13 ms·

As a society we should vote for car insurance work this way too instead of feeding fraudulent car insurance industry.

judge2020 6y ago
Can you describe what exactly is wrong about the current car insurance industry? It sounds like this is exactly how car insurance currently works and it's a very regulated industry, perhaps only behind the financial industry and car manufacturing itself.
- Trias11 6y ago
  In the true market "ship" model you'd pay 1/10 of what you're paying now. In the government enforced model you're overpaying 10x+ fold.
  - speedgoose 6y ago
    I don't understand. My car insurance is run by a mutual organization and they don't collect 10 times more money for no reasons. If you reduce the income of the insurance, who is paying ?
    - Scoundreller 6y ago
      Maybe OP is suggesting there’s a lot of fraudulent claims in auto insurance, or poor driving/maintenance practices that lead to more claims. When your insurance company has a lot of customers, you don’t care about your big claim’s contribution to rate increases because it will be pennies/month. (Yes, I understand your rates can go up if you’re at fault, but you can also stop driving, drive without insurance (in some places) or reduce your policy). While this ship has thousands of containers, they probably run through a handful of shipping agents that won’t be in business for long if they make fraudulent claims.
      - imtringued 6y ago
        I don't know how insurances work outside of Germany but processing insurance claims is the only thing where insurances can lose money so they will reward you for good driving/maintenance practices with lower fees. If you run a insurance company your goal is basically to become redundant. The best case scenario is to collect a monthly fee but never pay out any insurance claims. Fraudulent claims are pure losses so there is already a strong business incentive to avoid those.
        Scoundreller 6y ago
        I guess your tow truck drivers are more respectable than ours that cloned police’s pricey “encrypted” radios to get to accidents faster, charged insurecos hundreds for the tow, would add damage to cars and bring them to sketchy repair shops: https://nationalpost.com/news/toronto-cop-part-of-organized-crime-group-involved-in-vicious-tow-truck-wars-chief-says https://nationalpost.com/news/toronto-cop-part-of-organized-... For some reason, health care expenses related to motor vehicle accidents are paid by the at-fault’s insurer instead of the public health system, so there’s lots of fraud there too. And more product for insurers to sell. Since the at-fault insurer pays, there’s a lot of incentive for fraud for the “victim”. Some call it the auto-lotto. Because we created lots of arbitrary fault-determination rules so insurers can’t fight eachother to assign fault, it’s not difficult to stage an accident where someone else is at-fault.
        iso1631 6y ago
        > I guess your tow truck drivers are more respectable than ours that cloned police’s pricey “encrypted” radios to get to accidents faster, charged insurecos hundreds for the tow, would add damage to cars and bring them to sketchy repair shops: In my country the insurance company has a list of approved garages and sets the price. Nobody is going to pay a tow truck for preemtively moving a car, they might arrest them for taking without consent. If a car really needs a tow for safety purposes, the police will organise that based on their pre-existing contracts and paid for a known price (by the insurance company, or the car owner) If the car is abandoned the council will eventually shift it and claim the cost back as littering If the car is safe though it's upto the owner to contact their insurance company and arrange for them to come out and shift it. Multiple companies racing to the scene sounds like something from the 1800s with fire brigades sabotaging each other.
  - billylindeman 6y ago
    There's significant counterparty risk in that model. What happens when there is an incident and people don't have the money to pay up?
    - eru 6y ago
      You seize their cargo.
      - billylindeman 6y ago
        You seize the lost 1800 containers?
        eru 6y ago
        The people who lost containers get paid compensation. If they don't want it, the shipping company doesn't care. The people who didn't lose containers are the ones who have to pay up their share of the losses. If they don't pay, you seize their cargo.
  - Retric 6y ago
    Car insurance is an extremely competitive market which is the opposite of a monopoly. Food is also ‘mandated’ by basic biology but still ends up being available for cheap.
    - sushshshsh 6y ago
      Yeah, $50 a month for liability insurance always felt like a really fair deal to me. Pleasantly tolerable fee for a day where my car hits black ice and physics takes the wheel
      - metaphor 6y ago
        > Pleasantly tolerable fee for a day where my car hits black ice and physics takes the wheel Hope that day doesn't come because, ironically, liability won't cover your losses. It may, in full or part, cover the incidental loss of others impacted, but not your own.
        gambiting 6y ago
        What do you mean? In the EU every car insurance has to cover minimum 1 million euro in personal liability and 5 million in 3rd party liability. My own with Aviva covers 5 million euro for personal and 20 million for 3rd party. But car insurance typically doesn't pay healthcare bills since healthcare is nationalized, so it's very hard to imagine how payouts would be anywhere near those sums. You'd need to crash into multiple buggati veyrons to get close to the maximum liability limit. I'm paying £400/year.
        dmurray 6y ago
