YOU ARE ABOUT TO LEARN A WAY to make a change in an industry that has long been in favor of a few élite in our society.
This blog presents ideas that can benefit everyone who drives a car. Please read on.
SURELY EVERY DRIVER IN THE WORLD knows about car insurance — how important it is and how expensive it is. What most people probably don’t realize is that insurance is a gamble — a psychological gamble in a double jeopardy fashion. The insurance company, i.e. the CEO, collects your money (premium) now, betting on the chance that you won’t get into an accident and therefore wins your money. You on the other hand, scared by the prospect of getting into an accident, will pay now so that the CEO will pay, instead of you, for damages you cause. The CEO don’t want you to get into an accident and so do you. Who wants to get into an accident anyway? So then you’ll do everything in your power and ability to drive safely, not taking any risk. No one wants accidents. That’s where the gamble is. But if you are a safe driver, do you realize that the odds are grossly against you? So, in effect, you are betting your money on the side of the CEO, and, like it or not, against yourself — a double-bladed sword against your bet.
But let’s not kid ourselves. Accidents do happen and can happen to anyone — safe driver or reckless one. Insurance companies use statistics of accidents to scare us. And we should be scared. The problem is you only hear the bad news. You’ll never ever hear about good news; for instance a comparison in numbers of drivers with serious or fatal accidents and drivers with only minor fender-benders, not to mention drivers with no accident at all. Think! How long have you been driving? Months? Years? Decades? How often have you gotten into an accident? Every day? Every month? Every year? If that were so, it’s a miracle you defied death, afford the premium and even more mysterious is who or what insurance company would sell you a policy. But that is far from reality, of course. You are not that kind of a driver. Fact is, a huge percentage of drivers, locally, nationally or even internationally are safe drivers. How do I know that? Again, you only hear bad news. No accident is no news.
On another view, in a city, big or small, where thousands upon thousands of vehicles cruise every street, highway and freeway everyday, have you seen hundreds of accidents every single minute, every single day, in every single city? If that were so, all insurance companies, big or small, would either raise premium rates sky-high or they’d go belly up real quick. But again that’s not reality. Reality is that these companies are immensely doing great. How do I know? Watch their ads on tv! They’re spending millions every single second everyday! They are fiercely competing, wooing for our business. Why? Because the car insurance industry is a lucrative, profitable business and we, the drivers, are faithfully and blindly making them rich. We have no choice. There is no other choice. We do our best to be accident free — that’s what the CEO wants and so do we. Now think. At the end of our driving life, when we can no longer drive a car due to old age or ailment, who collects the bet? You know who, but it’s not you.
It is comforting to be accident free. It’s better if it is rewarding too — like getting some if not most of those premium monies we’ve paid the CEOs for practically three-quarter of our lives.
So you see, the insurance industry today is a humongous gambling institution sanctioned by the government much like the lottery or the casinos in Las Vegas. Truth is, the lottery and casinos are a better proposition because you can actually win. In the car insurance gamble, you will never ever see a single winner. The only winners are the CEOs and their shareholders. You do not consider yourself a winner when the CEO pays for your accident. That’s only fair! But then he turns around and raise your premium big time! You then either pay his price or he’ll kick you out.
Almost every insurance company today boasts about saving you big money but when you go get a quote, it’s still an arm plus leg, …for crying out loud! They use ridiculous factors such as your zip code and your credit score to pad up your premium. How in the world would zip code or credit score causes accidents? When an accident happens in a bad neighborhood, ie, zip code, is it because of the zip code, or the driver? When one gets into an accident in a good neighborhood, does the police cite the driver because he has bad credit score? Baloney!
Do you wonder what kind of salaries the executives of these giant establishments are pocketing? Six digits? Seven digits? Do the reasearch. Oops…, not to mention their just as ridiculous bonuses! Where do you think the dough is coming from most? Yes, you and me — millions of us. Chances are they might even have their own cars insured for free. And who pays for it? Again, millions of us poor drivers. Well, if they indeed pay for their own car insurance, then I’m wrong in that regard. But if I’m right, how do you feel?
Is there a way we can turn this lopsided table around in our favor? That’s my quest, my crusade. Join me. By the way, notice that I am not citing any official statistics or research by some high profile establishment. I don’t have to because everything I’m saying are all common sense – common knowledge, you see ’em, you hear ’em everyday. Please read on.
Let us look further into the basic practice of today’s car insurance business. We insure just about anything of value we possess for fear of loss. Most are reasonable, some are just unnecessary expense. A car is of course a valuable property. We insure our car, or cars. If you have more than one car, each one of your cars carry insurance to cover against liability, loss and whatever else is spelled out in your policy. We even insure somebody else’s car that has less coverage or no insurance at all (which is funny to me). But then again, we insure because accidents do happen. That’s the main reason, in fact the only reason. It is protection.
