| Car insurance. A recent study maintains | | | | to the Fraser Institute, 40% of drivers |
| that in the good Canadian Democratic | | | | make a claim. Why? It is state owned and |
| Republic [D.R.] car insurance rates are | | | | rates are capped ie. subsidized by |
| only 30% higher than in the US, and | | | | someone else. In Ontario which has a |
| only, [in the industrialized heartland | | | | quasi, semi-market based system only 10% |
| of the communal paradise], running at | | | | of drivers make a claim. Why? They will |
| $1300 per year. Sure they are. I don't | | | | be punished with higher personal rates. |
| know of one single person amongst say | | | | Highly regulated industries always |
| 100, which has a car insurance rate that | | | | suffer from fraud. Not paying for one's |
| low in Canada's urban heartland. Car | | | | performance leads to abuse. A bad driver |
| insurance rates are far higher than some | | | | should pay higher rates. Those rates |
| accounting 'mean' average and as | | | | should be based on driving history; |
| government regulation increases, so does | | | | claim and fraud history; reasonable risk |
| fraud, rates, and consumer frustration. | | | | analysis premised on age, type of car, |
| In Canada alone I counted 59 regulatory | | | | and where he/she drives to on a regular |
| bodies and agencies involved the car | | | | basis. In a competitive market the |
| insurance market - am I to believe that | | | | factors that determine price will |
| all of these are to protect me and to | | | | probably average out to what is fair. In |
| benefit me? Doubtful. | | | | onerously regulated markets the actual |
| Maybe 85 year-old Pastor Paul living in | | | | price someone pays for car insurance, is |
| nowheresville driving a 1960 Ford | | | | never a real market rate. Ergo all sorts |
| tractor, or a Sherman tank pays these | | | | of distortions will occur including |
| so-called average rates. No one in an | | | | fraud, abuse, and people opting out of |
| urban center under the age of 60, | | | | the system and stopping to buy insurance |
| driving anything newer than a 1988 Dodge | | | | altogether. |
| pays anything close to $1300 per year. | | | | The bottom line? Like other markets car |
| La raison? C'est simple - in most | | | | insurance needs to be free of |
| provinces and states, car insurance is a | | | | over-regulation. Some regulation might |
| massively regulated and government | | | | be necessary and some consumer |
| controlled market. This leads to nothing | | | | protection is probably needed. But what |
| but higher costs and misery. Where there | | | | is the point of having in a small place |
| is government, there is consumer pain. | | | | like Canada, some 60 government groups, |
| Car insurance rates vary by state and | | | | all slopping like pigs on the gruel of |
| province and by urban and rural center. | | | | car insurance premiums? |
| Some jurisdictions have state-owned | | | | How does escalating fraud, rising prices |
| insurance firms providing coverage [the | | | | and price discrimination based on sex, |
| socialists in British Columbia prefer | | | | age, skin color, and location, |
| this]; a mixed private - government | | | | controlled by government benefit me the |
| regulated system [most US states and | | | | consumer? The average, young, white, |
| Canadian D.R. provinces have this]; or a | | | | urban male is not paying some fictitious |
| free-market unregulated system [Texas, | | | | amount of $1300 - he will be paying |
| South Carolina]. | | | | double or triple that even if he has a |
| Guess which ones has the best rates and | | | | good driving record. [Try discriminating |
| most competitive pricing markets? Well | | | | on those criteria in the private sector |
| done. Texan rates for car insurance | | | | - before a human rights group starts |
| average about $800 US per year. South | | | | beating on you, good luck]. |
| Carolina after 30 years of regulatory | | | | Open up the car insurance market and |
| nonsense, went to a free market system. | | | | watch rates and government stupidity |
| Rates plummeted to $760 on average. | | | | decline. State ownership only leads to |
| Texas and South Carolina have pretty | | | | fraud and abuse. |
| much the lowest car insurance prices in | | | | Notes: |
| the US. Big surprise. [For teeth | | | | ======== |
| gnashing Marxists these low rates are of | | | | Report by Mark Milke for the Insurance |
| course calibrated to the death penalty.] | | | | Bureau of Canada |
| It should be said that lower car | | | | Cato on the regulatory costs in the US: |
| insurance rates are not even indicative | | | | Canadian bodies involved in Car |
| of a good system - but lower regulatory, | | | | Insurance: |
