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Insurance is based on the cars you may hit that are not your own. Prices have been going up. So not surprised.

dylan604 3y ago
The price to repair cars are also going up which is making the payout claims cutting into profit margins. So the solution is obvious
seanmcdirmid 3y ago
Liability insurance is based on other people’s cars. Comprehensive and collision is based on your own car.
- xapata 3y ago
  Liability is more about medical costs, no? If it were bounded to vehicle cost, I'd self-insure.
  - seanmcdirmid 3y ago
    I’m sure car insurers pay out significantly more for vehicle damage than person damage. Most accidents don’t involve harm, but body shops are getting expensive. For WA: > In 2019, there were 45,524 reported car accidents in Washington State. Although 32,106 resulted in no injuries, 325 were fatal and 973 resulted in serious injuries. https://www.weierlaw.com/dealing-with-an-auto-accident-in-washington-state/#:~:text=Washington%20State%20Car%20Accident%20Statistics,973%20resulted%20in%20serious%20injuries https://www.weierlaw.com/dealing-with-an-auto-accident-in-wa....
    - bombcar 3y ago
      The first dollar of insurance coverage is the most expensive, because any claim hits it. Going from $100k to $2m is often quite cheap, comparatively.
      - seanmcdirmid 3y ago
        The number of claims over $100k are much less frequent, which is why it is cheaper to raise your cap.
      - xapata 3y ago
        It seems like the ideal plan is a high-deductible with no maximum, like catastrophic medical coverage.
    - xapata 3y ago
      I'd bet that the median claim is quite different than the mean claim, because the outliers are so large. Much like the "shocking" statements you hear about wealth distribution -- the largest 10 are bigger than the bottom 50% or similar. That's how log-normal distributions work. Though of course the Gini coefficient can vary.
  - Marsymars 3y ago
    I've wondered what happens if I have an at-fault collision where I total a hypercar whose value exceeds my maxed-out $2 million liability coverage. Can the car owner come after me for the difference?
    - toast0 3y ago
      Yes, you're ultimately liable for damages you cause. I would expect your insurance to ask the damaged party to release you from further liability as a condition of accepting settlement at the coverage limits, but if the damages are significantly over the coverage limits and it seems likely that they could significantly collect on a judgement beyond your coverage, it's a possibility. Umbrella insurance can go up to much higher limits ($2M is maybe already be an umbrella policy), sometimes up to $10M is easy to get, and depending on your insurer, often the upper millions are much less expensive. The tail risk is pretty small. If you're worried about it, may as well ask for quotes at $5M and $10M.
- Scoundreller 3y ago
  > Liability insurance is based on other people’s cars. This is what I dislike about insurance. If someone hits my (hypothetical) $100k car and ruins it, I win $100k, but if someone hits my $1k car, I only win $1k. Yet the person that hit me did precisely the same action/error.
  - lotsofpulp 3y ago
    Insurance is not a punitive fine or lottery. If someone drives into your house and causes $100k in damage, you would also get $100k (assuming the minimum legal coverage is that high, which it might very well not be in many or even all states). I specifically recall New Jersey letting poorer people drive “insured” by letting them purchase insurance for effectively fender benders, and if they caused more damage, good luck pursuing them.
