Insurance at a Premium

Posted on by

insurance.jpg

I have one accident on my record after eight years of driving. It happened two years ago, while pulling out of a tightly-packed parking lot at the University of Waterloo. I turned my car ninety degrees to get into the driving lane, and I came very, very close to brushing the car on my left -- close enough that I stopped and looked to see if I was in contact. I didn't appear to be in contact, so I blew a sigh of relief and thought no more about it as I drove out of the lot.

Turns out, the owner of that vehicle was behind me somewhere, staring at me as I brushed, stopped, looked, and drove off. Not only did he or she see me, he or she saw that I'd left evidence behind (a black streak on the red back bumper). He or she must have been upset that I'd just driven off, for he or she then went and talked to the UW Police and filed a hit-and-run report. The police called my parents' home the next night.

Figuring out roughly what the call was about, I went to the UW Police, heard the complaint, relayed my side of the story, and showed them my car. The brush mark off my bumper was just visible. The police and I agreed that an accident took place and that I was responsible, but they were confident that I'd brushed the neighbouring car inadvertantly, and had not intentionally left the scene of the accident. They closed the case. They, and my insurance broker recommended that I contact the aggrieved driver and talk about some sort of restitution that could be handled without going to the insurance companies and thus bumping up my premiums. The aggrieved party never returned my calls, for whatever reason, and the matter was left to the insurance companies.

After Freddy, our faithful Ford died, I set about removing all of the related financial commitments, and received a nasty shock. I returned my license plate and got a refund, I set about cancelling my membership with the CAA, all of which went without incident. It was when I called my insurance broker and told them to cancel my insurance that I received a nasty surprise: she recommended, in the strongest terms possible, that I strip away collision and liability and most other coverages (leaving a $2 per month charge, compared to $60 per month beforehand), but NOT (repeat) NOT eliminate coverage entirely.

Why? Because that accident was still on my record. And if I closed my coverage entirely and then got a car and tried to get insurance a few months later, that single minor accident might be enough to deny my coverage.

In Canada, if one doesn't have automobile insurance, one doesn't drive.

So, because I brushed a car while turning out of a parking lot, I might not be allowed to drive again. As punishments go, that's pretty extreme; but insurance rates have been punishing of late. Student drivers are paying the price of a used car each year in order to insure the used car they'd just bought; excessively high premiums were significant issues in the Ontario and the New Brunswick election campaigns, the latter being enough to make the previously unbeatable Bernard Lord look very mortal indeed. Nova Scotia's attempts to control insurance rates were very much in the papers throughout our recent Maritimes trip. In the past year, insurance in Canada has become a very hot topic.

I would have thought this to be a purely Canadian phenomenon if I hadn't read this post by James DiBenedetto. Here, he talks about homeowner insurance companies in the wake of Hurricane Isabel and their somewhat heartless actions in the face of diving profits. Something is happening to make insurance companies more callous. It's not limited to cars, or to Canada.

The problem as I see it is that most insurance companies expect to turn a profit by making one fundimental gamble: that most everything will turn out to be all right. The clients, in turn, are gambling that things won't turn out all right: if you have an accident, or your house blows down, the money you've paid in small premiums is repaid tenfold by the insurance company. For the most part, things go all right for most people, and the premiums that people pay and never get back subsidize the payouts to the lucky, unlucky ones. Or, rather, used to.

Whether or not you believe in climate change or global warming, the fact is that the world is getting riskier. Unnatural or not, it looks as though we are entering a thirty-year phase of heightened hurricane activity in the Atlantic. Throughout Canada, our population is shifting to the cities and there are more cars on the road than ever before, in closer quarters than ever before, and at far higher risk of crashing into one another. People are moving into lowlands, earthquake prone zones and into the path of tornadoes, primarily because there is no other place for them to go. There are more people around, and with every newborn comes another opportunity for something to go wrong.

We've come to think of insurance companies as being responsible for us when things go wrong -- it's a prudent philosophy; one should always put something away for a rainy day -- but most insurance companies' first priority is to make money. If the world is getting riskier, and the ability to outpace that risk by investing wads of cash in stocks and bonds isn't available, then the insurance companies have no choice but to raise premiums and be increasingly stingy in what they pay out and who to. Unless we see a significant upswing in the stock market (most stocks are still below their 1998 highs), these pressures will continue to squeeze the insurance market.

If left to itself, the final outcome of this spiral is that insurance premiums will become too expensive for most people to pay, and more and more people will go without insurance. Alternately, the cost of paying out insurance claims will become too expensive for the insurance companies to handle, and insurance companies will go bankrupt. Either way, the free market dictates that we're left to the dogs.

But for Canadians, the option of opting out of auto-insurance isn't available. Legally, we can't drive our vehicles without first obtaining insurance. Because insurance is a legal requirement mandated by our governments, there is a sense that our governments are, to some degree, responsible for our insurance rates; this is why private insurance rates have become public election issues. You require us to drive with insurance, so you are responsible for making those rates reasonable. Parties that promise lower rates get votes.