        > In the EU every car insurance has to cover minimum 1 million euro in personal liability and 5 million in 3rd party liability. Source on this? I've always understood you only needed third party insurance, and the EU website [0] seems to back this up. > it's very hard to imagine how payouts would be anywhere near those sums. If you kill someone or permanently incapacitate them, you could be on the hook for their lifetime loss of earnings. Here's [1] a family being awarded €650,000 following the death of their mother. Agreed, it's still hard to rack up €20 million and I don't know what the precedent is if you run over a billionaire, but in theory I believe the payout here is uncapped. [0] https://europa.eu/youreurope/citizens/vehicles/insurance/validity/index_en.htm https://europa.eu/youreurope/citizens/vehicles/insurance/val... [1] https://www.personalinjuryireland.ie/news/fatal-car-crash-injury-compensation/ https://www.personalinjuryireland.ie/news/fatal-car-crash-in...
- jeromegv 6y ago
  Quebec has quite an interesting system. Everyone must pay in the same national car insurance. You are unable to sue anyone for what happened to you on the road, if you get hurt, the insurance pays you a standard amount for the injury and that's it. So it overall reduce the burden on the court system and the insurance self-finance itself, there's no need for profits. Quebec has the lowest cost car insurance in Canada (and may be North America?)
  - MereInterest 6y ago
    Oh, interesting. I expect this is also easier in a country with single-payer health care. In the US, the majority of the cost of car insurance is for long-term medical care that may be needed after a crash.
  - andylynch 6y ago
    NZ does the same thing for accident insurance of all kinds. Not perfect but generally works really well. The insurer does a huge about of work in accident prevention and even covers visitors accident, even ones like ski injuries. Makes it really easy to do sport there and great for public health as a result.
  - eru 6y ago
    > So it overall reduce the burden on the court system and the insurance self-finance itself, there's no need for profits. Profit is seldom a significant part of costs. Slate Star Codex went into that quite a bit in the context of healthcare. Cost explosions usually come when controls on costs are missing. Competition can be one way to control costs, but it's not the only one. Eg tap water in most places or the Quebec insurance you mention are low cost, too.
- eru 6y ago
  I have no idea what the comment you replied to had to complain about. However: an industry being heavily regulated often means that it's not well run for the customers. Just the opposite. The insurance arrangements in global shipping are likely under lighter regulation than most countries' car insurance. Btw, in general insurance doesn't have to work on the basis of formal averaging. Averaging can just be a useful and simple shortcut in certain situations (or when the law requires it). But in principle, each individual insurance contract is an independent bet and can be valued individually. Goldman Sachs or someone at Lloyds will be happy to sell you insurance for arbitrary one-off risks, as long as you are happy to pay them enough. See eg Warren Buffett's March Madness competition https://bleacherreport.com/articles/1931210-warren-buffet-will-pay-1-billion-to-fan-with-perfect-march-madness-bracket https://bleacherreport.com/articles/1931210-warren-buffet-wi... In essence, if you could have predicted enough basketball results, Warren Buffett would have given you a billion dollars. That was a special, one-off risks to Warren Buffett if every there was one. But it's rather simple to price and write an insurance contract for.
wukerplank 6y ago
But with cars it's different as the individuals are responsible for their action. Not some shipping company. Why should I pay for reckless/drunk drivers?
- tshaddox 6y ago
  Car insurance plans often cover a lot more than just the driver’s own actions and mistakes. Common line items are insurance for personal injury and property damage caused by other uninsured drivers (because good luck getting your medical bills paid by garnishing the other person’s wages), and damage from weather, natural disasters, falling objects, animals, and vandalism.
  - Scoundreller 6y ago
    When I ran my quotes, about 3/4 of the premium was for liability. The rest (fire; theft, fixing my car if it was my own fault, hail, etc) made up the balance. My car is worth $4k tops, so I cancelled the rest. The odds of a total loss are low, so a $500 or $1k deductible combined with the likely scenario of a $2k-$3k repair bill made it very meh to bother paying another $400/yr for.
    - imtringued 6y ago
      You still need insurance for liability.
      - Scoundreller 6y ago
        Depends on the jurisdiction and its enforcement. And even where it is, most states have minimum requirements that haven’t been updated in decades. https://drivinglaws.aaa.com/tag/liability-laws/ https://drivinglaws.aaa.com/tag/liability-laws/ That person that runs you over may legally only have $25k in insurance to cover your death. Your estate will have to go after their non-estate of debts>assets to get any more. But in mine, it’s much better to have have insurance than not, and the minimum coverage is $200k at least.
    - 6y ago
bartvk 6y ago
I'm part of an organization called CommonEasy that does this with sickness insurance. The group is a couple of hundred people that basically self-insure for up to two years of income loss. Ten bucks a month is for the organization, the rest is put in a savings fund. Should you leave, you take your savings with you.
- webmaven 6y ago
  > I'm part of an organization called CommonEasy that does this with sickness insurance. The group is a couple of hundred people that basically self-insure for up to two years of income loss. Ten bucks a month is for the organization, the rest is put in a savings fund. Should you leave, you take your savings with you. Huh, that's an interesting combination. Should you need to make a claim, does it come out of your own savings first before the group coverage starts?
rand49an 6y ago
That's just self insurance, legal in most places with a few requirements. Most large car hire companies practice it.
cardiffspaceman 6y ago
What about insurance fraud? A container isn't going to jump off the ship so that it can collect from the others.
golergka 6y ago
You sign a contract with a shipping company, and you can choose not to sign it. Can you choose not to use a country's road system?

