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Comment by rapatel0 | Hacker News Reader

Makes me wonder why I pay 2600/year in insurance

Wouldn’t that be part of “costing Americans”, even if it flows through insurance premiums?

Also, my maxed out liability only insurance for 5k miles per year is ~$50 per month, $600 per year.

For an extra $2k per year, I assume you have significantly more comprehensive/collision coverage, miles, and/or prior incidents on your driving record?

For some savings, I always tell people to drop personal injury protection or reduce it to lowest legal amount if you have ACA compliant health insurance, since your healthcare costs would be covered by health insurance anyway.

As a point of reference, I pay around $140 a month for home insurance and comprehensive auto insurance. But I’m older and haven’t had a ticket in 15-20 years. Western US, if it matters.

I also have no tickets in 15+ years, and also western US in a suburb.

Zip code plays a huge part in the cost of your insurance.

Does this hold true for liability only insurance?

Should be true. Insurance costs depends on probability of the accident, which is not the same for different cities.

Right, but I would have thought liability has a lot more to do with the person driving than where it is being stored?

The very nature of vehicles kind of means that the liability can be incurred very far away from where the owner lives.

For collusion and comprehensive coverage I can appreciate why zip code matters

Need to account for the fact that not all Americans drive.

To get to the $1,035 per person they have taken the total cost ($340B) and divided it by the population, but if you divide it by the number of drivers (i.e. people actively insured) then you would get a bit closer to $2600.

I assume that some $2600 policies have multiple drivers too.

But that doesn't account for deductibles.

I'm not sure reading the article, but I think this $2600 may not account for deductibles (or self-pay):

> The study calculated the total societal cost of car crashes, borne by every American, not just those directly involved in car crashes.

Parsing this, and making the assumption, the $340 billion is the distributed cost ("borne by every American"), while the deductibles would be singular costs (borne by "those directly involved in car crashes").

I'd need to see the actually study though.

We would also have to account for profit (let’s say 3%) and all overheads (let’s say 15%). Average car insurance charge is c$2000 so we can say $380 of that is probably overhead and profit.

That leaves $1,640 left. $340B then divided by the number insured (230m) would be c$1,500 so with these very rough numbers there isn’t too much of a gap.

Multiple factors may lead to you paying more than the average:

1. Not all Americans have cars or drive.

2. Each state has different legislative structures which impact payouts and medical costs. Some states cost more than the average per accident, some cost less.

3. Your risk may be higher than average

4. You may drive more or less miles than average

5. Your choice of car makes you more or less risky

The company has to pay their labor expenses AND profit. Not just cover claims.

In various jurisdictions, your insurance company may bear the cost of accidents irrespective of “fault.” Thus joining an insurance company with a lower-risk pool of drivers does not necessarily reduce your insurance premiums.

Minnesota, for example, is a "no fault state", meaning that if you are in an accident and are injured, you must have personal injury protection as part of your insurance package, or you will pay out of pocket.

Conversely, just across the border, Wisconsin is a tort state- meaning that liability is determined based on who is found at fault, and you recover your damages from the liable party. Generally speaking, if you have personal injury protection and / or comprehensive coverage, your insurance company will pay you and go after the other party (or other party's insurance) on their own.

Insurance companies in both types of states will favor drivers with clean records, but tort states tend (in my experience) to have lower premiums for good drivers.

Either way, minimum liability coverage as determined by law isn't really sufficient if you want to drive. Comprehensive coverage is the way to go.

Depends on the value of your car, and maybe how many miles you do a year, so it's hard to say.

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