    - Scoundreller 3y ago
      > Insurance is not a punitive fine or lottery It functions as one, regardless of intentions. You could also look at this the other way: the person driving the rust-bucket with 0 functioning airbags might win more injury compensation than the individual driving something solid with 9 airbags and walks away.
      - Horffupolde 3y ago
        That’s called moral hazard.
  - vkou 3y ago
    The point of insurance is to make you whole, not to make you better off. If it did, you'd have more incentives for insurance fraud. (Also it's the other guy's insurance that pays for it, and if the insurance industry disappeared overnight, and you had to sue for damages directly, no judge would award you more than the damages you sustained. (For an honest accident.))
  - eiderman 3y ago
    A big problem at the lower end is that insurance companies don't value cars based on their utility. I have a well maintained older car that is reliable and I trust the work that has been done, but it would be valued at around $2k by insurance. In order to buy a car with similar reliability would be closer to $5k. If someone else hits my car, it will be probably totaled at current repair prices and so I will have lost ~$3k.
- SoftTalker 3y ago
  It's based on a whole lot of things. Drivers of Ford Mustangs may be involved in more accidents than drivers of Toyota Corollas. The number of miles you drive, and for what purpose, and your personal accident history, and your age and sex and marital status and whether you live in an area with snow and ice in the wintertime or not, all factor in to the rate you are charged.
akira2501 3y ago
Insurance is based on the coverage I purchase. Are you saying the insurance company is instead selling me an unlimited amount of liability based on the price of _other_ cars and not the $50k of coverage that I selected when I bought the policy? How is that justified? $50k is $50k.
- mattkrause 3y ago
  Perhaps it would make more sense to think of it as buying “up to $50k”;they’re certainly not paying out the whole amount every time. If more expensive cars leads to more expensive claims on average, the price of insurance might reasonably go up even if the worst-case exposure is the same…
  - Ekaros 3y ago
    I wonder if the spike in prices of used cars have also affected this. If average "book value" of car has gone up, then the write off cost has also gone up substantially. So cars might be same, but their value is now substantially higher, while still being under the 50k.
    - Scoundreller 3y ago
      Used cars went up in value because new cars went up in value. There's no sudden interest in driving used.
  - akira2501 3y ago
    It does somewhat but that coverage also extends to medical injuries that I may cause. Those costs have been skyrocketing for years without seeming like they made a similar impact in insurance prices. I guess underwriting is less a game of building an appropriate liability shield but undercutting that liability shield as much as is profitable without at the same time bringing the company into insolvency. I had always wished the idea of "open source" would have translated to some of these industries. Particularly given the level of technology available, instead of making the system easier to use and more transparent, they've made the easier to manipulate while blinding the consumer to any part of the process.

