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Welcome to the Era of the $20k Family Car Insurance Bill

nytimes.com

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Re: Welcome to the Era of the $20k Family Car Insurance Bill

#51

Post by reaperducer »

toomuchtodo wrote: post #5
taylodl wrote: post #4

Distracted driving + expensive new cars = "crazy" premiums. We all pay the price when new cars are priced in the upper 5-digit and 6-digit range and a fender-bender costs $5K - $10K.

Automakers charge what the be auto market can support. They can limit supply to keep prices high. Used car market is limited by new car market sales. Structural demographics means there are less workers every year (auto repair labor costs). Costs are unlikely to decline.

Used car market is limited by new car market sales.

I think the used car market might be crazy right now.

When COVID hit and everyone was clamoring for used cars because new cars couldn't be made/imported, I took my wife's low-end car to CarMax for an appraisal. It was a fair offer, but I didn't bite.

All these years, and 25,000 miles later, I brought the same car back to CarMax a couple of weeks ago, and the appraisal was almost double what they offered the first time. This time I let them have it.

I don't see a lot of talk about used car demand anymore, but based on my experience, I think it's still high.

Re: Welcome to the Era of the $20k Family Car Insurance Bill

#52

Post by rozap »

lordnacho wrote: post #41
rozap wrote: post #24

The 20k price tag in the article is pretty clickbait-y. It talks about families with 4 kids, and, if you have 4 16-20 year olds all driving, the chance of a 20k bill is not far fetched. If someone wanted to make a bet with me that their 4 kids wouldn't cause >$20k of damage over a year, and I get $20k if they don't, I'm not sure I'd take that bet. We gathered a ton of quotes, and yea there are crazy prices at the end…

What about male/female? Are young men more likely to cause damage than young women?

There was less of a correlation than you'd think, almost none. But we also operate in states where it's illegal to discriminate on the basis of gender so it makes sense that this plays out in the data. So, important to note that we are gathering premium prices, which may not accurately reflect risk for particular subgroups due to regulation. So whether or not teenage boys are riskier than teenage girls would require a different set of data.

Re: Welcome to the Era of the $20k Family Car Insurance Bill

#53

Post by reaperducer »

gosub100 wrote: post #50
toomuchtodo wrote: post #5

Earlier quoted context omitted.

Automakers charge what the be auto market can support. They can limit supply to keep prices high. Used car market is limited by new car market sales. Structural demographics means there are less workers every year (auto repair labor costs). Costs are unlikely to decline.

> Structural demographics Is that an euphemism for "refusing to pay a livable wage"?

Maybe it means fewer people being born in car-producing and exporting countries.

Re: Welcome to the Era of the $20k Family Car Insurance Bill

#54

Post by legitster »

kccqzy wrote: post #37
legitster wrote: post #3

This article isn't very useful because it doesn't distinguish between liability and collision coverage. It doesn't matter how young the driver is, if you put them in a cheap small used car, you only need liability coverage which is pretty cheap.

Is it legal to put a young driver on their own insurance policy with a cheap small used car, while the rest of the family has a different policy with fancier cars and collision coverage?

That's how my family did it. You can even keep them all on the same plan, but you specify who the primary drivers for each vehicle when you set up each policy.

Re: Welcome to the Era of the $20k Family Car Insurance Bill

#55

Post by mdbmdb »

wcunning wrote: post #30

I have two vehicles, my girlfriend has another one, and despite living in one of the higher insurance premium areas in one of the highest insurance premium states in the country (Oakland County, Michigan), our total bill with full coverage and relatively low deductibles is around $7k/yr. A family with 4 cars total (two driving age kids, two parents with cars to drive to different jobs) should not be massively more ex…

wow $7k/yr for 2 cars. That's crazy expensive

Re: Welcome to the Era of the $20k Family Car Insurance Bill

#56

Post by reaperducer »

felizuno wrote: post #46
toomuchtodo wrote: post #10

Earlier quoted context omitted.

Disincentives a suboptimal transportation option. Price signals are important, just like making it expensive to own property where the risk is too high. Automotive ownership and transportation is likely to never be as inexpensive as it previously was. You will either need to pay the cost or live somewhere you don’t need a car.

Buses and trains don’t run 24 hours a day. I paid a premium to live a walkable distance to most things I do. We drive so little that I fill my tank once every 2-3 MONTHS. But when my four month old has a fever in the middle of the night I absolutely need my car or I would have to call an ambulance. SMH

You live someplace walkable that doesn't have Uber or a taxi service?

Since walkable areas are often near a hospital, it's probably faster than an ambulance.

Re: Welcome to the Era of the $20k Family Car Insurance Bill

#57

Post by tredre3 »

silisili wrote: post #39

I keep reading about ridiculous insurance prices the last few years, but it seemingly never affects me. Do most people tend to get lots of moving violations and in accidents or something? I have two vehicles, mid range limits, one brand new with full coverage, and one a bit older with liability, and for two drivers the bill is around $1200 a year. I know kids of course get a higher rate, but even so, $20k seems a bit…

That's because no single person is paying 20k in insurance for a car. The 20k quote covers 6 cars driven by 6 people with a dodgy record.

> Leah Carter, a mother of four in Merrick, N.Y., sent me 60 pages of documents that she and her family were trying to make sense of after their annual premium with Travelers Insurance roughly doubled in the space of a year or so, to more than $21,000.

> They added a fourth child and a sixth car to their Travelers policy this year. None of the vehicles are fancy. There had been a few moving violations, including at least one that was her husband’s responsibility.

Re: Welcome to the Era of the $20k Family Car Insurance Bill

#58

Post by tastyfreeze »

lordnacho wrote: post #41
rozap wrote: post #24

The 20k price tag in the article is pretty clickbait-y. It talks about families with 4 kids, and, if you have 4 16-20 year olds all driving, the chance of a 20k bill is not far fetched. If someone wanted to make a bet with me that their 4 kids wouldn't cause >$20k of damage over a year, and I get $20k if they don't, I'm not sure I'd take that bet. We gathered a ton of quotes, and yea there are crazy prices at the end…

What about male/female? Are young men more likely to cause damage than young women?

Yes, young men are twice as likely to get in an accident than young women. On top of that young men are 7 times more likely to get in an accident that all men. Unsurprisingly the data does support higher insurance premiums for young drivers.

https://crashstats.nhtsa.dot.gov/Api/Public/Publication/8134...

Re: Welcome to the Era of the $20k Family Car Insurance Bill

#60

Post by pushcx »

lordnacho wrote: post #41
rozap wrote: post #24

The 20k price tag in the article is pretty clickbait-y. It talks about families with 4 kids, and, if you have 4 16-20 year olds all driving, the chance of a 20k bill is not far fetched. If someone wanted to make a bet with me that their 4 kids wouldn't cause >$20k of damage over a year, and I get $20k if they don't, I'm not sure I'd take that bet. We gathered a ton of quotes, and yea there are crazy prices at the end…

What about male/female? Are young men more likely to cause damage than young women?

The National Highway Traffic Safety Administration has excellent data available on this and similar questions, start with Table 62: https://cdan.dot.gov/tsftables/tsfar.htm
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