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Winnipeg Demands Immobilizers on High-Risk Cars
mytrip writes with a Reuters article about a new, unusual insurance requirement for drivers in Winnipeg, Manitoba. Apparently Winnipeg is one of the worst cities in Canada for auto thefts. New and 'high-risk' cars will now be required to install an electronic immobilizers in order to qualify for car insurance. "Chomiak said cars are stolen twice as often in Winnipeg as in other Manitoba cities, while a 2005 report from Statistics Canada said the city had a higher per-capita car theft rate than larger cities like Vancouver, Montreal and Toronto. The province, where cars are insured through Manitoba Public Insurance, will fork over C$15 million ($14 million) so that owners without immobilizers can have them installed."
How can this not be a requirement? In Australia it's been that way for ages, and all new cars have to have immobilizers fitted.
Send lawyers, guns, and money!
First thought: electronic immobilizers - why bother? Isn't the way to steal cars these days with a laptop to reprogram all the systems so that the actual think actually drives? How difficult would it be to bypass the immobilizer? Seems to me that they could spend the $14m on installing CCTV or having more police on the street.
ahem... This is the Anti-Libertarian discussion forum, right?
Well, there's also a sentence or two from the Attorney General - he thinks this will stop the devastation caused by joy-riding, but you could have guessed that.
ccalam - acoustic versions of new songs.
Has it occurred to them that putting immobilizers on some vehicles will simply mean thieves will just move on to another target?
Paying Peter to pay Paul.
It's not *that* extreme. Here in South Africa most high profile cars need to have satellite tracking devices fitted in order to qualify for car insurance.
We need those on police cruisers.
Additionally, I wonder if the crack is available online yet, if not, it probably will be soon.
What kind of an idiot is willing to pay however much per year to insure their car, but not willing to pay a measly $80 once-off for an immobiliser?
Plus, I'd much rather have my car not stolen than have an insurance company give me money when it is stolen. Especially considering the headache you have to go through in order to get it.
ALL cars in Western Australia have to have immobilizers fitted to be licensed. Been this way for over 15 years....
What's the big deal?
It's a good idea, it'll cut down on joy rides more then damage though heh, My roommates dodge minivan has been stolen twice, MPI payed for an immobilizer for him and since then (last summer) it's been broken into 4 more times. never stolen, but the little illiterate pukes break the window and bust the hell out of the steering column. Apparently they can't read all the stickers.
what we really need here is harsher penalties on these repeat offending kids, the majority of the thefts that result in fatal or serious accidents due to joyriding are done by 11-13 yr olds. they get told to not do it and released back to their useless parents.
Anyone out there familiar enough with the systems involved to describe exactly what they're trying to mandate?
Most new cars I've bought in the past 8 years or so have had systems that prevent the engine from starting if the car doesn't handshake with a microchip in the ignition key shank. (However, contrary to what some people apparently believe, they don't make the cars impossible to steal, of course.) Is this what they're talking about? I can't imagine it would be easy to retrofit one on a car that doesn't have one already, since it's a pretty integral part of the ignition system and ECU.
According to this page, there are only a few immobilizers that pass some sort of Canadian standard, but I couldn't get any information on how they work by Googling them, and they don't seem to be widespread outside of Canada. (Or actually outside the province of Manitoba at all.) The small number of approved designs combined with making them very widespread via compulsory installation seems like a recipe for disaster: if the thieves are already getting past the safeguards built into modern cars from the factory, they're not stupid; I expect it won't be long before how to bypass them becomes common knowledge. [1]
I think this is the web site of one manufacturer of approved devices, Autowatch. Basically they look like some sort of key-fob RF transponder that communicates either automatically or on-command with a receiver in the car that immobilizes it. Seems like there's a variety of attack vectors there, from just routing around the disablement device in the car, to faking the code (easy if it's a rolling-code system, harder if it's a public-key handshake). Ups the ante a little bit, and it might make thieves target older cars instead of newer ones (which doesn't strike me as an exactly socially useful outcome) or push them to neighboring provinces, but I'm pretty skeptical that it'll have much of a substantial long-term effect on crime.
