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