judge2020 6y ago

Can you describe what exactly is wrong about the current car insurance industry? It sounds like this is exactly how car insurance currently works and it's a very regulated industry, perhaps only behind the financial industry and car manufacturing itself.

Trias11 6y ago
In the true market "ship" model you'd pay 1/10 of what you're paying now. In the government enforced model you're overpaying 10x+ fold.
- speedgoose 6y ago
  I don't understand. My car insurance is run by a mutual organization and they don't collect 10 times more money for no reasons. If you reduce the income of the insurance, who is paying ?
  - Scoundreller 6y ago
    Maybe OP is suggesting there’s a lot of fraudulent claims in auto insurance, or poor driving/maintenance practices that lead to more claims. When your insurance company has a lot of customers, you don’t care about your big claim’s contribution to rate increases because it will be pennies/month. (Yes, I understand your rates can go up if you’re at fault, but you can also stop driving, drive without insurance (in some places) or reduce your policy). While this ship has thousands of containers, they probably run through a handful of shipping agents that won’t be in business for long if they make fraudulent claims.
    - imtringued 6y ago
      I don't know how insurances work outside of Germany but processing insurance claims is the only thing where insurances can lose money so they will reward you for good driving/maintenance practices with lower fees. If you run a insurance company your goal is basically to become redundant. The best case scenario is to collect a monthly fee but never pay out any insurance claims. Fraudulent claims are pure losses so there is already a strong business incentive to avoid those.
      - Scoundreller 6y ago
        I guess your tow truck drivers are more respectable than ours that cloned police’s pricey “encrypted” radios to get to accidents faster, charged insurecos hundreds for the tow, would add damage to cars and bring them to sketchy repair shops: https://nationalpost.com/news/toronto-cop-part-of-organized-crime-group-involved-in-vicious-tow-truck-wars-chief-says https://nationalpost.com/news/toronto-cop-part-of-organized-... For some reason, health care expenses related to motor vehicle accidents are paid by the at-fault’s insurer instead of the public health system, so there’s lots of fraud there too. And more product for insurers to sell. Since the at-fault insurer pays, there’s a lot of incentive for fraud for the “victim”. Some call it the auto-lotto. Because we created lots of arbitrary fault-determination rules so insurers can’t fight eachother to assign fault, it’s not difficult to stage an accident where someone else is at-fault.
        iso1631 6y ago
        > I guess your tow truck drivers are more respectable than ours that cloned police’s pricey “encrypted” radios to get to accidents faster, charged insurecos hundreds for the tow, would add damage to cars and bring them to sketchy repair shops: In my country the insurance company has a list of approved garages and sets the price. Nobody is going to pay a tow truck for preemtively moving a car, they might arrest them for taking without consent. If a car really needs a tow for safety purposes, the police will organise that based on their pre-existing contracts and paid for a known price (by the insurance company, or the car owner) If the car is abandoned the council will eventually shift it and claim the cost back as littering If the car is safe though it's upto the owner to contact their insurance company and arrange for them to come out and shift it. Multiple companies racing to the scene sounds like something from the 1800s with fire brigades sabotaging each other.
- billylindeman 6y ago
  There's significant counterparty risk in that model. What happens when there is an incident and people don't have the money to pay up?
  - eru 6y ago
    You seize their cargo.
    - billylindeman 6y ago
      You seize the lost 1800 containers?
      - eru 6y ago
        The people who lost containers get paid compensation. If they don't want it, the shipping company doesn't care. The people who didn't lose containers are the ones who have to pay up their share of the losses. If they don't pay, you seize their cargo.
- Retric 6y ago
  Car insurance is an extremely competitive market which is the opposite of a monopoly. Food is also ‘mandated’ by basic biology but still ends up being available for cheap.
  - sushshshsh 6y ago
    Yeah, $50 a month for liability insurance always felt like a really fair deal to me. Pleasantly tolerable fee for a day where my car hits black ice and physics takes the wheel
