Risk equalised motor insurance

Cantab.

Seeing as we now have risk equalisation in the health insurance sector, why not apply the same logic to motor insurance?

Just like the way younger people subsidise older people's health-care costs, should older people subsidise younger people's motor insurance costs? Is there a discrepency in the consistency of government policy-making?

Gurgle

Cantab. wrote:

Is there a discrepency in the consistency of government policy-making?

What could possibly have given you that idea?

(Is there a semi-state non profit motor insurance company around ?)

davelerave

the first thing the government should do is get young drivers trained properly before they get driving.

jester77

davelerave wrote:

the first thing the government should do is get young drivers trained properly before they get driving.

This is definetly the first thing they should do!

I can't figure out the logic of a person who fails their driving test being allowed to drive home It's no wonder we have so many fatalities. Doesn't exactly take a genius to figure out that the provisional license should be done away with and a proper driving school system brought in that requires a person to pass their test before being allowed to sit behind a wheel on their own!

seamus

In a word...no. But that's only because risk equalisation in the healthcare sector makes me sick, so I'd be a hypocrite to commend it in the car insurance business.

Gurgle

davelerave wrote:

the first thing the government should do is get young drivers trained properly before they get driving.

No, the first thing the government should do is cancel the license of everyone who never took the test and make them do the theory test before they get their 'first' provisional. That should get a good big batch of dangerously old people off the road.:D

The second thing they should do is have a mandatory re-test every 10 years.

The third thing they should do is actually enforce at least some of the traffic laws.

And then, eventually, the fourth thing they should do is introduce 'Driving' as a mandatory subject for both the Junior and Leaving Certs.

cyclopath2001

Gurgle wrote:

No, the first thing the government should do is cancel the license of everyone who never took the test and make them do the theory test before they get their 'first' provisional. That should get a good big batch of dangerously old people off the road.:D

That's thoughtless nonsense.

They may be annoying if you're impatient, but, old people are not dangerous drivers. The opposite applies, they drive cautiously and within their ability. Often, they rely on their cars because they're not strong enough to walk to the shops or use public transport.

But, as one who passed on the first attempt, I think that the test is way too easy & those who fail it should be banned or at least limited to low-powered. speed-restricted cars.

Cantab.

Whilst all the above are valid points of view, they're not really on topic so to speak.

I don't believe drivers who have not passed an archaic driving test and get back in to their cars are nesecarrily more likely to have an accident than full licence holders. Drink and speeding are undoubtedly the main causes of fatal and serious injury accidents.

Getting untrained drivers off the road is really only a secondary matter that must be balanced with the need for young people to get from A to B - they are after all cogwheels of the economy just like older drivers who didn't have to wait 14 months for a bloody test. If you're going to force provisional licence holders off the road, it can only be done in tandem with drastic driver testing reforms.

Ultimately banning untrained drivers (circa 150,000 of them on the roads at the moment) = political suicide and no government or viable opposition party would propose such a thing as they would lose hundreds of thousands of young votes (then again, young people don't generally vote that much).

A good point was made about there being no semi-state motor insurance companies in Ireland as a reason why risk equalisation does not apply to the motor insurance industry.

Perhaps the health insurance industry is a special case of insurance because peoples lives and well-being are at stake?

Anyway, my opinion on the matter is that if the government are going to dictate to the health insurance market, they should apply the same logic to the motor insurance, business insurance and every other insurance market.

colm_mcm

seamus wrote:

risk equalisation in the healthcare sector makes me sick,

thus costing VHI even more money!

cyclopath2001

Cantab. wrote:

Perhaps the health insurance industry is a special case of insurance because peoples lives and well-being are at stake?

I think the difference between risk equalisation in health and motor insurance comes dow to the fact that, in health the risk is mostly involuntary whereas with motor, the risk is voluntary.

That is to say: getting old is involuntary whereas driving dangerously is voluntary.

Hobbes

Cantab. wrote:

I don't believe drivers who have not passed an archaic driving test and get back in to their cars are nesecarrily more likely to have an accident than full licence holders.

The test has changed a lot. For example now apart from the exam you are also expected to detail how the engine works. Having them run through another driving test as well will allow them to be reviewed.

The only issue with this is the amount of time waiting for a driving test.

Btw, a lot of Irish drivers got thier license through an amnesty some years ago.