[1] If I were living there I'd also be immediately and deeply suspicious of any government mandate that requires the purchase of a device from a for-profit corporation, particularly when it only gives you the choice of three corporations, and one corporation makes 3/5 approved models. Seems like a recipe for corruption to me. But then again, I don't trust government further than I can throw it. (And an insurance company run by the government? Nightmare.)
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
In fact, for profit insurance is stuck in a fundamental conflict of interest; they will be most successful by finding ways to weasel out of their obligations. Government insurance, on the other hand, is beholden to the voters, and doesn't embezzle premiums off into profit. Further, it greatly simplifies the system. If there's an accident, there's only one party to make payments, not 2 or more who will fight about who should pay what percent.
A well regulated market has many useful places in society, but financial services is not one of them.
I have a corsica thats pretty much 3 blocks to the junkyard and autopac is giving me a free immobilizer cause its a "high risk". Id rather have a kid steal it and die a pinto style death. if they just vandalise the car it will get written off anyways so it might as well get put to some good use.
Why is this front page news? Canadians have known for years that auto theft is high in Winterpeg, and there's really nothing wrong with the devices. The potential for state (as in govt) abuse is low since the RCMP has higher levels of accountability than their US counterparts. The only issue I can imagine anyone having with this is whether it's possible for a criminal to abuse.
How is this any different than requiring you to lock your car and not leave the keys in (which many insurers do)?
Look up WTF an immobilizer was. Then again i dont think i've ever driven a car built within the last 8 years.
"Sic Semper Tyrannosaurus Rex."
From the UK 'Home Office', "Since 1997, vehicle crime has fallen by 51%. Despite this, according to the British Crime Survey there were 1,731,000 vehicle crimes during 2005-06".
The downside is that if you have a high-value car, criminals now either break into your house to get the keys, or hijack you. My brother-in-law used to drive an Audi RS4, (with the BMW M5, the vehicle of choice for bank and smash and grab crimes). After the SECOND time he and his wife were threatened with knives and beaten, (in the centre of a major city each time), he replaced it with something rather more modest...
My car is its own immobilizer. No self-respecting car theif would steal a Corvair. Unsafe at any speed? Only with an idiot driver.
Most new cars come with immobilizers standard nowadays. I just looked up a base model Honda Fit, and even that has it standard. My car is from 2000 and it came standard, so this probably only applies to those high risk Civics/ Integras. Is it really worth forcing people to put $100 or so for the hardware + installation to add an immobilizer to a car worth 3 grand?
On one hand, if people are required to have insurance, this is essentially forcing them to buy a product, which doesn't seem like a fair thing for the consumers. In that respect, I want to say that maybe there is room to disagree with the decision. On the other hand, if car theft rates are so high, the only realistic options for the insurance companies is to either make people take steps to lower their risk or to raise the rates to compensate for the increased risk. In the end, it boils down to the fact that people who live in high risk areas have to bear that burden somehow, either through the cost of lowering the risk, the cost of sharing the risk, or the cost of facing the risk unprotected.
At least this way, since cars will become harder to steal, fewer people will try to steal them, and thus this is the best long term solution.
if they own one of the specified high-risk vehicles. Manitoba Public Insurance pays the entire cost in these cases, and it provides a discount on the insurance premium for any vehicle which has an immobilizer installed, as well. I mentioned this in a couple of replies, but I thought I'd put it up front because it didn't get mentioned in the article. I own one of the high-risk vehicles, and had my immobilizer put in when the program began - at first MPI payed half the install cost, but then later they reimbursed me (and everyone else) when they changed their policy to try and increase usage of these devices. This is just the latest change, designed to further increase use. It costs nothing, and it saves you money every year! On top of protecting your vehicle...
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All cars must have mandatory GPS installed starting 2008.
All old (non-diesel) cars had engine immobilizers. You popped the top off the distributor cap and took the rotor arm out. How many joy riders carried a selection of spare parts with them? Ah, the joy of analogue tech.
Maybe I'm just being a pedant, but what's this doing under IT?
/. can be hit-and-miss, but this one just seems ridiculous!
Surely better placed under either Science, Politics or YRO?
I know categorisation of new threads on
Just my $0.03 (At current exchange rates, my £0.02 is worth more than your $0.02)
Another case of Big Brother punishing victims instead of criminals.
