Is car insurance fair?

Financial Answer Guy

Actually, you hit upon the core concept of any insurance. That is this: Everyone puts a small amount into a pool of assets so that if anyone in that group suffers a loss they don't have to pay for it alone.

While it may seem inherently unfair that you (presumedly a good driver) have to pay for insurancewhile a bad driver must do the same, what you are paying for is the right to transfer the risk of suffering a financial loss due to an accident to the insurance company.

Try to take comfort in two thoughts. First, if you do have an accident, you're covered. Remember, it isn't just bad drivers that have accidents (or have their car stolen or vandalized, etc.). Secondly, rest assured that the bad drivers will eventually get the bad rates, and will have to contribute much more to that pool of assets than you do.

kirun

After pulling out a policy at random, I found this clause under "what is not covered" - "liability for more than Â£20,000,000 for any claim or series of claims", in other words, a typical policy covers you for 20 million pounds of third party liability.

If you have 20 million pounds you're willing to loan to an insurance company, in exchange for "free" car insurance, that's fine. If you want to buy a "third party only" policy, and stick your savings in the bank, that's also fine. If insurance companies were required to pay back premiums on policies that weren't claimed on, expect the deposits to be insanely high, otherwise they simply can't magic up the money to pay out the ones that are.

[according to xe.com, 20,000,000.00 GBP = 34,875,480.88 USD]

OSAMA W. BUSH

I HATE INSURANCE COMPANIES!! THEY ARE THE ONES THAT BRIBED THE LEGISLATORS INTO FORCING US TO BUY THEIR OVER PRICED INSURANCE!!

Bear

I agree with you, but what can we do?

tropicaldazed

The Mafia is more reputable!!!!!

Paul

In California, a few years back, (60's and 70's) you could deposit 25,000. with (I think) the DMV and not carry ins.

If it's still true today, it's probably more like $100,000.
It was called the financial responsibility law.

OH, to answer your question: NO IT'S NOT FAIR!!!!!!!

If you file a claim, they raise your rates and get their money back. I got MY rates raised because my daughter crashed, and she was on my policy. Not making THAT mistake again.

YA is a sham

What's most unfair is that some drive without insurance, get in accidents, and cause everyone else to have to pay more for it. If you cause an accident, YOUR rate will increase, not mine.
Driving is not a right but a privilege, insurance is one price we have to pay for it

herodavidxx

unfortunatly in this world, you cannot trust very easily. An insurance company has to exist for that very reason. If someone hits you, you know that you will not have to pay the bill. Same goes for joe shmow who's driving down the road from you, he knows that if you hit him, he's covered.

It is also the law that all motor vehicles that operate on public roads must be insured. So in fact it is not the insurance companies that are to blame, it is your government.

Also on another note, you do not pay for bad drivers. In fact the insurance companies even gives discounts to good drivers who have been accident free.

scurl56

My mom always told me life isn't fair.

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