Drivers: Don’t allow insurance companies to use speed camera data. We don’t want bad drivers to pay more.
Also drivers: Insurance premiums are too expenvie. Do something.
Governor: 🙆
Drivers: Don’t allow insurance companies to use speed camera data. We don’t want bad drivers to pay more.
Also drivers: Insurance premiums are too expenvie. Do something.
Governor: 🙆
All of that is about a company selling a product in a market.
But insurance doesn’t need to be that. It’s purpose is unrelated to any of that.
Insurance, no matter where it comes from, is about pooling money from a large group to cover the losses of a small group. It exists because nobody knows which group they’ll be in.
EDIT:
Ideally insurance would be a state regulated monopoly, in order to have the largest possible pool. That would be the most effective and efficient way of doing it.
In fact trying to categorize people into lower and higher risk pools, just makes smaller pools. Which hurts the overall efficiency of insurance for the purpose of creating more attractive products to sell in a profit driven market. It’s an example of how commerce itself can actually hurt some markets.
What you describe as an individual spreading out small payments instead of having one large payment, is actually just a loan. You can open a line of credit at a bank for emergencies. That does the same thing. It isn’t insurance.
I agree a state monopoly on insurance would probably be beneficial but that doesn’t mean we have to get rid of different rates. Riskier drivers need to pay more because they’re more likely to take money out of the system. This doesn’t mean they have to go into a higher risk pool, it could be just one big pool but balancing money in and money out fairly will require different rates. It’s unfair to charge a person who barely drives their 10 year old car the same price as a 16 year old with a Porsche, one of those people is way more likely to have an accident, and a costly one at that, and take out more money from the pool and thus get disproportionate “benefit” for the same price.
No. Pooling the resources of all to spend it on the benefit of society (including helping the less-fortunate) is the purpose of taxes.
The purpose of insurance is to trade low chance big impact risks for 100% chance small costs.
As I said, you can have insurance with just one insurer and one insuree. You cannot have taxes with 1 taxpayer and 1 tax collector, that would be called an asset manager or something, where you pay someone to decide for you what to spend that money on.
Merriam-Webster:
1 a : coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril b : the business of insuring persons or property c : the sum for which something is insured 2 : a means of guaranteeing protection or safety The contract is your insurance against price changes. Frequent hand washing is good insurance against the common cold. 3 gambling : a side bet that a player in blackjack may place when the dealer’s first faceup card is an ace
Note: An insurance bet can be up to half of a player’s original bet. It wins at 2 to 1 odds if the dealer’s cards add up to 21.