It's supposed to be THE OTHER WAY AROUND!!!
Knowing Google's lust for data collection, the Soviet Union is still alive and well inside the psyche of Sergey Brin....
The city should NOT be getting involved... and why is there only one insurance company for that city anyway... that's weird. Is this some mandated monopoly and the others can't do business there?
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
to get it insured, and that is an old 1991 Honda Civic i-VT (SiR I believe it is called in the US).
The insurance is still 1.800$ pr year for a car I got 2 years ago for 10.000$ even though I have driven for 10 years without any accidents. (got to love the 150% tax on car I have to put up with).
Not that I am complaining, of course I could just have got a peugeot,suzuki,kia whatever if I wanted a cheap car, but try to find a 16 year old car of those brands that still runs.
"Chomiak said cars are stolen twice as often in Winnipeg as in other Manitoba cities,"
You mean there are other cities in Manitoba?
Don't make it mandatory(*). Just make it so expensive to insure your vehicle without one that the hold-outs will cave.
(*) What else would you expect in a province where you have only one legal option for auto-insurance. The crown "insurance" corporation (MPI).
There are many mutual insurance companies that are owned by and answer to the policy holders. On the other hand some mutuals (e.g. State Farm) seem to have forgotten who they work for.
I don't see the point of fitting a bunch of rusted out Dodge Relient K's with immobilizers. This will also ruin the only thing that Winnipegger's are number 1 at.
I do not insure for theft. I only have the minimum insurance required by law.
:-) More likely the crook gets pissed and smashes the car or waits around to get revenge.
My cars are rarely worth the amount of money I'd spend during the car's lifetime insuring them against theft. I drive used cars and since I do not use my car to compensate for insecurity, I have cars that are utilitarian (not desirable for theft.) Plus, if they don't take proper care of my car it wouldn't last them that long anyways. A car is a tool, like a hammer- 100 years ago people had a mentally healthy view of their transportation.
It also doesn't hurt if your car looks like shit (although minus minor rust, mine looks like a new 1992 car.)
My brother has sports carS and one day he will get into trouble when the stun-gun he builds into the stick shift kills somebody who can't take the voltage. At least its powered by a tiny battery now instead of the car battery. Its not easy to let go of the shifter when your being stunned. Yes, he forgot to turn it off a few times
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Me too, but it doesn't work that way in practice. Moving from BC (public insurance: ICBC) to Ontario (private) was a nightmare. Despite over 2million KM of safe claim-free driving and being in the statistically safe demographic (40+ 2kids stn-wgn employed), it took me almost a week (4 hrs of shopping, 20 phone calls) to find an insurer willing to sell to me, because I had an 8 month uninsured period. WTF? When I did find an insurer, it involved a couple of hours and three trips, and some invasive disclosure. Returning to BC, it was a 20 minute transaction with no hassle or hesitation, and I no longer disparage ICBC.
The bottom line is that insurance, being a regulated requirement, should be a government service with accountability, because private industry doesn't serve the public interest very well. If I'm required to contract a industry they must be require to contract me.
Lifelong transactions requiring ethics from users like auto insurance, health, etc. should not be scattered over various databases and across various ethical frameworks. The inverse also applies: government should stay out of short term transactions and moral restrictions.
Damn those pesky terrorists
Putting an immobilizer on all Accords and Civics is stupid. Any given Civic is not at high risk for theft. On the other hand, any given Cadillac Escalade is at high risk for theft and is an expensive insurance payout. It would make more fiscal sense to put lo-jack transponders on Escalades than to put immobilizers on Civics.
Although the Civic is always near the top of the list of most stolen cars, it makes it there for two reasons; it is popular and cheap. By being popular, if cars were stolen based on opportunity rather than selected by value, Civics would naturally float to the tops of the list. By being cheap, it is more likely to be parked in dangerous neighborhoods and more likely to not be in a garage. Both significantly raise the chance of theft.
It would make a whole lot more sense to use location rather than make and model to decide which cars to fit with immobilizers. I hate these "most stolen" lists because they almost always read exactly like a "most units registered" list and don't give anyone any real indication of whether their car is going to be stolen. A better list would be a "theft rate", or what percentage of the total unit registered have been stolen. Every single year the most stolen list comes out and every statistician in the country has a small stroke.
