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> it should be provided by the state and paid for with taxes / annual registration fees The free market is required to accurately price the risk for each drive

> it should be provided by the state and paid for with taxes / annual registration fees The free market is required to accurately price the risk for each driver. A 45 year old female driver with no infractions is much less risk than an 18 year old male with a DUI, so the former should pay less in premiums. The current system is doing that. I do not see how a state-provided solution would come up with "accurate" pricing for individuals. Some market is needed. I could see how some people (especially in high risk groups) would prefer not to pay according to their risk, but I do not agree that is better for society.

toomuchtodo 5y ago
A government entity could perform this, no free market required. See residential flood insurance for a government based risk rating example.
- asdfasgasdgasdg 5y ago
  IIUC, that is actually a form of government subsidy, which exists only because there are places that are uninsurable due to flood risk. It is politically unpopular to tell people they have to self-insure because they picked a risky to live. If we decided that were something we were willing to tell people, there'd be no issue with letting the market handle it, same as most insurances.
- seoaeu 5y ago
  You mean the same policy that resulted in a whole bunch of people living in flood zones? And which we can't get them to leave because it would be politically unpopular to raise their insurance premiums to reflect their actual risk? That seems more like an example of exactly why we don't want the government -- which inevitably means politicians -- setting insurance rates.
- nradov 5y ago
  Government provided residential flood insurance is a horrible example of moral hazard and should be eliminated. Taxpayers shouldn't have to subsidize investors who choose to purchase property in flood zones.
bobsmooth 5y ago
>The free market is required to accurately price the risk for each driver. That same market means some will decide that not having insurance is a better deal. Tying insurance to something like drivers licences increases the cost of not having insurance. >I do not see how a state-provided solution would come up with "accurate" pricing for individuals. Can the state not hire actuaries?
- gruez 5y ago
  >Can the state not hire actuaries? yes, but a sibling commenter has weighed in how it turns out: https://news.ycombinator.com/item?id=29719762 https://news.ycombinator.com/item?id=29719762
jjnoakes 5y ago
A counterpoint (not necessarily my view but a view nonetheless) would be that if everyone pays into a single required insurance pool then the risk doesn't need to be accurately determined a priori. Each individual's rates might be the same, but they could be lower overall because there are more paying in. A low risk driver may pay more than they use, but it could be less than the market rate regardless.
- refurb 5y ago
  The risk still needs to be accurately determined, even if not for each individual. If 100 people in a population will be injured and get a pay out of $100k, you need to know that to set general rates. What I’ve seen in places that have government insurance is the government is constantly trying to backstop the insurance. Why? It becomes a political hot potato when rates go up, so there is pressure to keep them down with lower premiums. The insurance body doesn’t care because the government will bail them out.
  - jjnoakes 5y ago
    You can just update rates after the fact if necessary. I don't really see the problem with that. People with a bad history may get higher rates, just not based on risk analysis but based on their actual history.
    - whatshisface 5y ago
      The only way to convert "has a DUI" into a specific rate increase is through risk analysis of everybody with DUIs.
      - jjnoakes 5y ago
        Why is that the only way? Seems to me you could just raise rates after someone caused actual damage instead.
        5y ago

toomuchtodo 5y ago

A government entity could perform this, no free market required. See residential flood insurance for a government based risk rating example.

asdfasgasdgasdg 5y ago
IIUC, that is actually a form of government subsidy, which exists only because there are places that are uninsurable due to flood risk. It is politically unpopular to tell people they have to self-insure because they picked a risky to live. If we decided that were something we were willing to tell people, there'd be no issue with letting the market handle it, same as most insurances.
seoaeu 5y ago
You mean the same policy that resulted in a whole bunch of people living in flood zones? And which we can't get them to leave because it would be politically unpopular to raise their insurance premiums to reflect their actual risk? That seems more like an example of exactly why we don't want the government -- which inevitably means politicians -- setting insurance rates.
nradov 5y ago
Government provided residential flood insurance is a horrible example of moral hazard and should be eliminated. Taxpayers shouldn't have to subsidize investors who choose to purchase property in flood zones.

bobsmooth 5y ago

>The free market is required to accurately price the risk for each driver. That same market means some will decide that not having insurance is a better deal. Tying insurance to something like drivers licences increases the cost of not having insurance. >I do not see how a state-provided solution would come up with "accurate" pricing for individuals. Can the state not hire actuaries?

gruez 5y ago
>Can the state not hire actuaries? yes, but a sibling commenter has weighed in how it turns out: https://news.ycombinator.com/item?id=29719762 https://news.ycombinator.com/item?id=29719762

jjnoakes 5y ago

A counterpoint (not necessarily my view but a view nonetheless) would be that if everyone pays into a single required insurance pool then the risk doesn't need to be accurately determined a priori. Each individual's rates might be the same, but they could be lower overall because there are more paying in. A low risk driver may pay more than they use, but it could be less than the market rate regardless.

refurb 5y ago
The risk still needs to be accurately determined, even if not for each individual. If 100 people in a population will be injured and get a pay out of $100k, you need to know that to set general rates. What I’ve seen in places that have government insurance is the government is constantly trying to backstop the insurance. Why? It becomes a political hot potato when rates go up, so there is pressure to keep them down with lower premiums. The insurance body doesn’t care because the government will bail them out.
- jjnoakes 5y ago
  You can just update rates after the fact if necessary. I don't really see the problem with that. People with a bad history may get higher rates, just not based on risk analysis but based on their actual history.
  - whatshisface 5y ago
    The only way to convert "has a DUI" into a specific rate increase is through risk analysis of everybody with DUIs.
    - jjnoakes 5y ago
      Why is that the only way? Seems to me you could just raise rates after someone caused actual damage instead.
      - 5y ago