If you're going to force provisional licence holders off the road, it can only be done in tandem with drastic driver testing reforms.

I wouldn't force them off the road but I would enforce the L plate rules (eg. No motorway) and have the secondary passenger requirement scrapped under certain conditions (eg. If you have 10 certified driving lessons then you are required passenger for 2-3 months only).

Also stamp down on speeding and people driving areas they aren't supposed to (eg. hard shoulder).

seamus

Hobbes wrote:

The test has changed a lot. For example now apart from the exam you are also expected to detail how the engine works.

Not exactly. You are supposed to be able to point out certain fluid containers, and how to check them. That's about it. My gf learned them all for her test, but apart from opening the bonnet and checking the windscreen washer fluid, she's forgotten it all now.

I wouldn't force them off the road but I would enforce the L plate rules (eg. No motorway)

Like someone else pointed out (perhaps on another thread), if you stick one squad car on each slip road coming off the M50 at rush hour, you could check tax, insurance and NCT and catch hundreds and hundreds of L drivers in a single day, with little disruption to traffic (it's barely moving anyway). It would only need to be done for a week, and you'd see the amount of learners on the motorway plummet. You don't even need to charge them. Just scare the ****e out of them.

I came upon a learner doing less than 40km/h coming off the M50 onto the N4 last night. So dangerous.

Boggle

I think the difference between risk equalisation in health and motor insurance comes dow to the fact that, in health the risk is mostly involuntary whereas with motor, the risk is voluntary.

I never volunteered to drive to work - I was forced due to lack of options!! I never volunteered to drive on icy roads - it was forced on me due to cold weather. I never volunteered to drive on crap roads... (should I go on about how crashes can occur due to no choice of anyone??)

Your statement is untrue - people dont volunteer to crash, they do so generally because they make mistakes...

Nuttzz

Seamus, you're assuming that all L drivers have L plates up, if not and their tax and insurance is up to date bar stopping everyone and asking to see their licence. Putting them on the slip road would cause massive talk backs by the rubbernecking brigade, traffic at the tallaght exit northbound was neraly at a standstill this morning as people slowed down to look at an empty 206 parked on the hard shoulder. Look what happened on the m50 when they put up a ferris wheel beside it ffs

Gurgle

cyclopath2001 wrote:

they drive cautiously and within their ability.

lol

Unfortunately, in many cases their ability is limited by being semi-blind, totally deaf and having a reaction time of 25 seconds.

You've never driven around a bend on a country road and met a tea-cosy driving an '85 Fiesta right down the middle of the road!

And licenced for life - what lunatic came up with that idea ?
The rules change, the roads change, health changes. If you can't pass a test, you shouldn't be allowed continue to drive.

Nobody should be driving at all who hasn't at a minimum demonstrated knowledge of the basic rules of the road - i.e. the theory test.

That includes 17 year olds starting to learn how to drive, 50 year olds who got their license in the 'Amnesty' and 70 year olds who bought their license in the post office for 12 and sixpence.

Sparks

seamus wrote:

Like someone else pointed out (perhaps on another thread), if you stick one squad car on each slip road coming off the M50 at rush hour

You'd cause a tailback that would run from the M1 to the N11. Not good. And what good would it do? The majority of fatal crashes do not happen on the M50 during rush hour, they happen outside rush hour on back roads. Take your squad cars and put them there instead! Or even put them outside the car park to their local pubs to check for drunk drivers - after all, if you see someone stagger from the pub to the car and drive off, you've got reasonable suspicion and can stop them, whereas you don't elsewhere unless they drive into someone or in a dangerous manner (which your objective is to prevent!)

I came upon a learner doing less than 40km/h coming off the M50 onto the N4 last night. So dangerous.

Er, it's a 60kph zone on the N4 as you come off the M50, so doing less than 40 isn't dangerous, just annoying. Now, coming onto the M50 from the N4 at less than 40, that's dangerous. And for some reason, noone ever gets stopped for doing it by the gardai...

seamus

Sparks wrote:

Er, it's a 60kph zone on the N4 as you come off the M50, so doing less than 40 isn't dangerous, just annoying.

It's 80km/h now

Sparks

seamus wrote:

It's 80km/h now

No, it's still 60kph from before the roundabout east of the M50 on the N4 to past the roundabout on the west of the M50. In order for it to be 80kph, you'd have to have a roundabout with a speed limit of 80kph - and that'd probably be a first in this country...