Another problem is that immobilizers slightly raise the risk of a prospective thief breaking into the house for the keys or taking the car from the owner at gunpoint.
Government insurance programs do charge higher risk drivers more. They don't have to make a profit, but the government doesn't like to take a loss either. Government insurance costs less on average, and it's been proven so in Canada.
But not others. "Free" markets do not exist in any civilized context, and aren't of much use for anything. Well regulated markets can often outperform command economies, and they should be utilized in those cases. Where command economies outperform markets, command economies should be used.
Roads, emergency services/health services, public utitlites and education are some things that don't fair very well in a market. Dogmatic insistence on one system for everything is asinine, and is about as sensible as driving in a nail with a screwdriver.
If you can afford a high risk car, then just suck it up and buy another one. If you can't then don't be an idiot and go out on a limb to impress people with shittier cars.
Under a government run insurance program, there is a single responsible party. Hit by someone without insurance? The government insurance agency is still responsible. The stingyness of the agency is set by public choice through democracy, which is far more efficient than market choice.
The market has no input on who I get in an accident with.
While I don't dispute those cars are the most stolen in the USA, you obviously know nothing about Winnipeg!
The joy riding comment is correct in the Winnipeg context.
Top 10 stolen cars
1. Dodge Caravan, 1990-94
2. Plymouth Voyager, 1990-94
3. Chrysler Intrepid, 1990-94
4. Jeep Grand Cherokee, 1990-94
5. Plymouth Acclaim, 1990-94
6. Chrysler Intrepid, 1995-99
7. Dodge Spirit, 1990-94
8. Chrysler Dynasty, 1990-94
9. Pontiac Firebird, 1985-89
10. Dodge Power Ram 1500, 1995-99
I will refrain from explaining the real cause of higher than normal car theft in Winnipeg, those who live there know why.
The problem is that running an insurance service involves many short term transactions, and the lack of competition in a gov't service breeds inefficiency (I hear magical things about how well the gov't works in BC, but I'll eat my hat if the same system worked in the United States). On the other hand, you raise a good point that if a gov't mandates a service, private providers can leave you high and dry, since they must mind their bottom lines.
In the US, there is a provision called SR-22 to help fill the gap; moreover, there is no recognized right to operate a motor vehicle, even roads are paid with taxes (thus justifying licensing and insurance mandates). Finally, being uninsured during any stretch while owning a vehicle registered for normal operation is indeed a bad sign to prospective insurers.
I think the Swiss healthcare model is an excellent example of the union between public policy and private providers. Perhaps something comparable could be devised for auto insurance.
I use credit unions.
Maybe since we're talking about immobilizers, we can extend that to requiring intoxalyzers in cars.
I mean, we (in the US) already require people applying for driver licenses to give up certain rights as a prerequisite for the privilege to drive, why not make cares harder to steal and harder to drive while drunk?
We've legislated against private property owners with respect to tobacco use, we've made it illegal (in some places) to sell food with trans-fats and all this in the name of "public health".
Last time I checked, drunk drivers injured and killed many more people than either trans fats or second-hand tobacco smoke.
Heck, without cops having to dedicate so many resources to fighting DUI, they could be out serving the community in other ways.
Sorry to hijack the thread.
Message contains 1 attachment: spam.gif
To lobby my government to revoke their charters.
I don't want anything at all to do with for profit insurance companies. If you patronize them and get into an accident with me, you're forcing that interaction on me.
Veiled racism is still racism.
Why is this tagged "USA"? I thought nerds were better at geography than this.
Private insurance competes to have the most competitive profitable price they can.
Government insurers don't need to be competitive, and they tend not to be. Of course the government may appear cheaper is when they subsidize the cost of providing insurance with tax dollars.
Additionally if you don't like the deal the insurer offers you have no other choice with the government, private insurers you can switch.
In many provinces they have insurance boards to review rates, have systems to make sure everyone has access to some sort of coverage.
In Ontario we have no fault, which means your insurer pays for your claim, there are no court cases to determine who pays.
For criminal/insurance reasons fault is still assigned, so when that b**ch decided to drive into me her insurance went up, and mine didn't.
Is is still racism if it's true?
