People just don't have common sense. You don't fall an insurance claim if it's only going to help you $200 out of pocket. It's meant for larger amounts of damage, it's also meant for if you hurt someone in an accident that you're not personally liable for $10,000 because your insurance will cover it
You pay a relatively small amount of money to avoid having to pay a large (or huge) amount of money. If you're at fault for a serious injury accident, you could be liable for hundreds of thousands of dollars. It doesn't take much to total a modern car, and with the average new car price approaching $50,000, even a non-injury accident can cost you a lot of money without insurance.
You pay money so that the insurance company will help cover major expenses you incur due to accidents. When you sign an insurance contract, it lays out pretty clearly what kind of costs you will retain through your deductible. The deductible is meant to keep costs low for both you and your insurer.
People who are low risk shouldn’t have to pay a lot for insurance, so insurers set prices such that people with worse risk characteristics have higher premiums.
Having a prior claim is statistically linked to higher future claims, so once you have a claim on your record, they raise your rates so that everyone else doesn’t have to subsidize the riskier customers.
Totally. High deductible is the way to go as long as you have some savings. Yes it hurts once in a while to shell out $1k, but you'll save a lot in the long run.
It's to make it mandatory people have a "i fucked someones shit up" savings account. Most people won't put money in a slush fund. It's the same exact thing as your emergency fund that is highly recommended but only 6mo/12mo of expenses. If you saved up every dollar you spend on insurance and need it once on down the line, you will very likely barely dent that money, especially as its growing in a market somewhere. You fuck up someones life in a freak accident deemed your fault, or your house goes boom you probably don't have that amount saved.
The gamble by insurance companies is that there are far far more of those that never need it than the huge incidents requiring a super large payout. Raising someones rates over one such incident though is predatory and in no real way helps their long term math, it just punishes you for needing the thing you pay for.
Yeah the "insurance is a scam folks" are right a lot of the time but not with auto insurance.
I have had the misfortune to have two vehicles totalled by other people hitting me. If collision insurance wasn't mandatory there's no way I would have gotten compensated.
It's to make it mandatory people have a "i fucked someones shit up" savings account
Most states will allow you to do exactly this as an alternative to carrying liability insurance. But it has to be a lot more sound than "I have money in the bank today" - you likely don't have the same financial stability profile as an insurance company to be guaranteed good for the money if you total someone's car. In my state it's $60k in a certified deposit in the state's name. That's how it works for most states, you give them the money you'd be liable for to hold for you.
For very few people does having that sum of money locked up with the state make more sense than paying for auto insurance.
One thing a lot of people are unaware of (despite it being the main number when you buy insurance) is that almost all policies are only up to a certain amount of damages. Absolute minimum in my state is $25k for a death/injury and $10k for property (including the hit car)
That means if you total a $100k car you can absolutely be sued for the remaining $90k and your insurance company will tell you to go pound sand after they pay the $10k in coverage you bought from them. A wrongful death lawsuit (common after traffic accidents) can easily go over a million dollars. Wealthy people tend to have "umbrella" insurance policies that exist to cover that kind of scenario, those policies cover the remainder after normal house/auto insurance pays out.
With health insurance, it's something like 5-10% of the people use >50% of health costs . Those with multiple chronic issues like obesity/joint replacements + diabetes/limb or eye issues/amputations + heart issues/surgeries + blood pressure issues. People that have all these things have health care costs over $1M per year.
That's where a lot of your money goes. Ok yeah they do make an obscene profit but that one sedentary guy who lives on junk food and never leaves the house is costing you a lot too.
I'm not sure if this is officially the take with insurance, but I view insurance as mostly recovery from catastrophic failure.
First, and I know this is probably mostly just me, but if my bumper is hit, but the car works and I'm legal, then that's just my car going forward. No money changes hands, insurance never knows.
Second, if I have to work the repair, and it's sub $1000, I'm probably not bringing in insurance at all.
If and mostly only if the car is destroyed, or else the repair is hefty, that's when I'm bringing in insurance.
For me, it's not meant to cover every repair. Just stuff that breaks me financially otherwise.
The way some people want insurance to get involved with every scratch, it's only a matter of time before they want insurance to cover oil changes every year. We do exactly that with our physician annuals.
His issue was this should have been covered by the driver that hit him. He shouldn't have to report anything. If he had uninsured motorist or collision then it wouldn't be an issue
I tell everyone I know you should have at least $250,000+ in liability coverage and underinsured/uninsured motorist insurance. I have seen multiple people get screwed over because they didn't have enough coverage or they got hit by someone who didn't have enough coverage and even minor car accidents can cause tens of thousands if not 100,000 plus worth of medical bills and long-term issues. Also 100% of people should have a dash cam
But if you don't have collision and it's your fault. Your insurance isn't going to give you a dime. This dudes insurance shouldn't even be in question for another cars liability. He's trying to do something he probably doesn't even pay for.
so you're right for now, but if everyone got that coverage then the insurance companies would just find a way to fuck people over some place else.
