own to sue to recover whatever you can.
How did people on the old days, horse and buggy days (when we were free) handle accidents? Let’s say some farmer just bought a brand new Studebaker freight wagon (probably a lot of money at the time) and some kid crashes into with dad’s old freight wagon and destroys or heavily damages the farmers brand new Studebaker freight wagon, how did they handle that? I damn well know three was no insurance back then.
Like pretty much every other tort, by dear old dad footing the bill, then taking it out of the son’s hide. Or the kid himself would indenture himself, to avoid the shame of being known to all as a skinflint.
A world of low time preference, honor-bound people is a fine thing, and solves many problems, but it is not what we have, nor could most moderns even aspire to honor like that anymore.
Easy! The kid just cuts the farmer a new board to replace the busted one; maybe shaves him a new spoke, and puts a Band-Aid on the horse! 🙂
The benefits of a simpler time!
Good idea. I also think the liability insurance should be rated on the policy holders alone, not on each vehicle owned. I have may vehicles (motorcycles actually), why do I have to pay more and more every time I get one when I only have one ass and one is in use at a time?
I love this idea- I doubt insurance companies would go for it. I was briefly an insurance agent and it’s a really greasy, money hungry industry. I highly doubt anything would be done by this industry for the benefit of those of us with older cars unless it benefitted the insurance companies directly.
I’m annoyed because I was always told that when I got older it would be cheaper to insure my cars. Now I’m 53 with a clean record and insurance is still very pricey. Even with 6 cars there is no volume discount, which makes no sense because I can only drive on at a time.
By the way, I was checking out those radio shows you do, Eric, I might have to start listening regularly.
You should be insured as the driver through a liability policy that covers 1 or 100 cars, yours or any other one you happen to be driving.
Separate liability based on the car is a scam.
A roofer doesn’t get charged different liability premiums based on the roof he is repairing.
Hi Dan,
Yes, that makes sense – if we accept that we have an obligation to accept being forced to buy insurance. But the problem then would be the mafia would impose even higher premiums because of all those potential costs – multiple vehicles – they are assuming. The whole thing is a scam. Insurance is arguably one oof the most effective tools being used to separate Americans from their money and their liberty. A reawakening of the ancient principle that a man doesn’t owe others anything unless he has caused them harm is the only truly effective reform.
“How about a $30,000 cap on repair/replacement costs as the basis for what people who do not make that choice are forced to pay via the premiums they are forced to buy?”
I agree this would have the effect of putting a damper on both insurance and car prices, but how is this not also a NAP violation? The government is explicitly saying, “You will not be made whole.” That is an uncompensated taking, no matter how you look at it.
It would be NAP compliant for .gov to say that all lawyers who use their court system are capped at a certain compensation, but not that people who are injured must suck it up, like we currently have to do with un- and under-insured.
Auto, home, health insurance, taxes and inflation; the ruling class has the perfect destroyers of the middle/working class people. All that while claiming it’s the other party or big businesses fault and you need to give us more power to “fix” it.
Back in the 90’s, then speaker of the house Jim “Ft. Worth(less) Wright of Texas proclaimed “we, we only want to help yeww” when addressing the public’s outrage over rapidly rising cable tv subscription prices. We got helped alright too.
Prepare for more “help” coming soon
The real problem is the initiation of force. Our servants in the government have NO legitimate authority to mandate anything, be it car insurance, quackcine injection, draft registration, tax filing, or seat belt wearing. In a free country where the people rule themselves, all of this crap is laughed at. Accordingly, after the usurpers were laughed at, they hired vast gangs of violent enforcers to terrorize the people into compliance.
In the case of car insurance, it is mainly a matter of seeing that the lawyers get overpaid. Without a well of forcibly stolen money to dip into, it isn’t worth suing most people.
Traffic accidents become a matter of dealing respectfully between the involved parties, a certain amount of Christian forgiveness will come into play, and the damaged will be made whole without an extravagant bonus (sue with me! Recent $12M verdict in a soft tissue injury!). So the whole litigation industry shrinks to an appropriate size.
Well said Ernie,
The proliferation of lawyer ads on the teevee get people into the mindset that if they’re involved in an accident they won the lottery. A few years back the local AGW’s busted up a ring that was staging “accidents” to collect the insurance money, I would bet that there’s a lot of that happening.
Where’s Ernie The Politician?! You’re not talking like a politician here, Ernie! 🙂
We all know that sense + morality, and politics don’t mix!
I’m not a politician, I’m the piano player in a whorehouse. It’s honest work and people seem to appreciate it. Fringe bennies ain’t bad either…
The insurance industry has a lot more data about you and your car too. Not just from telemetry, but also from CarFax, electronic public records, billing software used by dealers and independent shops, and better mining of claims data. So even if you can get someone to not report a minor accident (increasingly unlikely thanks to all the “rule followers”), the news of the incident might still percolate up to Flo’s minions.
I’m guessing most people are oblivious to the cost of insurance since nowadays it’s automatically deducted from one’s checking or savings account. Out of sight, out of mind.
It’s a good idea but I doubt it will ever happen. Just like your odds of ever getting compensated when an illegal alien in an uninsured car hits you.
In the latest episode of “The Questionable Garage” on YouTube the host mentions that his older Escalade was hit by someone who made a left turn right in front of them who did not speak English but was licensed and insured; in other words it’s not just CDL drivers who don’t understand English or road signs.
To the US voter: start by having campaign finance laws that are draconian (no donations more than 10$ per person) and term limits that cannot be circumvented (3 terms house of reps., 1 term senate and president). plus age limits of 70 on ANY form of public service. in the present circumstances these are impossible to achieve, peacefully!
This is a great idea. It bears repeating over and over. The only tweak would be lowering the age to 60, perhaps. And an ironclad condition of every single politician showing full transparency. All their real estate holdings (even in LLCs) and especially their residences should be easy to access public knowledge. So far they have made these things impossible through peaceful means. If they continue, they should come to expect these changes through fire and sword.