Risk equalised motor insurance

Shep Smythe

Cantab. wrote:

Seeing as we now have risk equalisation in the health insurance sector, why not apply the same logic to motor insurance?

Just like the way younger people subsidise older people's health-care costs, should older people subsidise younger people's motor insurance costs? Is there a discrepency in the consistency of government policy-making?

Legend.........


SS

phantom_lord

Gurgle wrote:

No, the first thing the government should do is cancel the license of everyone who never took the test and make them do the theory test before they get their 'first' provisional. That should get a good big batch of dangerously old people off the road.:D

The second thing they should do is have a mandatory re-test every 10 years.

That might work, but the problem is that they haven't got enough testers to deal with the demand at the moment never mind if everyone had to do it every 10 years...as soon as you get the test you'd be on the waitinglist for the next one...

The third thing they should do is actually enforce at least some of the traffic laws.

Hmm...wouldn't they need some of those extra 2000 gardai they promised in order to do that? It'd be much easier to just do a bit of revenue collecting with speed cameras....

LostinBlanch

ronbyrne2005 wrote:

why is risk equilisation so bad in the health insurance industry ,when theres a transition from state monopoly to fully free market some regulation is needed for short term to avoid likes of bupa cherry picking and thus making a fortune in the early years of fully open market.

Well apart from the fact that risk equalisation in the health market in Ireland is designed to perpetuate a state owned monopoly which is not prepared to change it's practices to become more efficient to match it's competitors. VHI has 80% of the market and will not bring down premium prices if/when risk equalisation comes in. For more info read the whole thread:

http://www.boards.ie/vbulletin/showthread.php?t=2054866486

If this happened in car insurance circles there would be absolute uproar.

Spacedog

basic model for calculating risk for a re-insurence company:

calculate cost risk --> double/treble it --> cover risk for insurence company --> add on profit margin --> sell to customer.

basic model for large claim against a re-insurence company (e.g. property insurence during a hurricaine):

non-payment, send lawyers to dispute amount payed (e.g. "that not hurricaine damage, that's flood damage, we didn't cover that), eventually settle for a lower amount. insurence company goes out of business and is replaced by a new company or a "competitor" covered by a similar or the same re-insurance company.

The house always wins, insurence is an industry that badly needs to be nationalised for it to be fair, at the very least should be implemented by a community based system like the credit unions.

In the case of car insurance where it is illegal not to have it, we are all essentially forced to pay huge profit margins to insruence bigwigs with no alternative (for the true profit margin of car insurence, get a quote online from a british or american insurence company and compare the diffrence. Are irish people more incompitent on the road than a 15 year old american kid?)

If you agree with me you're a communist