(and if you take the slip that leads directly to the N4 in either direction skipping the roundabouts, you still go through a 60kmh zone from the slip until you're established on the N4).

seamus

Northbound....have to doublecheck that. I do that slip a lot, and I don't recall ever seeing a 60kph sign on it.

Mailman

The only part of motor insurance where risk equalisation is cut and dried is with regard to the 2% insurance levy. The risk to the government for both a low risk and high risk driver is the same i.e. zero so the levy should be an identical flat fee which should ideally be €0.00 especially since one of the election promises made by both parties to government was that they would implement the MIAB report in full which recommended the levy's abolition.

Hobbes

seamus wrote:

Northbound....have to doublecheck that. I do that slip a lot, and I don't recall ever seeing a 60kph sign on it.

Northbound is 60kph, there is an 80kph sign just before it though. Anyway speed limits are limits not targets. You should really drive at the safest speed for your car/road conditions that is within the speed limit.

A Dub in Glasgo

I would imagine a lot of health problems people have later in life stem from their choices in life ie deciding to smoke, drink or eat fatty foods. How is that different to a persons choice in deciding to drive to work for example?

cyclopath2001

Gurgle wrote:

lol Unfortunately, in many cases their ability is limited by being semi-blind, totally deaf and having a reaction time of 25 seconds.

Strangely, despite all these alleged disabilities, elderly drivers have a much better safety record than under-25's. They are probably feigning deafness & not seeing as it's usually best to ignore bullies on the road.

A Dub in Glasgo wrote:

I would imagine a lot of health problems people have later in life stem from their choices in life ie deciding to smoke, drink or eat fatty foods. How is that different to a persons choice in deciding to drive to work for example?

I'd certainly be in favour of risk-loading people with unhealthy lifestyles, prevention is better than cure.

MrPudding

Nuttzz wrote:

Seamus, you're assuming that all L drivers have L plates up, if not and their tax and insurance is up to date bar stopping everyone and asking to see their licence.

Not neccessarily. You would have to accept that you would not get everyone. Work it the same way as the people giving away free stuff at lights in the morning. Start at the first cars stopped once the light goes red. Work your way down until the light changes. Once the light goes green step back and let the traffic flow.

Anyone that requires further attention can be directed to pull in to a reserved area off the road to be processed. This would include driver with no tax or insurance disks displayed, L plates on the car or no driving license.

Where there is a will there is a way. Like many things in this country if they actually wanted to do it they could.

MrP

Nuttzz

MrPudding wrote:

Once the light goes green step back and let the traffic flow.

It is gardai we are talking about! They arent going to stop talking to someone because the light changes

light turns red, garda goes to first car, asks for licence, its in my handbag in the boot she says, gets out, opens boot, rummages around bag, finds licence, gardai inspects it, back the licence goes into the bag, back into the boot and she gets in and drives off. plenty of viewing for the rubberneck brigade and would take longer than a light change...

TommyK

Gurgle wrote:

And licenced for life - what lunatic came up with that idea ?
The rules change, the roads change, health changes.

Did you know that in most E.U. countries, their driving licences are *literally* for life.

By that I mean they don't have to renew them every 3 or 10 years - they get them once and that's it; barring disqualification, they keep them forever.

I dunno what they do about the pictures when people get older though...

Tommy.

Imposter

TommyK wrote:

I dunno what they do about the pictures when people get older though...

In most cases nothing. I've seen some very funny pictures on some 40+ people's licences!

Risk equalisation is wrong in all insurance sectors imo.

Similarly learner licences should not exist for driving. Learn with a qualified instructor and then pass your test to be allowed drive on your own. Tests should be available within 3 months of applying and everyone should have to do a test every 10 years. Then you can be reasonably confident (after the initial 10 year timeframe) that people at least know how they should drive.

Of course enforcement of traffic laws and licencing/insurance/tax/nct requirements must also happen.

Stark

Imposter wrote:

Similarly learner licences should not exist for driving. Learn with a qualified instructor and then pass your test to be allowed drive on your own.

I don't think you can get up to any sort of test standard with just a few instructor lessons. Like anything in life, you need some practice time in between tuition in order to effectively progress.

Imposter wrote:

Tests should be available within 3 months of applying and everyone should have to do a test every 10 years. Then you can be reasonably confident (after the initial 10 year timeframe) that people at least know how they should drive.