So, your car is insured, meaning the car carries insurance. Whatever damage happens to it whether you caused it or someone else did, the insurance pay. Or should pay. Oftentimes, you still have to pay– it’s called deductible. Another CEO invention to me. But wait, … ask this question: does the car causes damage to itself? No! The question then is… what or who causes accidents, the car or the driver? Should we even debate that? Well, on second thought, yes that’s debatable; for instance the brakes fail, or a tire blows, or some mechanical/electrical malfunction occur while you are in the heat of traffic at high-speed. I can’t blame the driver for that. But, the good driver knows what to do in such situations and he knows his car — he maintains it in good condition. Yet again, I’d say most car accident is caused by driver fault.
IDEA ONE: DRIVER INSURANCE (not car insurance) – A NEW CONCEPT
What is “Driver Insurance?” Driver Insurance is just what the name says – you are “ensuring” that your act of driving is safe, and that you are liable (insured) for damages if you happen to cause an accident while driving a vehicle. I can’t put it any clearer than that. I said ‘your act of driving is safe’ and that means you know the laws of traffic and you obey them. You give heed to the road signs. You are mindful of the weather conditions. You know the limitations of your machine. You know the laws of motion–this is one important factor for safe driving that is often violated – it leads to lose control of the vehicle and the result is almost always deadly.
One characteristic of Driver Insurance, which you will soon find out is that it is an “individual insurance”.
With driver insurance, a driver can drive any car and that car is covered for insurance purposes. Therefore, if you own two or three or dozens of cars, you don’t insure all of them — they are ALL covered under your driver insurance. Of course if you have that many cars, you can surely afford to buy today’s insurance system. No problem.
But why driver insurance and not car insurance? Glad you ask, …okay, can you drive two cars at the same time? Huh..? You drive your Pinto to work and your Mercedes will sit in the garage. If you want to go on a pleasure drive, you go out in your flashy car and your workhorse sits in your garage. Cars in the garage are not likely to get into an accident; the one on the road may! To extend this idea of driver insurance, you can borrow your friend’s car or lend him yours and no one worries about insurance because the driver, with a driver insurance, automatically assume liability on the car he drives whether owned, borrowed or rented. Driver insurance is primarily liability insurance with all the other types of coverages of conventional insurance as optional.
We are very much concerned about motorists driving uninsured cars because “hit-and-run” accidents are prevalent. The problem is, one can get a driver’s license just by passing some tests. There is no other requirement. You are not required to have a car. So, once you get a driver’s license, you are free to drive a car, yours or not, insured or not.
With the driver insurance concept, the Federal Government could mandate driver insurance as a requirement for obtaining a driver’s license. That way, all Motor Vehicle Divisions nationwide will not issue or renew driver’s licenses without proof of driver insurance. No one dare drive a car without a driver’s license. This, I’m sure, will vanish our concerns about hit-and-run accident by an uninsured or underinsured motorist. Sure there are hard-headed people who’d still drive a car without a license — but that is like operating a business without a business license. Sooner than later your door will be padlocked. In the case of driving, you’d go straight to jail at first offense — and you don’t get out until you get your driver’s license which means you have driver insurance. That’s harsh you say? Well, that’s to prevent you from being run-over and left for dead by a driver without insurance.
IDEA TWO: MONEY BACK — THE BEST INCENTIVE TO DRIVE SAFELY
There is no better way to reward a good driver than to give him his money back after his driving life is over. I repeat — THERE IS NO BETTER WAY TO REWARD A GOOD DRIVER THAN TO GIVE HIM HIS MONEY BACK. Period. How else can you put a big smile on his/her face than a tidy sum of money in his/her bank account when he/she needed it most? HE has invested in his future by being a good and safe driver. SHE has invested in her future by being a good and safe driver. THEY should be rewarded after they’re done with driving. Don’t reward the CEO!
Maybe you know somebody, as I know my father who drove for about fifty years, paid an average premium of $500.00 a year and had no major accident. He would have had at least $20,000.00 in his own pocket when he stopped driving due to old age. Even in today’s economy that would still be a good sum of money.
If a teenager today starts driving at age 16, have a driver insurance, survives the teenage mania, matures and have a good driving history, paid an average premium of $1700.00 per year, how much would he have at retirement at say, age 70? Imagine that, that teenager had no claims at all. A simple calculation will give him a good $85,000.00 (to arrive at this figure, you need to follow the premium allocation described below). Imagine again that his money earned interest at even a very low rate for 50 years. You get the picture. It’s like having a second Social Security benefit, don’t you think? Yes he can cancel his membership and withdraw that money at any time. But why do that when you are actively able to drive?
