tag:blogger.com,1999:blog-5090403.post6784898800355264256..comments2023-09-07T04:24:11.648-06:00Comments on y-intercept blog: Health v. Auto Liability Insurancey-intercepthttp://www.blogger.com/profile/03389285761013186443noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-5090403.post-53239500312343693862011-04-19T00:24:33.121-06:002011-04-19T00:24:33.121-06:00PS: I edited the post to emphasize that I was talk...PS: I edited the post to emphasize that I was talking about auto liability insurance. <br /><br />In the version RD read, there was a garbled sentence where I started talking about the difference between liability and collision insurance. <br /><br />Liability (which has a wild data set) is required. Collision insurance (which is tamed) is not.y-intercepthttps://www.blogger.com/profile/03389285761013186443noreply@blogger.comtag:blogger.com,1999:blog-5090403.post-72122662226952814172011-04-19T00:13:01.872-06:002011-04-19T00:13:01.872-06:00RD, There is not an even cost cap to auto liabilit...RD, There is not an even cost cap to auto liability. I've been in only one auto insurance claim. In this claim, a kid stole his father's pickup truck and totaled seven cars in an afternoon of mayhem. The total cost of this incident was in the hundreds of thousands of dollars.<br /><br />It is not uncommon for an accident to run up millions in liabilities. Driving a car into a crowd could generate a million dollars in medical expenses.<br /><br />My guess is that you were thinking about collision insurance. There is a cost cap to collision insurance for the reasons you described. This insurance replaces at most one car.<br /><br />Collision insurance is not required by Utah State Law.<br /><br />As collision insurance is not required by law, your post does not explain why auto insurance is required by law and health insurance is not.<br /><br />Collision insurance, with its cap on costs is not required by law. Auto Liability and that really bizarre No Fault insurance are required by law. These are required by law because all accidents automatically go through the courts.y-intercepthttps://www.blogger.com/profile/03389285761013186443noreply@blogger.comtag:blogger.com,1999:blog-5090403.post-75402862479440197172011-04-12T19:55:25.511-06:002011-04-12T19:55:25.511-06:00"The primary difference between auto and heal...<i>"The primary difference between auto and health insurance is that auto insurance is for a liability that one incurs when driving a vehicle. Health insurance pays for personal consumption."</i><br /><br />No, the primary difference is the distribution within the dataset. Auto insurance costs having a fairly even distribution of costs through its dataset and a comparative marginal worst case cost cap, No insurance will pay to fix a car where the cost of fixing is higher then replacement.<br /><br />Where as health insurance has a very uneven distribution within its dataset and costs where they occur tend to be very very spiky, and unlike car insurance their is no cost "cap" where we opt to replace the person as opposed to fix them.<br /><br />The spiky nature of health insurances cost distribution is what breaks the private model of health care financing. The risk pool has to be huge enough to even out the number line enough to stabilise the premium price, while at the same time avoiding an adverse distribution between insurance providers in a multi provider market.RDhttps://www.blogger.com/profile/05610383135758813124noreply@blogger.com