While your theory is sound, the waiting lists for driving tests just keep getting longer and longer, and that's with people only doing one test(bar initial failures) per lifetime. If we make people resit the test a few times throughout their lives then that problem's just going to get a whole lot worse. You can't have your cake and eat it.

Imposter wrote:

Of course enforcement of traffic laws and licencing/insurance/tax/nct requirements must also happen.

This is what I want to see. You can argue that experience is part of the reason why us young people get screwed for insurance (the insurance companies just screwing everyone anyway being another reason). But girls still get far cheaper insurance than us guys and that's pretty much because you don't see "girl racers" speeding around left right and centre.

Imposter

Stark wrote:

I don't think you can get up to any sort of test standard with just a few instructor lessons. Like anything in life, you need some practice time in between tuition in order to effectively progress.

I dissagree. I got my licence here in Austria by doing a block of 20 lessons as well as going to 'school' for about 20 hours to learn the theory. After the 20 lessons I wasn't a fully rounded driver, that came from further driving but the tester thought I was competent enough to drive on the roads alone. Most people get their tests here at the first time of asking too and imo seem to be far better drivers than in Ireland. You learn the basic skills properly unlike what happens in Ireland with the completely unregulated instructor set-up (not to mention fathers, brothers etc..) as well as a test that is picky in the extreme. The test needs to be more about how you react to situations while driving as well as your driving ability and not if you are 5cm too far away from a kerb while reversing around a corner.

While your theory is sound, the waiting lists for driving tests just keep getting longer and longer, and that's with people only doing one test(bar initial failures) per lifetime. If we make people resit the test a few times throughout their lives then that problem's just going to get a whole lot worse. You can't have your cake and eat it.

If you raise the number of instructors enough that will drop. It's like everything, supply and demand. There are far too few instructors if the waiting times are continually rising. Waiting over a year for some that takes less than an hour is ridiculous.

This is what I want to see. You can argue that experience is part of the reason why us young people get screwed for insurance (the insurance companies just screwing everyone anyway being another reason). But girls still get far cheaper insurance than us guys and that's pretty much because you don't see "girl racers" speeding around left right and centre.

I agree with this but sex of the driver is not exactly the full picture. If they were to use other discriminatory qualifiers, such as education (stupidity factor, if you like) or address (of where you grew up) or race, they would get in trouble but somehow they get away with using the sex of the driver because they have statistical proof.

What's in place here is a level system where you spend 2 years at each level. You start at level 6 and level 0 is the top. If you've no claim in the two years you move up a level, if you do you move down (possibly multiple levels, 10 is the lowest). It works irrespective of sex or age. Engine strength does make the premiums higher and powerful engines are off-limits at some of the levels. This level system is tied to your licence so moving companies is made easy (and in most cases makes a lot of sense). But obviously such a system is too sensible and non-discriminatory for somewhere like Ireland.

Stark

Imposter wrote:

I dissagree. I got my licence here in Austria by doing a block of 20 lessons as well as going to 'school' for about 20 hours to learn the theory. After the 20 lessons I wasn't a fully rounded driver, that came from further driving but the tester thought I was competent enough to drive on the roads alone. Most people get their tests here at the first time of asking too and imo seem to be far better drivers than in Ireland. You learn the basic skills properly unlike what happens in Ireland with the completely unregulated instructor set-up (not to mention fathers, brothers etc..)

Maybe the Austrian temperment is better suited to it. I couldn't hack lessons at all. To me it was the equivalent of having someone show me something on the computer ("type that in there") and shouting "Fingers on the HOME KEYS!!!" for the entire duration of it. Intensify that to a situation where you can't so much as look in the wrong direction for nearly an hour while you're more worried about the fact that you're so noviced you can barely operate the clutch and it all gets seriously stressful. I had to do 10 of the bloody things before I could be insured and get into a car. And even then I had to go back to deserted industrial estate driving for a bit just so I could gain a comfortable feel for driving without all the complications.

Pre-test lessons were quite a bit smoother luckily. I had to unlearn a few stupid things my father taught me but at least I was comfortable enough with the basics that I was in a fit state to take in the million and one things you need to do in order to satisfy someone sitting in the passenger seat with you.