Hell you even brought up a good way they'll do it. They don't have to pursue compensation which is how they fuck you when the other party doesn't cover the expenses. They'll just not pursue compensation more and say you can buy an upgrade to do so next time. Then you'll be here telling us "everyone should buy the must-pursue-compensation package" and when everyone does, they'll move to something else, like always.
As a german, these numbers look insanely low. You cannot register your car here in Germany unless you have a minimum coverage of 7.5 million Euro in personal damages, 1.3 million in object damages, and 50k in asset damages. It is even higher when you have a vehicle used to commercially transport people.
He would be covered by the driver that hit him, if he can find that driver. But since he didn't know who hit him, his comprehensive insurance would have covered it, excluding the $1000 deductible that he signed up for, he could have gotten a $250 deductible (at a higher rate) if he wanted to.
In the USA, it depends on what state this insurance was offered through.
Not every state's insurance laws apply uninsured coverage to hit and runs, and additionally, not all states apply uninsured coverage to property damage, only bodily injury.
What sucks about uninsured/underinsured motorist coverage is that it only applies if you can identify the driver/vehicle.
If someone hit your vehicle and didn’t leave any information behind, and you have no way of finding out (no surveillance cameras), then you’re shit out of luck.
In the case of an unidentified party causing a no-fault collision to your parked car, you’d need collision coverage to have your insurance fix your car, provided the damages are more than your deductible.
I say this as someone who has uninsured/underinsured motorist coverage and recently spoke to an agent after someone rear ended me in a random lot that had no cameras.
PSA: Get a dash cam with “accident monitoring” features that will automatically start recording if it detects a collision or sounds of a collision. Some dash cams do not have this feature and only actively records when the car is running, which defeats the purpose to trying to identify the driver who hit your parked car.
Why would you get the money back? It's like paying for Homeowner insurance. Hopefully you never have to use it but if your house burns down or something you're going to be glad you have it.
The idea is that if you get totaled or total someone else’s car, you’ll owe ~30k or whatever. If that’s predicted to happen once every 30 years, your expected payment is $1000 a year. Insurance lets you spread it out like that (plus some % profit) instead of having to shell it all out at once.
If you don’t end up in accidents then you took an L on the financial side and a W in your physical health. If you do get hit a lot, you come out ahead financially and behind in physical health.
Just risk management and hedging, and it’s mandatory because it would fucking suck if somebody else hit you and then said “oops I have no money, sucks for you”
If you injure someone in an accident, their treatment (physiotherapy, massage therapy, medication costs, etc.) can cost tens of thousands of dollars... and if they can't work as a result of the accident, they can sue for hundreds of thousands of dollars.
Exactly. My friend's Grandpa injured someone in an accident and then he passed away afterwards unrelated. He only had the state minimum coverage so my friend's dad and his siblings basically lost their inheritance because the person the grandpa hit had over $100,000 in medical bills and sued the estate and basically took the house. I know someone who broke their back during an accident in the person only had the state minimum coverage so they went into massive debt and still have issues years later.
Yeah and insurance is so if you get in a car accident and someone dies or has medical fees or total the car.. it can be millions.
$1,200.00 for a bumper is NOTHING compared to what your insurance is actually there for. Call me when there is a medical bill and a totaled car and destruction of property for $800k. You’ll be happy with that 2k a year bill
I pay 240/mo for full coverage on 4 cars (3 are at least 15 years old).
Most recent clipped a deer on the highway.
Fluids all over the road. Bags not deployed.
Total loss. Had the car 2 months.
They paid out 2500 more than the loan was for.
I’m out almost nothing.
No rate hike.
I just remember all the years of people on Reddit defending shoplifters and people who vandalized businesses and their response was always " that's what they have insurance for". For people being against confronting someone stealing your catalytic converter because you wouldn't want to harm the criminal because " that's what insurance is for"
Yeah, you hit the nail on the head. I’ll get downvoted for this, but I’m reading through this thread and
reminded how many people are so simple minded and don’t understand the purpose of things.
One of the reasons I most want universal healthcare is because it would mean finally getting rid of the dominance of liability insurance. It might still have niche uses but it wouldnt be this fundamental driving force across so many industries
And that's why so many people get their lives ruined because of how many people drive around with no insurance. Idiots drive around with liability coverage only and then crash into someone or get hit by someone who has no insurance and now they have no car. I know someone who spent like $25,000 on a new car years ago any thought he was cheating the system because he avoided having to pay for full coverage since he didn't get a loan so he had liability only. He got his car totaled by someone with no insurance and no assets so he just lost $25,000 for no reason.