As most insurance companies are for-profit corporations, they are unlikely to respond well to government regulation, especially if it comes in forms which limit their ability to make profits. The insurance companies of Nova Scotia are already threatening to pull out of that province and not insure Nova Scotians as the Conservative government responds to voter demands to legislate rates lower while keeping payouts high.

There are a number of good reasons why everybody driving a car in this province should be insured. You'll understand if, through no fault of your own, you're ever hit and hurt by an individual unable to pay you what you need in order to recover yourself and your car. But if insurance is a legal requirement, and if private insurance companies are unable to handle the regulations, then I see a good argument for setting up a public insurance program, either as a crown corporation, or possibly a non-profit co-op.

There is considerable benefit to society in paying out damages to those who have been hurt through no fault of their own. Most individuals do not want to see other individuals (or themselves) struck down by acts of God, and will want to help out. I am okay with helping to keep my neighbour insured, especially as he helps keep me insured. The free market used to be able to handle this, but now it is under strain.

I firmly believe that if the free market can provide the same service as the government as effectively and as humanely, then that service should be left to the free market, but the experience above, and the road map to the future suggests that insurance might be becoming a public good that private enterprise can't easily handle. And if private enterprise fails to provide a public good, then the government should step in. It's just prudent policy.


Night of the Luchadores

I finally got to see :Angel:'s Night of the Luchadores on my parents' videotape (we'd missed it because of our Maritime trip), and while it was the weakest episode of the season so far, it wasn't as irretrievably stupid as my father claimed it to be.

I think the problem with this episode was its tone; it was never sure if it was serious or silly, and I think it would have helped had the episode taken itself more seriously. Certainly if the scenes of Mexican wrestling had been filmed better, the overall episode would have been much better, but I still liked the story and the characterizations. Angel's shocking cynicism is examined once again, and somewhat redressed (possibly too early; this character flaw is something that goes well with the other obvious themes this season), and the scenes with the last Luchadore reunited with his dead brothers was well handled and somewhat sad.

What I think this episode should have been was more like Season 2's Are You Now or Have You Ever Been, which remains one of :Angel:'s best period pieces, wholly authentic to the 1950s and steeped in that decade's themes of paranoia and fear. Although Night of the Luchadores is clearly written with a love of Mexican wrestling, it has none of the same attention to detail which should have been key to establishing period and atmosphere. Neither the wrestling scenes, nor the bar scenes suggest Mexico or Hispanic Los Angeles, and the opportunities for the period moments to resonate with the episode's themes of heroism are lost.

So, overall, a failure, though not a complete waste of an hour of my time.

Interesting, though, that it was Holland (Lindsay and Lyla's boss from Season 2) who offered the last Luchadore his job with Wolfram & Hart. Good casting, too, since although we never saw his face, his build made me think of Holland. What's up with that, I wonder. Why would Holland offer a place in the evil lawfirm to "someone of your special abilities" and then hide him in the mailroom? Will this ever come up again? Will it possibly be related to Angel's renewed belief in the prophecies surrounding his name?


Angel Season 2 Misstep

Moving through Angel Season 2 on DVD, Erin asks me how I can possibly consider the fourth season of the series to be the best it's ever produced, and in the early part of season two, it's easy to see why she says this. At this point, the series is producing masterpieces like Darla and Reunion as the whole arc with Angel, Darla and Wolfram & Hart starts slow, and then rises to an intense cresendo.

But, after Reunion, the series enters the mid-part of Season 2 and loses its way. After Darla has been resurrected as a vampire, she and Drusilla get two episodes where they run amok on the town, and then face off against Angel. Angel, who has been descending into a very dark pit, emotionally, responds by killing the entire demon army Darla is assembling and, for good measure, luring Darla and Drusilla into a trap and setting them on fire. It is a shocking moment, but not the climax to their battle. Angel walks away to finish things another day, while Darla and Drusilla are left to comprehend the alarming message that Angel has given them.

And then the series embarks on three stand-alone episodes that pay only marginal attention to the deep pit Angel has dug himself into. Darla wouldn't reappear for another four episodes, and even the battle against Wolfram & Hart takes a hiatus. The one time Angel does go after the evil law firm, he uses tactics that would be more in tune with the lighthearted first season, not immediately after Angel has set two vampires on fire.

There are good episodes in this run (especially The Thin Dead Line), and the plot threads are picked up again afterward, but the momentum of Season 2 breaks at this point, and it's a jarring experience. From what I've heard, scheduling conflicts among the guest cast may have had a part to play. It was certainly the reason why the last four episodes of Season 2 drop the Darla-Drusilla thread entirely and take the :Angel: crew to the slapstick fun that is Pylea.

blog comments powered by Disqus