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I honestly don't understand why insurance is seen as a private affair. Everyone who is not very wealthy requires risk management, because otherwise they run a c

I honestly don't understand why insurance is seen as a private affair. Everyone who is not very wealthy requires risk management, because otherwise they run a constant, non trivial risk of complete personal ruin (not just financial ruin, but inability to pay for medical care). Humans are not capable of correctly computing the acceptability of small amounts of risk of ruin. The straightforward solution is to pool risk so that everyone pays a fraction of each catastrophe, which should just be a federal tax. At a minimum, if you have children, lack of insurance should not be an option. Then again, I'm also in favor of decreasing U.S. freeway/highway speed lilims and enforcing them strictly (like Japan) for risk reduction reasons... I suspect that my antipathy to American libertarian machismo is far from universal ;)

seanp2k2 10y ago
It's a private affair because it's a great racket. Collect money from everyone for doing nothing, then try hard not to pay when people need it. There's a reason that many insurance companies have been around for many decades and are in the Fortune 500. Look up who underwrites your policies and you'll see what I mean.
- antisthenes 10y ago
  Like many industries, it's a great jobs program for those who would be unable to do anything else (think middle aged insurance peddlers with no technical skills and poor enough health to be unable to do manual labor jobs). The entire car insurance industry, for example, could easily function with a fraction of its current workforce. We have the statistics on car crashes, we have the statistics on driver demographics. All that's required is to aggregate the data and target some number to achieve, say, 3% economic profit. You could eliminate the jobs of many risk analysts and sales and have the entire industry function without the overhead of having to pay 90% of useless workforce. Is it a cruel way to look at it? Absolutely. Killing jobs is political suicide. But could it be done? The risks are known.
jperras 10y ago
Your throwaway comment about freeway speeds is a bit odd, since there are verifiable instances that show that absolute speed is not the deciding factor in road fatalities. The most famous example, of course, is the German Autobahn: "The autobahn fatality rate of 1.6 deaths per billion-travel-kilometers compared favorably with the 4.6 rate on urban streets and 6.5 rate on rural roads." https://en.wikipedia.org/wiki/Autobahn#Safety https://en.wikipedia.org/wiki/Autobahn#Safety
- legulere 10y ago
  Most of the German Autobahn system has a speed limit and you have an recommended speed of 130. Also your link says: > In 2012, the leading cause of autobahn accidents was "excessive speed (for conditions)"
  - jperras 10y ago
    Yes, I know it says that. It's a useless "fact". What highway in any place in the world would have something other than excessive speed (for conditions) as the leading cause of accidents? The only thing I can think of is landslides/avalanches in very mountainous regions, and even then I'm sure there are more than enough accidents/fatalities due to taking a corner faster than you should. I also stated that "absolute speed is not the deciding factor in road fatalities". Absolute speed is different from excessive speed for given conditions. Going 60km/hr on an unplowed, snowy, black-ice ridden road can easily be more dangerous than going 160km/hr on a dry surface with clear conditions.

seanp2k2 10y ago

It's a private affair because it's a great racket. Collect money from everyone for doing nothing, then try hard not to pay when people need it. There's a reason that many insurance companies have been around for many decades and are in the Fortune 500. Look up who underwrites your policies and you'll see what I mean.

antisthenes 10y ago
Like many industries, it's a great jobs program for those who would be unable to do anything else (think middle aged insurance peddlers with no technical skills and poor enough health to be unable to do manual labor jobs). The entire car insurance industry, for example, could easily function with a fraction of its current workforce. We have the statistics on car crashes, we have the statistics on driver demographics. All that's required is to aggregate the data and target some number to achieve, say, 3% economic profit. You could eliminate the jobs of many risk analysts and sales and have the entire industry function without the overhead of having to pay 90% of useless workforce. Is it a cruel way to look at it? Absolutely. Killing jobs is political suicide. But could it be done? The risks are known.

jperras 10y ago

Your throwaway comment about freeway speeds is a bit odd, since there are verifiable instances that show that absolute speed is not the deciding factor in road fatalities. The most famous example, of course, is the German Autobahn: "The autobahn fatality rate of 1.6 deaths per billion-travel-kilometers compared favorably with the 4.6 rate on urban streets and 6.5 rate on rural roads." https://en.wikipedia.org/wiki/Autobahn#Safety https://en.wikipedia.org/wiki/Autobahn#Safety

legulere 10y ago
Most of the German Autobahn system has a speed limit and you have an recommended speed of 130. Also your link says: > In 2012, the leading cause of autobahn accidents was "excessive speed (for conditions)"
- jperras 10y ago
  Yes, I know it says that. It's a useless "fact". What highway in any place in the world would have something other than excessive speed (for conditions) as the leading cause of accidents? The only thing I can think of is landslides/avalanches in very mountainous regions, and even then I'm sure there are more than enough accidents/fatalities due to taking a corner faster than you should. I also stated that "absolute speed is not the deciding factor in road fatalities". Absolute speed is different from excessive speed for given conditions. Going 60km/hr on an unplowed, snowy, black-ice ridden road can easily be more dangerous than going 160km/hr on a dry surface with clear conditions.