[tnmom]

(Nearly?) all states already have liability insurance requirements, and they already scale with real-world injury probabilities.

Those events just aren't as common as HN believes, so the driver of a KillMax HighBumper 9000 doesn't pay much more in insurance than the driver of a Civic.

[nrook]

I do think insurance is probably the right tool if you want people with more dangerous vehicles to have to pay more. However, the limits are too low. I live in New York, which requires insurance of up to $50,000[1] for the death of a person involved in an incident. However, most lives are worth more than $50k. If the requirement was insurance up to $10 million here instead, you would find the safety of cars constraining the market a lot more, and people wouldn't be able to get away with the kinds of externalities they do now.

[1] https://dmv.ny.gov/insurance/insurance-requirements

[kube-system]

The problem is that the country is dug too deep in a hole where driving is cheap, communities are sprawling, and public transport is a luxury. If a state actually mandated $10m liability, we'd probably see skyrocketing rates of uninsured drivers as a result. Or at least, skyrocketing more than they already are.

[paulryanrogers]

Worse, public transportation is seen as poor people's transportation.

[rufus_foreman]

>> If the requirement was insurance up to $10 million

Hardly anyone has assets of $10 million, so they do not have the assets to insure. Many people do not even have assets of $50k, so again, why would they need insurance? If they get a judgement against them for $50k, they are bankrupt. That's what bankruptcy laws are for.

If your life is worth $10 million, you need to be the one to insure it for $10 million. Not the working class person who has no assets.

I see forced purchases of insurance for people with nothing to insure as similar to debtor's prison. Obviously not as extreme, but the same concept.

[btasker]

> I see forced purchases of insurance for people with nothing to insure as similar to debtor's prison

That's probably because you're looking at it entirely wrong.

The third-party cover in insurance is not for you (the driver), it's for the poor sod that you turn into a pavement stain.

If you kill them, their family has had someone taken away from them - would you be happy with $50K for the loss of a spouse?

If you don't kill them, but inflict life-changing injuries, the resulting lifetime healthcare costs could easily be more than $50K.

When you take to the road, you do incur some risk, but on average you pose more of a risk to others, particularly if you've chosen to drive a car that you can't see in front of properly.

The UK introduced compulsory third-party cover in 1988. Even back then, the cap was £250,000 - it's not led to any societal problems (although, the accident rate in the UK is far, far lower than in the US so policies probably are going to be cheaper).

I do agree, though, that 10 mil is definitely pushing it a bit far.

[rufus_foreman]

>> would you be happy with $50K for the loss of a spouse?

If that was an issue for me, I would make sure that I had the appropriate level of insurance for that event, rather than relying on the hope that some random driver on the streets where I live would have the appropriate level of insurance. Many of the drivers where I live have no license, the cars they are driving aren't registered, and they have no insurance.

That's a law enforcement issue (they don't enforce laws here either), not an civil one. The insurance thing is my responsibility.

[coremoff]

Is that a case of missing externalities? The person who pays in this case is the pedestrian, and the courts do not seem to value pedestrian lives the same way that they value someone's ability to legally drive - that must drive down premiums because what is lost is not repaid.

[tnmom]

No, liability insurance pays out your _liability_ for pedestrian's medical bills and/or death caused by you. That's the point.

[somerandomqaguy]

.....? Liability insurance to offset the costs done to others. You hit a fence or a pedestrian, the liability insurance is meant to cover the costs of repair or medical costs.

Damages to the car and driver are either covered under separate provisions of insurance or come out of pocket.

[kube-system]

But they really don't. The liability limit requirements in all states are way too low to cover even a single pedestrian injury of moderate severity. Michigan has some of the highest requirements with a $50,000/person liability and this has resulted in more than a quarter of drivers simply driving without insurance because it is so expensive.

If you get run over by a car in California and you're lucky enough to get hit by one of the 83% of drivers that has car insurance, and one of the ~90% of drivers who stop for an accident, the insurance company is required by law to provide you $15k in coverage for your injuries.

[tnmom]

Why the downvotes? Insurance is one of very few industries that truly has incentives to price their product correctly. If I can get liability insurance on my Civic for $30/mo, or an F250 for $35/mo, there is a _clear_ incompatibility with the risk level assessed by HN vs. the risk level assessed by professional insurance actuaries with many decades of data.

[amluto]

Not quite. The statutorily required minimum liability coverage is quite low, so when an oversized car kills a pedestrian, the insurer is likely pay out $100k, which rather understates the true cost to society and to the dead person and their family.

[kube-system]

The disconnect here is that insurance companies don't price in the full risk to kill or injure someone. The price in the risk up to the policy limits, which by law, are only required to be a paltry sum.

There aren't any insurance companies that will even write you a car insurance policy that will cover the potential costs for a very serious injury. It is too risky for them. Heck, the maximum coverage you can even voluntarily buy in the US is lower than the minimum requirements in some other countries. Some countries require millions or tens of millions in coverage, some require unlimited liability. In most of the US many insurers won't even let you voluntarily buy more than $250k/person, and are only required a tenth of that.

[amluto]

Every US insurer I've every spoke to will do it if you say the magic word "umbrella".

(Seriously, it's quite magical. A high-limit umbrella policy plus a minimum-limit homeowners' or renters' policy and minimul-limit auto policy is generally less expensive than moderate-limit policies without the umbrella.)

[kube-system]

Even many umbrella policies max out at $5m, which is still below the car insurance minimums required in much of the EU.

The reality is, in many parts of the US, half or more of drivers have minimum coverage or zero coverage.

[TimPC]

You can kill someone and pay a max of $50k. That doesn't even cover 1 years salary for the person you killed in most cases. The insurance is mispriced because the liability is artificially low.