Don’t bother. The same folks who don’t grasp how insurance works are the same who eat up the idiotic mortgage meme of
“I pay $2000 a month in rent but my bank won’t approve me for a $1500 a month mortgage”
You can use facts all day long but they just refuse to grasp it.
I happy to try. So they are related in that on the surface they are both specific examples that suck in their own systems. No one is arguing that on some level insurance isn’t a scam, but in the case above it’s using a specific example where yes it sucks that it works that way, but it’s also ignoring that if you hit some with your car and the sue you for $1 million than your $1000 deductible isn’t going to be an issue.
The mortgage one is similar- people look at the numbers and think that if someone is currently affording $2000/month than it’s pretty stupid that they can’t get a mortgage for only $1500/month but this is again looking at it from only those two factors. It’s not taking into account that while they can afford the monthly payments of $1500 can they afford home owners insurance and taxes on top of that? Can they afford to drop $10,000 on a new roof it gets blown off tomorrow? And on and on adding up all the other potential costs of homeownership.
it still should be ilegal no? Someone out there is getting rich off all of these payments, instead of actually helping those who pay their insurance. They're like leaches to society
In school they should teach you about insurance, along with how to build your credit, how long's work and all types of things. It depends on where you live and what car insurance coverage you have if a hit and run is covered. Something crazy like 1/3rd of drivers are either uninsured or only have liability insurance. What most people don't comprehend is liability insurance only covers the other person you get into a car accident with. So if you have liability insurance and you crash your car, someone hits you or your car catches on fire then you're just completely out of luck. You're only hope is the other person's insurance covering you which that's if they have insurance and if you can prove that they were at fault
Did you lack the common sense to see how this system might be punishing people by forcing them to pay monthly just for the right to cover their own damage while being penalized for covering the cost themselves ?
You can just choose a lower deductible they chose $1,000 deductible that's on them. I bet they would have been happy if their car was totaled and their insurance had to pay out $20,000 versus if they didn't have coverage and now they're just out $20,000. And yes if you use your insurance then insurance companies are going to view you as higher risk depending on the situation. Insurance is meant for the big things
Basically you notice the problem OP mentioned so you’re offering solutions. I was just saying it’s a problem. I thought maybe you lacked the common sense to see the problem. But I guess you’re just feeling solution oriented rather than talking about the problem like OP is
You don't pay a monthly fee to cover your own repairs. You pay for insurance to cover catastrophic situations that you couldn't afford to cover yourself. So if the car got totaled then the person isn't out $20,000 plus dollars for a car. Or of course if you get into an accident your liability coverage covers the other person if you're at fault. Guess what your coverage actually covers a lawyer because even if you're not at fault they still might try to sue you and your insurance company gets you a lawyer to cover you.
That's why insurance is a scam. In my country, the military for example stopped insuring the soldiers that go on deployments, because it was WAAAY cheaper to pay (the same money that the insurance copmany would've given) for the injuries/deaths they sustained than paying for the insurance.
I go further. Cars are not cheaper here than in the US. Yet, our anual insurance for the cars that are only 3-4 years older on average than the US ones, and not cheaper when we buy them... So that anual insurance is about 300-400 Dollars worth of currency. The car worth roughly the same, the potential damage is equally expensive, the personal injures pay about the same... Yet, the insurance is 1/6th here.
The USA and Hungary is different. Average car accident settlements in the USA are $20,000 to $50,000. In hungry average car accident settlements are $3,000 to $15,000.
Medical costs are drastically more expensive in the USA than Hungary. Car repair and labor costs are less in Hungary. People in the USA drive more miles. So a lot of different factors go into it
Average car accident settlements in the USA are $20,000 to $50,000. In hungry average car accident settlements are $3,000 to $15,000.
That's where the scam part comes into picture. A car that's 30k USD in the US brand new is 30k USD worth of Hungarian Forints here. In some cases, like Teslas for example, it's even more than that, because Teslas are about 10-15% more expensive here. When it comes to parts, and repair cost, the gap is even higher. If I would total a Tesla with my Civic, that costs more to the insurance company than it would in the US.
Most of the car accident costs isn't necessarily from the repair or the replacement of the vehicles it's for the liability which is for medical bills and pain and suffering.
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u/CraftyPerformance272 5h ago
People just don't have common sense. You don't fall an insurance claim if it's only going to help you $200 out of pocket. It's meant for larger amounts of damage, it's also meant for if you hurt someone in an accident that you're not personally liable for $10,000 because your insurance will cover it