Because it's a competitive market and offering a lower price than your competitors helps you earn more business. If your competitors lower their prices and you don't lower yours then you'll lose business.
This is a wildly optimistic view for insurance companies in particular. You basically need to jump providers every few years, or else you're overpaying.
I don't understand how this is supposed to be an argument against what I'm saying. The fact that you can shop around and get a better rate demonstrates the fact that insurance is a competitive market and companies will lower rates to win business.
Or they could all just agree to not cut prices so everyone profits more than with a race to the bottom. Not the first nor last time for this to happen.
Undercutting the competition pays off when they're much smaller and you can eliminate them that way and subsequently raise prices.
They could. It's very hard to enforce a cartel like that when there are a large number of competitors. It's a prisoners' dilemma with dozens or hundreds of participants. It only takes one defector to break it.
If you've ever shopped for car insurance, it should be pretty clear that there isn't a cartel holding prices high. Prices differ substantially across insurers, and are influenced by many other factors as well. Premiums are much lower if you have a clean driving record and no claims, or if you drive a car that's cheaper to repair, or less likely to cause injury, or you're of an age/gender with less propensity to crash, or live in an area with less automobile-related crime. Why would they give you lower rates for these things when they could just keep the premiums high and collect more profits?
It's optimistic to think it will even do anything to stop drunks. It's a $5 wrench problem. They think all this tech will stop drunks, when in reality some guy gorded out his mind on vodka is paying his 12 year old his weekly $20 allowance to blow into the machine.
To be fair, it's not about blowing into the machine, but a bunch of sensors all around the driver, e.g. looking at the finger pressing the button to test your blood alcohol content through your skin, detecting alcohol particles, etc. So you better hope your passenger isn't drunk LMAO