I live in Ontario, with the highest car insurance rates in North America. Luckily for me, I don’t drive. If I were to drive, my insurance premiums would be more than 4000 dollars a year, or 400 dollars a month.  Here are the facts. Toronto is an extremely dangerous place to drive. In BC, premiums for me would be a quarter of what I would pay in Ontario. If I were to drive an old car worth 4000 dollars, my insurance premiums would account for 100% of the cost. If I were to drive a new car, such as a Honda Civic, insurance would pay for a new car every five years. It is real. We pay more to cover the cost of damages in the small possibility that a car is crashed than the value of the car itself. How have we come to this point?

How car insurance came to be

A long time ago, roads were not built for cars. Travel to any city in Europe, and you will see people, and bicycles on the roads. The auto industry was successful. They got the government to pay for roads for cars. These roads are expensive. When cars travel on roads, they inflict a lot of damage, and the roads must be repaired often. When cars crash, roads must be rebuilt. This is why roads are expensive. If you had built all these expensive roads, how would you make sure that the drivers who damaged your roads pay for the damages that they inflict? 

What is car insurance really for?

We have forgotten why the government wanted mandatory car insurance. It was their idea. They needed money to pay for their expensive roads. It was supposed to be a tax. Ask the Germans: In Germany, car insurance is not meant for your protecting own car. It is to pay for other people’s cars in case you crash into them. And in the case you kill them, it is to pay their widows. We have forgotten. It is not meant to cover yourself. It is meant to cover other people’s cars that you damage. It is meant to cover the roads that you damage.

The bull of society

What follows is a mind blowing exercise. So really try to think. Name out loud all the killing devices you can think of. Guns. Bombs. Knives. Poison. How many things in our world are capable of causing instant death? Rattlesnakes. Tarantulas. Add up all the deaths that are caused by these killing devices. Do you still think the automobile is innocent? 100 years ago, people would think you were crazy if you used the term “accidental death”. If it did occur, “accidental death” was always inflicted upon oneself. How far has our society progressed where accidentally killing others has become OK?

Should car insurance cover this?

We have forgotten. Car insurance is about paying the widows of people you accidentally kill. Now you know why car insurance is so expensive. In order to cover the lost wages, funeral expenses, and  family benefits, companies need a lot of money. The Germans understand this. Let’s reveal the elephant in the room. If all that car insurance insured was cars and car parts, its price would be a fraction of what it is today. Shall we propose a rename of “Car Insurance” to “Accidental Death-By-Car Insurance” (ADBC Insurance)? The Germans don’t have to buy ADBC insurance. There is no law requiring its purchase. But almost everyone buys it.

The illusion of competition

What is the biggest cause of car crashes and deaths? Speeding? Alcohol? Distracted Driving? No. The biggest cause of car crashes is bad road design. It’s why some stretches of road are more dangerous than others. It’s why a substantial portion of people killed in car crashes are pedestrians. When people die from bad road design, who foots the bill? In BC, Manitoba, and Saskatchewan, ADBC insurance is owned by the government. It’s another way government subsidizes drivers. First, they built expensive roads that cars to destroy. Second, when people die on these roads, they ADBC insurance. It is a hidden subsidy. In Ontario, the government builds dangerous roads. The money you pay in income tax and sales tax goes to pay for these roads. They impose zoning laws. These zoning laws force the construction of roads. People have no choice but to use cars. They have no choice but to accidentally kill others. Then, the government takes away the hidden subsidy of public car insurance. We are forced to pay for expensive ADBC insurance because the government has forced us to rely on the automobile.