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Comment by romwell | Hacker News Reader

Side story about how satisfied people can be with the mandated insurance.

I was on coast-to-coast road trip when I got into an accident in TX. Someone was trying to pass me on the left in a turning lane, veered into the incoming lane, and then hit my vehicle's front wheels from the back.

The police ticketed the other driver, and told me that insurance will surely take care of that on my side. "Wow, it's worse than we thought", they said, looking at the footage from the security camera. There were eyewitnesses too.

Now, this was a $6K car (used Fiat 500) that I got specifically for the road trip, intending to resell it in the future. I didn't get comprehensive coverage for it, figuring that if I damage it, welp, it's on me; and if someone else does — that's why we have mandated liability insurance, right?

...I got zero ($0.00, zlich, nada) from the other driver's liability insurance. They informed me that their expertise concluded that the accident was my fault, and, by law, they don't have to abide by the police report.

That's to say, the only way to get any money from them is to sue them, in TX. Figuring that the car is registered in California, and the damage was about $3K, they decided to not pay me anything at all.

Because they can.

Now, if I had comprehensive coverage, they'd be facing my insurance company — because one of those has to pay up. But they're facing me, so I'm welcome to sue or get shafted (with a nice side of gaslighting from the insurance agent, who was very convincing about how I should trust their assessment).

The whole thing is a scam.

View on HN

I think you mean collision coverage. Comprehensive covers non-collision accidents like theft or a tree falling on your car and is generally cheaper than full coverage which includes collision.

It seems like you may have been screwed over, but also don’t completely understand how auto insurance works in most places which might be partly intentional for the industry.

In most places damages to your vehicle are covered by your own insurance. You can sue the other driver and their insurance will cover them if necessary, but generally you’re only able to be reimbursed up to a certain amount which is why you need to have insurance yourself. Yea, it’s backwards and effectively forces you to have more insurance than you might otherwise want or need.

> You can sue the other driver and their insurance will cover them if necessary, but generally you’re only able to be reimbursed up to a certain amount

Well, you are generally (AFAIK, this is true of all US jurisdictions) legally entitled to your full actual damages if the other driver is completely responsible, but they are only required to carry a certain amount of liability insurance (or, alternatively in many cases, bond); beyond that, you are stuck collecting from them individually after securing a judgement, which may be impractical if they simply don't have the assets.

This is incorrect in some states. Some have limits for medical liability and some have limits for property damage liability.

Michigan for example. https://www.michigan.gov/documents/autoinsurance/ip206a_6799...

Beyond that, you should insure yourself sufficiently because you can’t depend on others to have adequate coverage. Doesn’t matter that you can sue if they have no money.

You can ask your insurance company to sue them, but you could also sue them in small claims court since your loss is under $15k. They generally can't send a lawyer to small claims court.

Whats the scam? The insurance company was hired to provide insurance for the other driver. By all accounts they did so. If the other driver had no insurance, your options would have been the same: hope they pay out of good will, or sue them.

The public policy motivation for liability insurance is to protect the lawsuit route. If you sue an uninsured driver and win, you might not be able to collect (getting blood from a stone). But if they have liability insurance you can collect on a judgement.

You choose to drive with only liabilty insurance, and are upset that insurance didn't cover an accident when you had no liability.

The 'scam' seems to be insofar as wealthy and powerful entities can exploit the functional inability of those less wealthy and powerful to meet them on even terms in the legal system. I think we could all agree that in an ideal world if someone is at fault, their insurance should pay out to those they damaged. The reality is that may only happen if you have an entity of similar magnitude to go to bat for you.

That doesn't mean it's a good idea to not get comprehensive insurance, but police reports should probably carry some weight without requiring a suit.

> The 'scam' seems to be insofar as wealthy and powerful entities can exploit the functional inability of those less wealthy and powerful to meet them on even terms in the legal system.

Even without insurance or greater wealth, a party from whom you believe a liability should exist who has no interest in paying could have done the same thing here. If you aren't willing to sue over a disputed liability, it might as well not exist.

> but police reports should probably carry some weight without requiring a suit.

Any proposal to do that in effect makes the police investigation a court of first instance, which either means creating additional procedural rights that apply before it can be completed (driving up costs) or a very real denial of due process.

> Any proposal to do that in effect makes the police investigation a court of first instance, which either means creating additional procedural rights that apply before it can be completed (driving up costs) or a very real denial of due process.

Not nessasarily. The 'additional weight' could still be something that requires a suit to take advantage of directly, but which the threat of compels behavior. For example, many localities have rental laws that compel the landlord to pay thrice what they would otherwise owe in certain circumstances. E.G. if my landlord simply refuses to refund my security deposit without proper reason, or without following proper procedures within 45 days, then I can sue for 3x the deposit and attorny fees.

A similar thing can be implemented for vehicular damages. Something along the lines of:

1) If you are found liable and

2) Were given adaquete notice and oppurtunity to pay and

3) Ought to have known you were liable

Then the defendent is entitled to punitive damages for your making them take you to court. You don't even have to go as far as most tenent laws go. You could allow for a loosing defendent to argue that there defense was reasonable, (or reasonable given evidence available to them at the time), and that they should therefore not owe punitive damages.