| bureaucratic and fraud costs are. Texas | | | | 1. Canadian Insurance Industry |
| and South Carolina have the lowest rates | | | | Organizations |
| of fraud, abuse and regulatory oversight | | | | 2. Canadian Life and Health Insurance |
| in the US. They also have real | | | | Association (CLHIA) |
| market-set prices, not government | | | | 3. L'Association canadienne des |
| managed 'ranges'. | | | | compagnies d'assurances de personnes |
| For the average urban Canadian - the | | | | (ACCAP) |
| fictitious one from the Fraser Institute | | | | 4. Canadian Association of Mutual |
| study - who paid '$1300' in Toronto, the | | | | Insurance Companies (CAMIC) / |
| average big hat Texan paid $350 CDN less | | | | L'Association canadienne des compagnies |
| per annum for his car insurance. There | | | | d'assurance mutuelles (ACCAM) |
| are many reasons why rates might differ | | | | 5. Ontario Mutual Insurance Association |
| between 2 locations. Rate calculation | | | | (OMIA) |
| factors such as age; urban density; | | | | 6. Insurance Bureau of Canada (IBC) |
| number of accidents in that | | | | 7. Bureau d'Assurance du Canada (BAC) |
| jurisdiction; the number of claims in | | | | 8. Insurance Institute of Canada (IIC) |
| that area; ethnic demographics; and | | | | 9. Institut d'Assurance Canada (IAC) |
| individual driving and payment history | | | | 10. Center for Study of Insurance |
| all influence rates of course. Common | | | | Operations (CSIO) |
| sense stuff. | | | | 11. Le Centre d'etude de la pratique |
| But is a driver in Dallas, a $350 per | | | | d'assurance (CEPA) |
| annum better driver than some guy on the | | | | 12. Canadian Institute of Actuaries |
| outskirts of Toronto? Maybe he is, maybe | | | | (CIA) |
| the laws in Texas for bad driving are | | | | 13. Institut Canadien des Actuaires |
| tougher, maybe the Texans have a lot | | | | (ICA) |
| more of those studly looking Highway | | | | 14. Insurance Broker Association of |
| Patrol officers on the look out for fast | | | | Canada (IBAC) |
| driving cowboys. Maybe the average Texan | | | | 15. Association des courtiers |
| drives slower than the average maniacal | | | | d'assurances du Canada (ACAC) |
| Canadian zooming in to town on ice | | | | 16. Advocis - The Financial Advisors |
| covered roads. But then again maybe some | | | | Association of Canada |
| other factors are driving the | | | | 17. Canadian Coalition Against Insurance |
| differential in rates. | | | | Fraud (CCAIF) / La Coalition Canadienne |
| A key factor never covered by the media | | | | Contre la Fraude (CCCFA) |
| and one which most consumers don't | | | | 18. Canadian Life and Health Insurance |
| consider is the cost of state | | | | Compensation Corporation (COMPCORP) |
| interference and fraud. Do you see on | | | | 19. Societe canadienne d'indemnisation |
| your insurance bill, 'taxes collected by | | | | pour les assurances de personnes (SIAP) |
| government'? Or, 'your share of this | | | | 20. Property and Casualty Insurance |
| year's fraudulent claims'? Or, | | | | Compensation Corporation (PACICC) |
| 'regulatory fees paid by you to the | | | | 21. Societe d'indemnisation en matiere |
| insurance industry'? Or, 'amount paid to | | | | d'assurances IARD (SIMA) |
| support government employees regulating | | | | 22. Canadian Life and Health Insurance |
| the workers in the insurance regulatory | | | | OmbudService (CLHIO) |
| agencies'? | | | | 23. Service de conciliation des |
| Of course not. | | | | assurances de personnes du Canada |
| Like socialized health care, the costs | | | | (SCAPC) |
| of big-mommy state regulation are never | | | | 24. The General Insurance OmbudService |
| disclosed to the poor schmuck writing | | | | (GIO) |
| checks to insure his car. For socialist | | | | 25. Service de conciliation en assurance |
| health care recipients it is the same - | | | | de dommages (SCAD) |
| have you ever received a statement | | | | 26. Insurance Broker Association of |
| saying, 'this is what you paid in a | | | | Ontario (IBAO) |
| health tax, and this is what you | | | | 27. Registered Insurance Brokers of |
| consumed in health services'? Such | | | | Ontario (RIBO) |
| transparency is not even discussed | | | | 28. Insurance Brokers' Association of |
| within government regulated markets. | | | | Saskatchewan (IBAS) |
| A large component of government burden | | | | 29. Canadian Insurance Accountants |
| in regulated markets? All the little | | | | Association (CIAA) |
| fees and taxes included in your car | | | | 30. Canadian Insurance Laws |
| insurance price, which are never | | | | 31. Insurance Companies Act (i-ii.8) and |
| disclosed. In almost any regulated, | | | | related regulations |
| non-market competitive jurisdiction, | | | | 32. Alberta: Insurance Acts & |
