News article wording

[roup42]

The wording in this article from the Times really goaded me. Not that it surprised me in the least. It's consistent with how the issues are always presented.

A study last year by Consumers Union noted that a woman with 22 years of driving experience and a good record, residing in predominantly white Westchester, would pay $1,443 a year with

Comments

[fastlearner]

I certainly appreciate the concept of some neighborhoods being more likely to cost the insurance companies more than others, but that fact doesn't mean they have to rate by territory. Costs and risk can certainly be averaged out over all neighborhoods. Yes, it "punishes" those in safer neighborhoods, but hey, so do the idiots in any neighborhood.

Why is it so obvious that insurance companies have to rate by territory, again?

[roup42]

If there's no law against it, and Company A doesn't differentiate, they are adversley selected against. Let's say that (ignoring expenses and profit) suburban drivers cost $5 a year to insure and urban drivers cost $10. There are even numbers of both. Company A doest differentiate and charges $7.50 for it's insurance. Company B differentiates and charges $5 for suburban drivers and $10 for urban. All the surburban drivers will buy their insurance from company B, who will make a profit of $2.50, and all the urban drivers will buy their insurance from company A, who will lose $2.50, and soon go out of business. All the urban drivers also end up uninsured.

So the only option is to pass a law that says "You have to charge everyone in the state the same rate." Beyond the general fuck-upedness of this situation, you are making all the Suburbans subsidize all the urbans. Why are they having to do this? What also ends up happening is that you end up with Company C that happens to charge just $5, but wow, wouldn't you know it? They

[fastlearner]

I understood why one company can't just switch, but I thought you were saying that it automatically had to be that way.

Yes, it would require a law because no single company could actually survive doing it.

They "why" is simple socialism: when the underpriviledged are extra fucked simply because they're in the wrong class, spread the pain around. Which I'm fairly certain is extremely distasteful to you.

[roup42]

Well, also, as I said, because it ends up still not working. Because as it is a product sold by a voluntary, free market, what ends up happening is that the "wrong" (not the word I'd use) class ends up not being insured at all. To use our simplified example, if the state says "you can only charge one rate at all state-wide," then Suburban Insurance Company comes in and target-markets just to suburban drivers, by, for example, having affiliation marketing to members of the Pinehaven Country Club.

The government is coming in and saying "all insurers must charge the same rate," it's saying "each company much charge each customer the same rate," so in effect ends up mandating that the company cherry-pick. It fucks over the very people it's meant to help. It'd be like trying to help make sports betting "fairer" by mandating that all games must have the same point spread.

If you want to "socialize" insurance the only way to make it "workable" would be to actually socialize it and have one government-run automobile insurance carrier