Guest Post by Eric Peters
The following is an example of the Augean Stables that will have to be mucked out before there is any hope for a rebirth of liberty in this country. It was submitted by what I fear is the typical American nowadays – the reflexive authoritarian, moral illiterate and market economics ignoramus EPautos readers refer to as a Clover (more here).
The subject matter is mandatory insurance. In this case, car insurance. But the principle applies generally (its acceptance is the reason why we now have mandatory health insurance and probably soon mandatory life insurance, with much more to come, if the principle is not identified and rejected) and so is of general interest.
“As you stated 35 thousand dollars is not enough anymore but at least 35k goes toward the injured party. Car insurance is a competitive business. Insurance companies do not make thousands of dollars off of you. If Libertarians were right that car insurance companies make a fortune off of you then wouldn’t you think Eric would open his own insurance company and make millions of dollars? Eric my insurance for my car is about $580 per year with $300k coverage. Only a fraction of that bill goes toward liability. Eric that is far from getting rich off of me due to the costs that insurance companies have but as Eric says, an imbecile never did understand finances. I also pay extra so that I am covered up to a million dollars if I cause harm to others. I am not like a Libertarian and make the innocent go bankrupt and lose everything when you hit them. If we had your world a guy can be stopped at a stop light and lose everything he has. Eric that is why I do not want a Libertarian society. I know, you enjoy harming the innocent.”
Clover,
In the first place, a “competitive business” does not need to force people to do business with it.
When you cannot say no to a transaction, you have almost no negotiating power.
Geico and Progressive are like the Lucchesi and Gambino families. Maybe you can choose to pay tribute to one of them rather than the other; but you will pay, regardless. So – by definition – you pay more (when you would have preferred to pay nothing for a “service” you don’t need or want) and what you pay will necessarily be more, regardless, precisely because there in no option to say “no.”
Do you really maintain that the cost of a thing is reduced when people are required to buy it – provided they are allowed to buy it from more than one government-backed mafia? That the cost of a hamburger would be less if government required everyone to buy one each week, but allowed us to buy it from either McDonalds or Wendy’s?
In fact, the cost of a hamburger is low because both McDonalds and Wendy’s must live in perpetual dread of people electing to not eat there at all.
The insurance mafia is one of the most profitable government-backed cartels in existence because it has a captive market. When everyone is forced to pay in, the price goes up – not down.
If insurance is so fabulous, so desirable, why, pray, must the mafia force people to buy it?
Clover writes: “Insurance companies do not make thousands of dollars off of you.”
Really? Let’s see. I have been forced to pay the mafia on average $1,000 annually to “cover” all my vehicles. I’ve been doing so, under duress, for decades and have yet to cost them a cent in losses. But being forced to buy insurance has cost me tens of thousands of dollars. I would literally have at least $30,000 in my bank account right now – and that’s not factoring in the lost opportunity cost of that money. I could have used it to buy property, for instance. Property that might have tripled the initial investment.
So, in fact, the insurance mafia has made a small fortune off of me. As it has off of millions of other people, none of whom have ever caused any harm to anyone. Yet who have had harm done to them – via being compelled to purchase mandatory insurance.
You justify this on the basis of pre-emptive punishment. Your position is that the possibility of harm-caused justifies the assumption that harm will be caused. On this basis, it is acceptable to force people to indemnify against what has not actually occurred – even if it never occurs.
Logically, on this basis, there also ought to be mandatory Murder Insurance, since it is equally possible that any of us might, at some point, commit a murder. Murders are costly to society, too. Therefore, everyone should be required to buy mandatory Murder Insurance. And so on.
But this – logic – does not penetrate your numb skull.
Clover writes: “If Libertarians were right that car insurance companies make a fortune off of you then wouldn’t you think Eric would open his own insurance company and make millions of dollars?”
No, Clover. And do you know why? It is because Libertarians do not believe in thuggery. Do not use violence to steal people’s money – as insurance companies do.