The price to repair cars are also going up which is making the payout claims cutting into profit margins. So the solution is obvious

seanmcdirmid 3y ago

Liability insurance is based on other people’s cars. Comprehensive and collision is based on your own car.

xapata 3y ago
Liability is more about medical costs, no? If it were bounded to vehicle cost, I'd self-insure.
- seanmcdirmid 3y ago
  I’m sure car insurers pay out significantly more for vehicle damage than person damage. Most accidents don’t involve harm, but body shops are getting expensive. For WA: > In 2019, there were 45,524 reported car accidents in Washington State. Although 32,106 resulted in no injuries, 325 were fatal and 973 resulted in serious injuries. https://www.weierlaw.com/dealing-with-an-auto-accident-in-washington-state/#:~:text=Washington%20State%20Car%20Accident%20Statistics,973%20resulted%20in%20serious%20injuries https://www.weierlaw.com/dealing-with-an-auto-accident-in-wa....
  - bombcar 3y ago
    The first dollar of insurance coverage is the most expensive, because any claim hits it. Going from $100k to $2m is often quite cheap, comparatively.
    - seanmcdirmid 3y ago
      The number of claims over $100k are much less frequent, which is why it is cheaper to raise your cap.
    - xapata 3y ago
      It seems like the ideal plan is a high-deductible with no maximum, like catastrophic medical coverage.
  - xapata 3y ago
    I'd bet that the median claim is quite different than the mean claim, because the outliers are so large. Much like the "shocking" statements you hear about wealth distribution -- the largest 10 are bigger than the bottom 50% or similar. That's how log-normal distributions work. Though of course the Gini coefficient can vary.
- Marsymars 3y ago
  I've wondered what happens if I have an at-fault collision where I total a hypercar whose value exceeds my maxed-out $2 million liability coverage. Can the car owner come after me for the difference?
  - toast0 3y ago
    Yes, you're ultimately liable for damages you cause. I would expect your insurance to ask the damaged party to release you from further liability as a condition of accepting settlement at the coverage limits, but if the damages are significantly over the coverage limits and it seems likely that they could significantly collect on a judgement beyond your coverage, it's a possibility. Umbrella insurance can go up to much higher limits ($2M is maybe already be an umbrella policy), sometimes up to $10M is easy to get, and depending on your insurer, often the upper millions are much less expensive. The tail risk is pretty small. If you're worried about it, may as well ask for quotes at $5M and $10M.
Scoundreller 3y ago
> Liability insurance is based on other people’s cars. This is what I dislike about insurance. If someone hits my (hypothetical) $100k car and ruins it, I win $100k, but if someone hits my $1k car, I only win $1k. Yet the person that hit me did precisely the same action/error.
- lotsofpulp 3y ago
  Insurance is not a punitive fine or lottery. If someone drives into your house and causes $100k in damage, you would also get $100k (assuming the minimum legal coverage is that high, which it might very well not be in many or even all states). I specifically recall New Jersey letting poorer people drive “insured” by letting them purchase insurance for effectively fender benders, and if they caused more damage, good luck pursuing them.
  - Scoundreller 3y ago
    > Insurance is not a punitive fine or lottery It functions as one, regardless of intentions. You could also look at this the other way: the person driving the rust-bucket with 0 functioning airbags might win more injury compensation than the individual driving something solid with 9 airbags and walks away.
    - Horffupolde 3y ago
      That’s called moral hazard.
- vkou 3y ago
  The point of insurance is to make you whole, not to make you better off. If it did, you'd have more incentives for insurance fraud. (Also it's the other guy's insurance that pays for it, and if the insurance industry disappeared overnight, and you had to sue for damages directly, no judge would award you more than the damages you sustained. (For an honest accident.))
- eiderman 3y ago
  A big problem at the lower end is that insurance companies don't value cars based on their utility. I have a well maintained older car that is reliable and I trust the work that has been done, but it would be valued at around $2k by insurance. In order to buy a car with similar reliability would be closer to $5k. If someone else hits my car, it will be probably totaled at current repair prices and so I will have lost ~$3k.
SoftTalker 3y ago
It's based on a whole lot of things. Drivers of Ford Mustangs may be involved in more accidents than drivers of Toyota Corollas. The number of miles you drive, and for what purpose, and your personal accident history, and your age and sex and marital status and whether you live in an area with snow and ice in the wintertime or not, all factor in to the rate you are charged.

akira2501 3y ago

Insurance is based on the coverage I purchase. Are you saying the insurance company is instead selling me an unlimited amount of liability based on the price of _other_ cars and not the $50k of coverage that I selected when I bought the policy? How is that justified? $50k is $50k.

mattkrause 3y ago
Perhaps it would make more sense to think of it as buying “up to $50k”;they’re certainly not paying out the whole amount every time. If more expensive cars leads to more expensive claims on average, the price of insurance might reasonably go up even if the worst-case exposure is the same…
- Ekaros 3y ago
  I wonder if the spike in prices of used cars have also affected this. If average "book value" of car has gone up, then the write off cost has also gone up substantially. So cars might be same, but their value is now substantially higher, while still being under the 50k.
  - Scoundreller 3y ago
    Used cars went up in value because new cars went up in value. There's no sudden interest in driving used.
- akira2501 3y ago
  It does somewhat but that coverage also extends to medical injuries that I may cause. Those costs have been skyrocketing for years without seeming like they made a similar impact in insurance prices. I guess underwriting is less a game of building an appropriate liability shield but undercutting that liability shield as much as is profitable without at the same time bringing the company into insolvency. I had always wished the idea of "open source" would have translated to some of these industries. Particularly given the level of technology available, instead of making the system easier to use and more transparent, they've made the easier to manipulate while blinding the consumer to any part of the process.