Monday, November 07, 2005

Baby, You Can Can't Insure My Car

The ongoing battle over car insurance rates in Massachusetts is heating up once again. For those of you unfamiliar with the fantastic auto insurance system we have here, it goes like this.

In a nutshell, the insurance rates paid by Massachusetts drivers are determined by the State Insurance Commission, a bunch of politically-connected hacks who get countless dollars funneled into the state's coffers through a select number of insurance carriers who "choose" to do business in the Bay State. Wanna call Geico and save hundreds on your car insurance? Not in Massachusetts you can't. Sorry, suckers.

And, the impetus behind this draconian scheme? Providing affordable (read: taxpayer-funded) car insurance for at-risk (read: bad) drivers, whose rates would go up dramatically if they actually had to purchase insurance under a free market (read: American) system.

Governor Romney, naturally, is calling for the system to be reformed to open up the market to other carriers. To no surprise, this plan is being frowned upon by the insurance companies who are enjoying a monopolistic grip on the car insurance business in the Commonwealth. These insurance companies have started running a series of radio ads designed to scare the uninformed into maintaining the status quo where good drivers (the evil rich) will continue to be forced to subsidize the state's bad drivers (downtrodden victims of society).

My personal favorite soundbite from these ads is where they express their opposition to reform saying it will lead to insurance companies charging any rates they want.

What they fully realize, though, is that that's the very system we have in place now, only it's being implemented under the authority of the state without the notion of free-market competition in play anywhere in the equation.

And their group's moniker? The Massachusetts Coalition for Affordable Auto Insurance for All

If that name doesn't raise red flags all over the fucking place, you have not been paying attention.

Their website?

(waits for waves of laughter to subside)

How weak is their overall message? Let's see how they "refute" the claim that good drivers in Massachusetts are being forced to subsidize the insurance coverage of the state's at-risk drivers. They attempt to do just this on their "blog".

(again, waits for laughter to subside)

Deceptive Advertising
09/28/2005, 10:13 AM

The Massachusetts Insurance Federation recently launched tv and radio spots touting "Good Driver Pay More, Bad Drivers Pay Less." The ads paints an overly simplistic scenario that if you are a good driver in Massachusetts, you are paying for the mistakes of bad drivers. Yesterday's Boston Globe set the record straight:

    Despite what the ads claim, all Massachusetts drivers do not pay the same rate for auto insurance, but all companies operating here charge the same state-set rates, which are among the highest in the nation.

    Good drivers also don't subsidize bad drivers, at least directly. A study commissioned by the state last year found that suburban, rural, and experienced drivers (86 percent of the state's drivers) pay about $100 more per policy so urban and inexperienced drivers (about 14 percent of the state's drivers) pay about $500 less than their risk would indicate.

Wait a minute. Whose side are they arguing for here?

I mean, God forbid drivers should be charged for car insurance based on their risk categories! What's next, charging non-smokers more for life insurance so that people smoking themselves to death on a five pack-a-day habit won't have to dip into their cigarette money to purchase life insurance?

Socialism's working wonders on the double-digit unemployment French economy these days. No wonder they want to bring more of that magic home to Massachusetts. Fucking retards.

Crunching the Numbers

OK, let's take a look at who's subsidizing whom here. Using this number of 4.4 million licensed drivers in the Commonwealth, and the study referenced above, we find the good drivers in Massachusetts are kicking an extra $378 million into the kitty to provide a $308 million discount to at-risk drivers.

That leaves an extra $70 million for greasing palms throughout the Commonwealth.

I guess it all depends on your definition of the word "truth". Welcome to Massachusetts.

Additional reading:

More fairness to good drivers
Let market set auto insurance rates