| insurance rates only go up - they never | | | | Regulations |
| go down. And there is very little price | | | | 33. British Columbia: Insurance Act & |
| competition between insurance vendors. | | | | Insurance Corporation Act (Chapter |
| As Doug McClelland of the Insurance | | | | 226-232) |
| Corporation of B.C., which has a | | | | 34. Manitoba: Insurance Act (I40) & |
| monopoly on basic car coverage recently | | | | Insurance Corporations Tax Act (I50) |
| stated: "It's not the private sector | | | | 35. New Brunswick: Insurance Act (i-12) |
| that sets the insurance rates in any | | | | 36. New Brunswick: Insurance Act (i-12) |
| province, it's the regulator that does." | | | | - Regulations |
| This is not entirely true since in some | | | | 37. Newfoundland and Labrador: Insurance |
| Canadian provinces the market does help | | | | Act (i10), Insurance Contracts Act |
| set rates. But his point is valid. | | | | (i12), Life Insurance Act (i14) |
| Across Canada and most of the US it is | | | | 38. Nova Scotia: Insurance Act (Chapter |
| the government that is defining the car | | | | 231) & Regulations (81/2000, 94/96, 142 |
| insurance product and rate 'ranges' or | | | | 90) |
| tables of acceptable pricing. Included | | | | 39. Nunavut: Insurance Act |
| in these prices are the costs of | | | | 40. Nunavut: Insurance Regulations |
| regulating the industry. These costs add | | | | 41. Ontario: Insurance Act (I8) & |
| up to billions each year. | | | | Regulations |
| In most areas there are hidden taxes, | | | | 42. Prince Edward Island: Insurance Act |
| usually around 2-5% of the premiums | | | | (i-04) |
| value that are paid directly to the | | | | 43. Quebec: Lois sue les assurances |
| government. Regulatory costs to pay for | | | | (A25..A32) et Reglements |
| the massive bureaucracy to manage the | | | | 44. Saskatchewan: Insurance Act (s-26) & |
| industry are added but never disclosed. | | | | Regulations |
| In non-state owned jurisdictions, car | | | | Canadian Insurance Regulators & Councils |
| insurance firms must pass on fees and | | | | 1. Office of the Superintendent of |
| regulatory costs to the consumer. They | | | | Financial Institutions (OSFI) Le Bureau |
| are never disclosed to the buyer. | | | | du Surintendant des Institutions |
| The consumer is being jerked around. | | | | Financieres (BSIF) |
| Another component of your insurance | | | | 2. Canadian Council of Insurance |
| price that is never disclosed to you? | | | | Regulators (CCIR) / Conseil canadien des |
| Fraud of course. In the US about $8 | | | | responsables de la reglementation |
| billion in car insurance fraud is | | | | d'assurance (CCRRA) |
| committed annually - with most of it | | | | 3. Alberta: Alberta Superintendent of |
| coming from highly regulated states like | | | | Financial Institutions |
| NJ or Taxachusetts. The more regulation, | | | | 4. Alberta: Alberta Insurance Council |
| the less competition, the higher the | | | | 5. British Columbia: Financial |
| rates, and the greater the consumer | | | | Institutions Commission of British |
| fraud. | | | | Columbia (FICOM) |
| Witness New Jersey and Massachusetts | | | | 6. Province of Manitoba: Consumer & |
| which had to use government power to | | | | Corporate Affairs - Financial |
| keep insurance companies in the state. | | | | Institutions Regulation Branch |
| Car insurers started to flee these | | | | 7. New Brunswick: Department of Justice |
| states for the turnpike to avoid massive | | | | - Insurance |
| car insurance fraud which was sinking | | | | 8. Newfoundland and Labrador: Department |
| their profits. Since most insurance | | | | of Government Services and Lands - |
| companies offer a wide portfolio [house, | | | | Insurance & Pensions |
| car, health, disability etc.] regulated | | | | 9. Nova Scotia: Superintendent of |
| jurisdictions have the power to force | | | | Insurance |
| insurance companies to abide by | | | | 10. Nuavut: Government of Nunavut |
| government rules. Keep in mind that many | | | | 11. Ontario: Financial Services |
| insurance firms do not make a healthy | | | | Commission of Ontario |
| return or market average profit on car | | | | 12. Prince Edward Island: Office of the |
| insurance [contrary to media reports]. | | | | Attorney General - Consumer, Corporate |
| According to Insurance bureau's in | | | | and Insurance Division |
| Canada and the US, on average only about | | | | 13. Quebec: Autorite des Marches |
| 15 % of drivers made a claim or were | | | | Financiers |
| accused of abusing the insurance system | | | | 14. Saskatchewan: Financial Services |
| last year. Yet this varies significantly | | | | Commission - Financial Institutions |
| depending on how much government is | | | | Division |
| involved. In British Columbia according | | | | 15. |