My Fault Insurance

I was speaking with an acquaintance the other day and she commented how she enjoyed a trip to the Casino. As usual, she came away a winner. In fact, I have never heard her say that she lost money. Sometimes she says she ‘broke even’. Maybe that is her euphemism for losing a few shekels.

Let’s face it, casinos don’t lose money. They have the odds figured on the games of chance played with cards. There is a reason why the dealer can hold and pay at a certain number. The number of slots for the ball to drop into in roulette is carefully calculated. The one-armed bandits are programmed to pay on a carefully calculated algorithm.

One can carry the foot of an unlucky rabbit, secret a horseshoe past the metal detectors, or chant a prayer to Our Lady of Luck, but you cannot win all the time. Unless you own the casino. Even the insurance companies wouldn’t write that policy.

Or would they write the policy? Come to think of it, insurance companies are not all that different from casinos. Their payoff algorithms are called actuarial charts. For life insurance they bet you that you will live beyond a carefully calculated date. You pay premiums (bets) every month that will exceed the value of any payoff the insurance company will make if you expire in advance of your best before date.

Life insurance companies even have different games you can play. Whole Life means you are in for the long shot. Reducing Term means they cut their losses as you age and the odds increase that you are going to make it. Mortgage insurance bets that you will a) last long enough to pay off the house or, b) the house will be worth more than you are if you can not stay in the game until the end of term.

The one good thing about life insurance is that so far, the government doesn’t insist that you carry it. Not so with auto insurance. It’s a real crapshoot trying to guess the accident liability for health claims let alone patching up the tin lizzy after a crash. There are too many variables involved in auto insurance for the insurance companies to make a sure calculation of the odds. So the insurance companies climbed into bed with the government

Somehow the insurance companies have persuaded the government to insist that we all have auto insurance before we get into our vehicles and aim them down the highway. Knowing that we must have insurance, the two-armed bandits share our driving and claims records with each other so one is unable to escape their clutches.

If you have a fender bender or crack a windshield and make a claim, your insurance premium goes up until you pay for the cost of the accident. Why not just pay the glass installers a lower rate for the new windshield and forget the claim, cutting out the middle man? It has to cost more to involve the insurance company and one might suspect even more than a little extra.

To compromise your peace of mind further, because of your claim your old insurer may shuffle you off to another company since you are now a ‘high’ risk – and subject to higher rates. The government insists you carry insurance so you either pay or not play. This is better than running a casino.

You may be the best 23-year old male driver in the whole dominion, but you are going to pay for insurance coverage as if you were the worst. At least the casino accepts our money impartially, no matter our win / loss record. That is why the casino allows my winning friend to return day after day.

‘No-fault’ insurance has tried to address some of these problems with limited success. Maybe we should have insurance where we accept responsibility for more of our actions – ‘my fault’ insurance.

For instance, the contract snowplow operators were having trouble getting insurance coverage in Northern Ontario because of lawsuits attributed to poor winter maintenance. Maybe if the roads are slippery or heavily snow-covered we should take some responsibility for the decision to risk the drive. Don’t go running to the insurance company because of poor decision-making that landed you in a ditch where you crumpled Rosinante’s grill.

We can set our deductible levels to reduce premium cost and accept some of the financial risk. Maybe if we drive under the influence or without seat belts then the cost of the repairs to our body and car ought to be borne by us, a DUI deductible or ‘my fault’ insurance.

The same might be said of health insurance. If we fail to heed the no-smoking advice or eat too many McCalories and become ill because of our action, maybe we, not health insurance should pay. But our society does not work that way. We band together to look after the weak, feeble and incapacitated. It’s probably a good thing, too.

Snowmobilers will be familiar with the high cost of insurance as the trail fees rise to meet liability coverage premiums. No doubt this relates directly back to claims by people who have ridden while under the influence, drove well above the posted speed limits and were dumb enough to rush about in the dark hitting trees, docks and ice ridges. Some are even deluded into thinking that a skim of ice will support their speeding machines. ‘My fault’ insurance would stop many of these claims, making snowmobiling less expensive for all.

We avoid taking personal responsibility for our health, our environment and even our auto insurance by paying dollars to third parties. Whether that third party is a government or a private company, we remove ourselves from the line of fire when the fit hits the shan. So I continue to pay for auto insurance knowing that when an accident eventually happens, the pool of insured will pay my costs, even if the accident is my fault.

The odds of instituting ‘my fault’ insurance are very slim. At this time our society is still a ‘me’ society. While most of us are generous in our support of good causes or emergencies, we still look after Number One first. Except when something goes wrong. Then we quickly blame someone else and expect ‘them’ to fix it.

I think I’ll skip Rama on my next trip south. My acquaintance has used up all the odds of winning. I’d be certain to lose, and it would be my fault for even trying to win. It’s enough of a gamble to make the drive south.