    - metaphor 6y ago
      > Pleasantly tolerable fee for a day where my car hits black ice and physics takes the wheel Hope that day doesn't come because, ironically, liability won't cover your losses. It may, in full or part, cover the incidental loss of others impacted, but not your own.
      - gambiting 6y ago
        What do you mean? In the EU every car insurance has to cover minimum 1 million euro in personal liability and 5 million in 3rd party liability. My own with Aviva covers 5 million euro for personal and 20 million for 3rd party. But car insurance typically doesn't pay healthcare bills since healthcare is nationalized, so it's very hard to imagine how payouts would be anywhere near those sums. You'd need to crash into multiple buggati veyrons to get close to the maximum liability limit. I'm paying £400/year.
        dmurray 6y ago
        > In the EU every car insurance has to cover minimum 1 million euro in personal liability and 5 million in 3rd party liability. Source on this? I've always understood you only needed third party insurance, and the EU website [0] seems to back this up. > it's very hard to imagine how payouts would be anywhere near those sums. If you kill someone or permanently incapacitate them, you could be on the hook for their lifetime loss of earnings. Here's [1] a family being awarded €650,000 following the death of their mother. Agreed, it's still hard to rack up €20 million and I don't know what the precedent is if you run over a billionaire, but in theory I believe the payout here is uncapped. [0] https://europa.eu/youreurope/citizens/vehicles/insurance/validity/index_en.htm https://europa.eu/youreurope/citizens/vehicles/insurance/val... [1] https://www.personalinjuryireland.ie/news/fatal-car-crash-injury-compensation/ https://www.personalinjuryireland.ie/news/fatal-car-crash-in...
jeromegv 6y ago
Quebec has quite an interesting system. Everyone must pay in the same national car insurance. You are unable to sue anyone for what happened to you on the road, if you get hurt, the insurance pays you a standard amount for the injury and that's it. So it overall reduce the burden on the court system and the insurance self-finance itself, there's no need for profits. Quebec has the lowest cost car insurance in Canada (and may be North America?)
- MereInterest 6y ago
  Oh, interesting. I expect this is also easier in a country with single-payer health care. In the US, the majority of the cost of car insurance is for long-term medical care that may be needed after a crash.
- andylynch 6y ago
  NZ does the same thing for accident insurance of all kinds. Not perfect but generally works really well. The insurer does a huge about of work in accident prevention and even covers visitors accident, even ones like ski injuries. Makes it really easy to do sport there and great for public health as a result.
- eru 6y ago
  > So it overall reduce the burden on the court system and the insurance self-finance itself, there's no need for profits. Profit is seldom a significant part of costs. Slate Star Codex went into that quite a bit in the context of healthcare. Cost explosions usually come when controls on costs are missing. Competition can be one way to control costs, but it's not the only one. Eg tap water in most places or the Quebec insurance you mention are low cost, too.
eru 6y ago
I have no idea what the comment you replied to had to complain about. However: an industry being heavily regulated often means that it's not well run for the customers. Just the opposite. The insurance arrangements in global shipping are likely under lighter regulation than most countries' car insurance. Btw, in general insurance doesn't have to work on the basis of formal averaging. Averaging can just be a useful and simple shortcut in certain situations (or when the law requires it). But in principle, each individual insurance contract is an independent bet and can be valued individually. Goldman Sachs or someone at Lloyds will be happy to sell you insurance for arbitrary one-off risks, as long as you are happy to pay them enough. See eg Warren Buffett's March Madness competition https://bleacherreport.com/articles/1931210-warren-buffet-will-pay-1-billion-to-fan-with-perfect-march-madness-bracket https://bleacherreport.com/articles/1931210-warren-buffet-wi... In essence, if you could have predicted enough basketball results, Warren Buffett would have given you a billion dollars. That was a special, one-off risks to Warren Buffett if every there was one. But it's rather simple to price and write an insurance contract for.