As you do.
Don’t get me started on insurance companies. My sister and her husband had a State Farm policy with $300,000 accidental death coverage. On the way home from making a bank deposit after closing their gas station/convenience store, a drunk driver operating a stolen car hit him head on killing him.
Coincidentally, State Farm also insured the stolen vehicle, driven by a recent releasee from DWI prison, who had no license.
State Farm tried to pay my sister the $25,000 Accidental Death coverage on the liability only policy that was delinquent on the truck, which was stolen by a non-licensed driver, who was drunk.
After the lawyer took HALF of the $300,000 from the lawsuit months later, she had $125,000 more than the insurance company wanted to pay.
I’m sure both the insurance lobby and the litigation league got nice donations from that policy award.
when insurance becomes mandatory, it is no longer insurance, it is a tax
It’s no wonder that Warren Buffet the Money Man’s core business is insurance.
Most jurisdictions allow you to post a cash bond in lieu of liability insurance to provide evidence of the absolute means of covering any damage you do while driving on public roadways.
No fault insurance as intended, where it is allowed, allows you to take your own risk by having you insure against any damage to your own vehicles by anyone whether they are insured or not. No insurance means you eat the bill yourself if you have an accident.
Maybe those who don’t like carrying liability insurance to protect others from their negligence should forgo it and post the bond or move to where no fault is in used.
Insurance companies are the puss filled boils on the backside of the corrupt state that we are forced to support.
starfcker is right – it is taxation buy quasi-state organizations to feed the corporate overlords.
Funny thing……. If you check in to it, that most of the tallest skyscrapers in any town or city are usually owned by either banks or insurance companies!!!
“Funny thing……. If you check in to it, that most of the tallest skyscrapers in any town or city are usually owned by either banks or insurance companies!!!”
Or Trump.
When you are FORCED to buy that is a racket. There is nothing to drive the prices down, only up. Lack of insurance doesn’t keep bad/drunk/suspended drivers OFF the road either.
Insurance companies are the scum of the Earth. The worst are the health insurance companies.
Anonymous, name me some jurisdictions where you can post a bond instead of buying insurance. Don’t know if you are right or wrong, just never heard of that.
Starfcker, did some research (Google is my friend) and most folks strongly recommend NOT self insuring yourself. Just sayin’
Jay, why would that be? Insurance is betting against yourself. I tend to bet on myself. I buy the minimum policy that I am legally or contractually obligated to buy, and that’s it. Someone wants to pick a fight, as happens on occasion, they have never gotten satisfaction from me, I promise you. Fear can cause you to overinsure lots of things, at great cost. Save your money
I never considered the high cost of insurance until I casually totaled the cost of auto, health, house, and came up with $1000+ per month. WTF?
There are people who don’t make that much in one month. Those folks get free housing, free medical insurance and free food.
And if your not only poor but illegal also, then you don’t have to file taxes because you don’t have an ID, and you don’t register your car or pay auto insurance because the car isn’t registered because you don’t have a driver’s license because your illegal.
Which is why uninsured motorist insurance is called, ‘illegal insurance’.
@Ghost, a lawyer is the best way to insure you get the most from any insurance company.
They have people called claims adjusters to reduce or deny any benefit you think your due.
I recall an AIG policy was called a ‘right to sue AIG’ for payment.
Chen, one of the most difficult things to find, in business, are good attorneys. I kind of think you have to sort of create them, out of what’s available. I am the client from hell, I’ve known all the guys i work with since kindergarten, and it’s still very stressful. I want to win. They want to settle.
@Chen… my point was that my sister had to get a lawyer to sue the company for trying to pay $25K on a policy that was NOT VALID since the car that hit my brother in law was stolen, the policy on it lapsed, and the driver not licensed.
While hers and her deceased husband’s full coverage on their vehicle included accidental death as well as uninsured motorist.