In any case, in Winnipeg you'd be closer to the mark suspecting the native population, I suspect.
Private insurance charges the highest price they competitively can, and then tries to weasel out of their obligations.
Government insurers are demonstrably cheaper, and aren't subsidized. In fact, it's the opposite, they provide funding back to the government.
Anyone who seriously makes an arguement against fiat currency simply betrays a lack of education.
There's absolutely nothing banks do that couldn't be done more efficiently by credit unions.
...or High Risk Drivers?
sometimes, nothing.
If that's not what he meant, who is the racist?
If you really want to know, go ask your local librarian to help you find a book at your knowledge level. Really, they're educated people (usually Master's degree or better), and that's what they're there for.
But in brief, modern economies need a money supply that can be adjusted to meet current conditions.
Credit Unions can and do provide all services banks do. Taxation isn't an issue. Corporate taxes apply mostly to profit, which is the issue. Credit Unions break even, returning any excess to their members. Banks are taxed on that percentage of revenue they embezzle from their members.
What ever happened to just locking the bastards up and throwing away the key?
Re read that until you figure out why.
I dispute your assertion that government insurance is cheaper.
In some cases the government does subsidize their auto insurance department. At the very least it is an indirect subsidizaton by not requiring similar reserves or reinsurance as that of private insurance.
If you want to see some of the opposing viewpoints check out ibc.ca.
Most monopolies, government run or not, tend to be less efficient, have substandard performance, and overcharge for the good or service they provide.
My immobilizer consist out of: Bluetooth + CarPC under carseat (invisible, just music on FM):
Basically if I'm not in the car with my cell phone and somebody starts it up (while the car DOES have security features like a chip in the key), the computer will boot up (as it does always) and as soon as it can't find my mobile phone, it will just cut power to the fuel pump so it appears the car is out of fuel or otherwise broken down. It's a neat feature I've built with a Via C3 and a relay on the parallel port, since the computer needs time to boot up and time to run the script it will also happen only after about a minute (after they drive out the parking lot landing it in the middle of the street). Luckily I've had it never seen actually work with other persons than me. The computer keeps running for about 30 minutes after the car has been turned off, so it won't drop the power of the relay for a while unless I reset the system.
Another feature which might really immobilize the car(thief): Put a packet of C4 under the drivers seat or otherwise lock up the individual in the car and dial-out to the police.
Custom electronics and digital signage for your business: www.evcircuits.com
I take the client's point of view, not the providers (look, insurance can easily be a racket, right?). Since most people live in one jurisdiction over time, and have licenses most of their lives, the series of utterly necessary short transactions involving various vehicles is one long commercial relationship that involves some invasion of privacy, and thus like a lifelong transaction, so I propose that a public monopoly can do a more convenient and accountable job in these long-term situations.
In the US, there is a provision called SR-22 to help fill the gap; moreover, there is no recognized right to operate a motor vehicle, even roads are paid with taxes (thus justifying licensing and insurance mandates). Finally, being uninsured during any stretch while owning a vehicle registered for normal operation is indeed a bad sign to prospective insurers.Since any car on the road must be insured (here), it makes sense to tie the insurance to the registration, and thus in BC it is one 15-minute visit to a ubiquitous neighbourhood "Autoplan" franchise, where you get your plates, transfer of ownership, and insurance. It rocks! No need for multiple visits to multiple layers of bureaucracy or insurance attached to a person. Not only that, shopping is pointless (so no stress about the fine print or misrepresentation, or money wasted on advertising), and it's a decent rate compared to the national average.
As an added bonus, the public insurance corporation and its broker franchisees participate heavily in road safety programs, contributing in a realistic way to the public interest.
The situation I was referring to in Ontario, where I had no insurance for 8 months and thus couldn't easliy get service from private insurers once I purchase a car, was a carless period. It never occured to me that one might be able to operate a vehicle without insurance, but it's of course what you assumed. That's what I get for growing up in a nanny state--but in this case, with myriad fools operating 2 tons of steel at high velocity, I'm glad for the regulation.
BTW, don't believe what you hear about the BC provincial gov't--it's mind-bogglingly surreal at times. Yet some things do work well, despite (or maybe because of) the swings between socialism and free marketeering.