wukerplank 6y ago

But with cars it's different as the individuals are responsible for their action. Not some shipping company. Why should I pay for reckless/drunk drivers?

tshaddox 6y ago
Car insurance plans often cover a lot more than just the driver’s own actions and mistakes. Common line items are insurance for personal injury and property damage caused by other uninsured drivers (because good luck getting your medical bills paid by garnishing the other person’s wages), and damage from weather, natural disasters, falling objects, animals, and vandalism.
- Scoundreller 6y ago
  When I ran my quotes, about 3/4 of the premium was for liability. The rest (fire; theft, fixing my car if it was my own fault, hail, etc) made up the balance. My car is worth $4k tops, so I cancelled the rest. The odds of a total loss are low, so a $500 or $1k deductible combined with the likely scenario of a $2k-$3k repair bill made it very meh to bother paying another $400/yr for.
  - imtringued 6y ago
    You still need insurance for liability.
    - Scoundreller 6y ago
      Depends on the jurisdiction and its enforcement. And even where it is, most states have minimum requirements that haven’t been updated in decades. https://drivinglaws.aaa.com/tag/liability-laws/ https://drivinglaws.aaa.com/tag/liability-laws/ That person that runs you over may legally only have $25k in insurance to cover your death. Your estate will have to go after their non-estate of debts>assets to get any more. But in mine, it’s much better to have have insurance than not, and the minimum coverage is $200k at least.
  - 6y ago

bartvk 6y ago

I'm part of an organization called CommonEasy that does this with sickness insurance. The group is a couple of hundred people that basically self-insure for up to two years of income loss. Ten bucks a month is for the organization, the rest is put in a savings fund. Should you leave, you take your savings with you.

webmaven 6y ago
> I'm part of an organization called CommonEasy that does this with sickness insurance. The group is a couple of hundred people that basically self-insure for up to two years of income loss. Ten bucks a month is for the organization, the rest is put in a savings fund. Should you leave, you take your savings with you. Huh, that's an interesting combination. Should you need to make a claim, does it come out of your own savings first before the group coverage starts?

rand49an 6y ago

That's just self insurance, legal in most places with a few requirements. Most large car hire companies practice it.

cardiffspaceman 6y ago

What about insurance fraud? A container isn't going to jump off the ship so that it can collect from the others.

golergka 6y ago

You sign a contract with a shipping company, and you can choose not to sign it. Can you choose not to use a country's road system?