Imposter wrote:

as well as a test that is picky in the extreme. The test needs to be more about how you react to situations while driving as well as your driving ability and not if you are 5cm too far away from a kerb while reversing around a corner.

I think the Hibernian Ignition test is actually a lot better than the standard driving test in this regard.

Imposter wrote:

What's in place here is a level system where you spend 2 years at each level. You start at level 6 and level 0 is the top. If you've no claim in the two years you move up a level, if you do you move down (possibly multiple levels, 10 is the lowest). It works irrespective of sex or age. Engine strength does make the premiums higher and powerful engines are off-limits at some of the levels. This level system is tied to your licence so moving companies is made easy (and in most cases makes a lot of sense). But obviously such a system is too sensible and non-discriminatory for somewhere like Ireland.

That would be cool. It does get better here after you've been driving a few years and build up a no claims bonus. But it is frustrating when you've done everything by the book, never driven unaccompanied, never intentionally broken a rule of the road, did all the requisite lessons etc., only to be hit by the same insurance premium as someone who drives around at 100mph in a souped up unsafe car every night.

ronbyrne2005

why is risk equilisation so bad in the health insurance industry ,when theres a transition from state monopoly to fully free market some regulation is needed for short term to avoid likes of bupa cherry picking and thus making a fortune in the early years of fully open market.
as for risk equilisation in motor insurance ,moral hazard is one reason why it wont be introduced and also that the people who have cheapest insurance now are most likely to be voters .the only reason its being introduced in health market is because the market is in transition from monopoly incumbent to fully open market as already exists in car insurance .the vivas crowd for example could make extraordinary profits for the next ten-twenty years and then pull out of market when it becoms too competitive or they could accumulate enough profits to undercut vhi and put them outta business and make market less competitive in long run.

Shep Smythe

Cantab. wrote:

Seeing as we now have risk equalisation in the health insurance sector, why not apply the same logic to motor insurance?

Just like the way younger people subsidise older people's health-care costs, should older people subsidise younger people's motor insurance costs? Is there a discrepency in the consistency of government policy-making?

Legend.........


SS

phantom_lord

Gurgle wrote:

No, the first thing the government should do is cancel the license of everyone who never took the test and make them do the theory test before they get their 'first' provisional. That should get a good big batch of dangerously old people off the road.:D

The second thing they should do is have a mandatory re-test every 10 years.

That might work, but the problem is that they haven't got enough testers to deal with the demand at the moment never mind if everyone had to do it every 10 years...as soon as you get the test you'd be on the waitinglist for the next one...

The third thing they should do is actually enforce at least some of the traffic laws.

Hmm...wouldn't they need some of those extra 2000 gardai they promised in order to do that? It'd be much easier to just do a bit of revenue collecting with speed cameras....

LostinBlanch

ronbyrne2005 wrote:

why is risk equilisation so bad in the health insurance industry ,when theres a transition from state monopoly to fully free market some regulation is needed for short term to avoid likes of bupa cherry picking and thus making a fortune in the early years of fully open market.

Well apart from the fact that risk equalisation in the health market in Ireland is designed to perpetuate a state owned monopoly which is not prepared to change it's practices to become more efficient to match it's competitors. VHI has 80% of the market and will not bring down premium prices if/when risk equalisation comes in. For more info read the whole thread:

http://www.boards.ie/vbulletin/showthread.php?t=2054866486

If this happened in car insurance circles there would be absolute uproar.

Spacedog

basic model for calculating risk for a re-insurence company:

calculate cost risk --> double/treble it --> cover risk for insurence company --> add on profit margin --> sell to customer.

basic model for large claim against a re-insurence company (e.g. property insurence during a hurricaine):

non-payment, send lawyers to dispute amount payed (e.g. "that not hurricaine damage, that's flood damage, we didn't cover that), eventually settle for a lower amount. insurence company goes out of business and is replaced by a new company or a "competitor" covered by a similar or the same re-insurance company.

The house always wins, insurence is an industry that badly needs to be nationalised for it to be fair, at the very least should be implemented by a community based system like the credit unions.

In the case of car insurance where it is illegal not to have it, we are all essentially forced to pay huge profit margins to insruence bigwigs with no alternative (for the true profit margin of car insurence, get a quote online from a british or american insurence company and compare the diffrence. Are irish people more incompitent on the road than a 15 year old american kid?)

If you agree with me you're a communist