Damn those pesky terrorists
* I move quite a bit, so I would like the freedom to choose among insurance companies based on their quality of service and differing rates in different areas (this is because actuarial assumptions vary).
* Insurance coverage can be transferred between providers, so there is no market failure involved. Public monopolies are used in situations where the product is excludable (people can be prevented from using it), but non-rival (competitors can subsist because of high startup costs or physical impossibility). The obvious examples are utilities, which are infrastructure-heavy and there is only so much room.
OTOH, if BC's insurance plan runs at a profit, I'll be impressed. It might be convenient for you personally, but it might cost you (or your fellow taxpayers) in other ways.
You've accused me of an ad hominem, without justification, and turn around to sling your own. So yes, I'll cut this off.
OK, let's get some details straight here (Winnipeger here), this has been in the works for a couple of years, with a few really important factors guiding the process.
So the basic goal here is to slow down the joy-riding. They anti-theft devices they are installing require both the car key AND the little key fob. Contrary to some espoused opinions, they do indeed go through the process of re-wiring the starter through the device and they specifically install a red blinking light on the dashboard as a "hey-we're-protected" marker.
Yeah it doesn't stop the "steal they key" method, but that wasn't the problem. It doesn't stop the computer + hot-wire method, but that wasn't the problem either. It doesn't stop people from smashing and grabbing stuff, but hey, that wasn't the problem either. The goal is to make it more difficult to steal cars and it's going to work.
Now as to the whole "public" insurance thing, it has some serious benefits. Accidents are resolved quickly and everyone involved is taken care of (it's a government responsibility), young drivers with clean records are not charged 4 times as much for their insurance, average rates are lower b/c any "profits" are re-invested. Of course, the best drivers don't get rates as low as they could with private companies. It's trade-off, but it does let things like this immobilizer requirement actually happen.
I guess I mean things like having to research whether a company has low premiums but high deductibles with abstruse rules, aggressive adjustors, changeable rules, unusual restrictions, fine-print-itis. Caveat Emptor is a time-consuming burden that is lessened with a public company (in theory).
* I move quite a bit, so I would like the freedom to choose among insurance companies based on their quality of service and differing rates in different areas (this is because actuarial assumptions vary).Within the very large region of British Columbia ICBC employs actuarial variation; I pay less in this quiet rural area than when I lived in Vancouver with its crazy mishmash of global driving habits and narrow streets. Typically for a less-than-horrible monopoly, ICBC's service is decent, certainly better than most of the private companies I investigated in Ontario. The rates are currently are a bit less than I would pay for similar discount providers there (would vary depending on the risk bracket; I'm in the safe bracket, but I think I subsidize the riskier drivers, which doesn't make me happy). Competition is managed through franchised brokers where retail service can vary, but the ground rules are uniform.
* Insurance coverage can be transferred between providers, so there is no market failure involved. Public monopolies are used in situations where the product is excludable (people can be prevented from using it), but non-rival (competitors can subsist because of high startup costs or physical impossibility). The obvious examples are utilities, which are infrastructure-heavy and there is only so much room.Well, my experience with the open market was a short gap in car ownership excluded me from most providers and shopping around was ironically kafkaesque. A year later, I had even worse experiences with an unusual insurance requirement (insuring a cube van for non-commercial use), a problem I didn't have in monopoly-land BC. When I called the association of insurance companies to ask for advice, the official response was to lie to obtain my insurance!!
OTOH, if BC's insurance plan runs at a profit, I'll be impressed. It might be convenient for you personally, but it might cost you (or your fellow taxpayers) in other ways.In theory, ICBC uses the profits from optional insurance to subsidize basic insurance, and to promote road safety. Ontario doesn't benefit from the significant road safety program this results in, and it shows. I prefer cheaper basic insurance and the considerable public safety benefits to paying for ads, giving my personal info to US-based insurers, sifting through policies, inconvenience, and worrying about hucksterism. It's the lesser of the evils.
Damn those pesky terrorists
with the gun control laws. Certainly not a handgun, and long guns are now unheard of.
All of Canada is like US cities, only the carjackers have weapons, and they know it.