So is there a company today that offers money back guarantee? I don’t think so. They’re all out there to make a killing. There may be one or two that give a minimal part of your premium, called discount, but then they’ll take it back later – count on that.
IDEA THREE: A NON-PROFIT ORGANIZATION
To win the insurance gamble, let us pool ourselves and form a non-profit organization – this is the only way we can turn the tide in our favor. The following is a plan I believe will be effective to bring realization to this goal.
As I have described earlier, it is driver insurance, not car insurance. Therefore it is an individual insurance. You do not include your spouse or your teenagers in your policy. They will have their own policy — after all, in due time, they will collect their own money too. However, one payor can pay the premium for all in the family, if that’s the case, and the total amount will then be allocated according to each individual rate and according to the allocation procedure as explained below.
Premium is allocated in two categories: the “common fund account” and the “personal fund account.” Your first annual premium will go to the common fund account. On your second year, 75% will go to the common fund and 25% will go to your personal fund account. The third year will be 50/50 and the fourth year will be 25/75. On your fifth year, 100% of your premium will go to your personal fund account and it is here where you build up your fund for your future benefit.
If in any year of your membership you have an accident where you are at fault, your personal fund account is drawn from first and if it’s not enough, then the common fund kicks in. You will then have to start over. However, the premium allocation is accelerated in the following way: first year – 100% to the common fund; second year – 50/50; third year – 100% to your personal fund.
Your personal fund account will also have the function of comprehensive coverage such as collision, property damage (other than cars), roadside help, towing, windshield glass, etc. You have the option of using your personal fund account or not. But any way you look at it, whether from your own pocket or from your personal fund account, it’s still your own money. Remember, this is only when you are at fault. If you are not at fault, your damages are settled through the common fund and nothing comes out of your personal fund account.
PREMIUM is based on your driving history and the type of car you own. If you own more than one car, your premium is based only on the most expensive one and you don’t pay a single cent of premium on your lesser value car or cars. These are the only factors to be used to determine your premium rate. I don’t ever believe that zip codes, credit scores, and whatnot, would get you into an accident.
MEMBERSHIP is open to all with a valid driver’s license. Remember that if you have a driver’s license, you have Driver’s Insurance. A minimal membership fee and the first annual premium is paid upon enrollment. Membership is lifetime. You can not be cancelled by the organization for any reason other than non-payment of premium. You can, however, cancel your membership voluntarily. There is a forced termination of membership for reasons of incapacitation to drive, move out of the country, or death. All reasons of forced termination qualify for the money back guarantee provided there is fund left in the member’s personal account. Every member will know the status of their account as they will be given a record or a “passbook” similar to a savings account passbook. Paying your premium is as easy as going to the bank to make a deposit to your savings account — which is literally true once you pass the first four-year membership. Remember though, that the fund in your personal account is still insurance money which you can not withdraw or borrow from. The only time you can put it in your pocket, as mentioned above, is by voluntary cancellation of membership, or by any of the forced termination reason.
The type of insurance to adopt can be a MODIFIED NO-FAULT insurance. The basic premise of a no-fault insurance as practised by some States may be adopted or modified to agree with the concepts described above.
At this juncture, nothing is chiseled in stone. All new organizations undergo refinements of policies, figures, rules and regulations in the establishment stage.
FELLOW DRIVERS, I have laid out the basic concept of my crusade. This calls for a united effort. Let us bring ourselves together and form a non-profit organization. I know that the government heavily regulates the insurance industry. In my view, this concept will pass for a non-profit organization for the purpose of insurance. The idea is clear — money back is the best incentive to drive safely. We have a plan that guarantees and enable us to win the insurance gamble — our hard-earned monies back to us.
The trumpet for “change” is loud and clear in every election year campaign. Today, it’s still political wranglings — politics as usual. It is up to us, you and me, millions of us to make a change starting here on the auto insurance industry. We either continue contributing to the coffers of the big profit monger companies we have to deal with today, or we stop and start building our rewards for driving safely. It is a daunting task, I know, to organize a large number of people to cause our government to convert an industry to a better system. It is NOT IMPOSSIBLE. IT CAN BE DONE! WE CAN DO IT!
Needless to say, you do not cancel your policy as yet. This is a long journey.
Meanwhile, please help spread the word. BE A CRUSADER! No one can do this alone. I call on people, knowledgeable people on establishing such an organization — you will be part of history for generations to come. You may contact me via email: firstname.lastname@example.org.
Thank you and I welcome your questions/comments — pro or con.
(Please visit my new blog at: http://myfutureworld.net)
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