A few things:
* Caveat emptor is more palatable than gov't program, IMHO. Gov't programs are monocultural, so they won't meet everyone's needs (someone in a similar position to yours might actually have it worse); and, from lack of competition, often very inefficient. If you don't like wading through contract fineprint, there are consumer rating and protection services like Consumer Reports.
* As an investor, I don't mind insurance companies taking profits.
* I don't know about Canada, but in the US, at least, you aren't paying for bad drivers -- insurers aren't obligated to take on bad drivers, and they can charge whatever they want. If you can't afford insurance because your are judged high-risk, that's what the SR-22 surety bond provision is for -- basically, self-insuring.
I can't believe this made Slashdot. I live in Winnipeg, and recently (3 months ago) my wife and I received a letter from MPIC (Manitoba Public Insurance Corporation) telling us that our Dodge Caravan was on their list as one of the most commonly stolen vehicles, and that we could have an imobilizer installed free of charge. While be both felt that it may be a blessing that someone steal the vehicle, the $100 savings off our insurance premium intrigued us. Of course we opted for it, and for $25 we got a second key cut. Seems like good business to me. Manitobans enjoy some of the lowest insurance premiums in the country. I applaud MPIC for their efforts. What I think warrants further discussion is why we (society) allowed things to get to this point.
Yes, I used to think so too. Now I believe that the nature of the transaction varies the nature of efficiency and providing for marginal cases. In the case of insurance, the market in Ontario is astonishingly monocultural despite hundreds of competitors. Competition and pseudo-variety can provide its own gross inefficiencies, as well. Like I stated previously, enduring transactions like licensing drivers, or insuring them, might be best served by a public agency. A hybrid, as in the BC system, seems to work better.
Sometimes it's important to know that someone's watching your back. I prefer competition in purchases. Mandatory long-term transactions that are highly complex and legalistic and data-heavy should be strongly regulated and made client-friendly, because the possibilities for misdirection etc. are considerable. I know brilliant people who can't, or shouldn't, be bothered with becoming expert shoppers for things like auto insurance.
As an investor, I don't mind insurance companies taking profits.Fine, but we aren't all financial gamers. As a member of society as a whole, I resent gouging, and prefer profits from society-wide transactions invested in the general public good.
I don't know about Canada, but in the US, at least, you aren't paying for bad drivers -- insurers aren't obligated to take on bad drivers, and they can charge whatever they want. If you can't afford insurance because your are judged high-risk, that's what the SR-22 surety bond provision is for -- basically, self-insuring.I rather think it is the responsibility of the car owner to control who drives the car. I agree that bad drivers should stop driving or pay the price, but I've experienced that this can be taken to ridiculous extremes, in a manner no better than nightmare bureaucracies. I think you trust the quasi-free market to serve the public good... too much in this respect, as consumers can't be well-informed enough, and the market can be too fractured. Think of it as another version of caveat emptor.
Damn those pesky terrorists
Here in Canada, the credit unions combine their ATMs, and don't charge each other for their use. Recently, two of the big banks joined this system, but only after the government threatened to ban ATM surcharges outright.
Score one for government intervention.
Your point is well-made -- transaction costs are high. Now, in a free market some service is supposed to step in and streamline things, but that doesn't always happens, especially if there are static gov't regulations to work around.
Healthcare is a prime example. Someone calculated recently that, in the the US, regulation amounts to a $169 billion "drag" on the system. If you are ill, navigating the system is no picnic.
I should add that some of the economic efficiency of the insurance industry goes in profits to the owners, who can then allocate that capital in other investments.
:)
Call your broker!
Hm, somehow I don't think that in the USA the large profits gleaned off one's auto insurance premiums is invested into road safety. Failure to do so, however, is a gross inefficiency at the societal scale.
Damn those pesky terrorists
It may be -- since the gov't owns the roads (largely out of necessity), there's no way for individuals to choose how much safety they want, so any profits are not efficiently allocated here. OTOH, insurance companies have no interest in paying out claims, so many US insurance companies do sponsor road safety. For example, the insurance industry's car safety ratings are far more demanding than the US gov't's.
Of course, the profits from investing in insurance companies (or anything) go into other things that are useful to people.
People were only "willing" to pay more for ATMs because they didn't have a choice in the matter. You use whatever ATM is available. Also, the fees weren't spurning the installation of new ATMs. They were just replacing free ones.