Of course, this still is only tangentially related to insurance.

What you propose is additional weight that does require going to court, basically additional incentive to settle if it is reasonably perceived the other party will take the case to court.

But there are already additional costs the insurance company would bear if it went to court, which is why they will mostly settle if there is any substantial evidence (like a police report) and even a shadow of a threat of legal action, including—but not limited to—an insurance company on the other side. Neither that nor any additional weight you give the police report that requires going to court alters the calculus at all when the liable party (whether or not they have an insurance company as their agent) is certain you won't take that step.

>3) Ought to have known you were liable

How would that even be defined? Is it just based on the balance of evidence available? We already have something for this. If one party is really obviously guilty, then the other party can call for a summary judgement and skip much of the expensive trial.

Summary judgement applies when the facts not in dispute are sufficient to reach a legal conclusion. If there is a material dispute of facts, no matter how obvious the evidence is, it must go to trial. Further, summary judgement only reduces the cost (for both sides); it does nothing to act as a deterent.

> How would that even be defined?

That depends on how claiment friendly you want to be.

The key piece would be: "based on what the defendant knew when they refused the request for payment". Standard evidenciary rules apply for showing that the defendant knew something. In this case, the key evidence would be a police report and pictures sent to the insurance company, so I don't think there would typically be a dispute here.

The harder part is defining "ought". Courts already have a reasonable person test they apply to other situations. You could also apply the clear and convincing evidence standard to the applicable evidence (or, if you really wanted to, either preponderance or beyond a reasonable doubt).

The real answer is that in this hypothetical the legislature would pass a law, and then the appellate courts will spend decades clarifying the law until the legislature changes it again.

That doesn't seem reasonable. Whoever is liable should pay, there shouldn't be a little game where you can avoid paying because it will cost the other guy too much.

Imagine if murder cases were only prosecuted if the family had funds to investigate, and they only got refunded if the murder were proven.

> Imagine if murder cases were only prosecuted if the family had funds to investigate, and they only got refunded if the murder were proven.

Vehicular crimes obviously don't depend on either a victim or the victim choosing to take legal action for the offense, OTOH, wrongful death, the civil cause of action parallel to murder and other criminal homicide offenses...has exactly the same requirement as any other tort that someone has to file suit.

To the extent there is a criminal or other public offense (traffic infractions may or may not be strictly criminal depending on state law) involved in the accident, that would have been pursued without the victim lifting a finger as a consequence of the police report, just like murder investigations.

> If you aren't willing to sue over a disputed liability, it might as well not exist.

I think this might be at the heart of it.

The article (about how hard actuarial math is) and the insurance buyers make the mistake of thinking that all that matters is downside in case of event X with particular probability P. However, instead you have to think about chances of X AND chances of being able to navigate a system that is outright adversarial to parties that are not the insurance companies.

The “house” always wins…

>The article (about how hard actuarial math is) and the insurance buyers make the mistake of thinking that all that matters is downside in case of event X with particular probability P. However, instead you have to think about chances of X AND chances of being able to navigate a system that is outright adversarial to parties that are not the insurance companies.

Are people going through and calculating the expected utility of purchasing insurance, and that calculation is being thrown off by counterparty risk, leading them to buy insurance they wouldn't have bought? I doubt it.

>The “house” always wins…

is there an expectation otherwise? You buy insurance to protect against risks, not because you think it's a positive expected value investment.

Yes, the expectation was that the risks are those you bought insurance for. Additional protection against being bullied by other insurance companies is not obvious.

>I think we could all agree that in an ideal world if someone is at fault

But that's the thing. The other driver was only declared "at fault" by the police report, which might hold some weight, but isn't the final say.

>but police reports should probably carry some weight without requiring a suit.

what would that entail?

> You choose to drive with only liabilty insurance, and are upset that insurance didn't cover an accident when you had no liability.

Seems clear to me he's upset the other driver's liability insurance isn't covering the accident in a case where law enforcement and others see clear liability for that other driver, and other driver's insurer's reasons seem to more or less amount to "you haven't legally compelled me to pay yet, and probably won't."

> Seems clear to me he's upset the other driver's liability insurance isn't covering the accident in a case where law enforcement and others see clear liability for that other driver,

So? Law enforcement officer's testimony isn't a court judgement. You can't seriously expect anyone to pay you if all you have is some testimony[1] that they owe you money.

Testimony is worthless until it is admitted into evidence in court. Keep that in mind and you expectations will be in line with the harsh realities, and then you won't be confused and disappointed about the outcomes.

[1] Testimony, even from a LEO, isn't a fact. During a matter in court, testimony that concludes that one party is at fault may be disputed by testimony that concludes that the other party (or no one at all) was at fault. In auto accidents it is not unusual for a court to decide that the liability is shared between the parties (50/50, 70/30, etc) - "Sure, the other guy swerved into you, and he really should have checked his blind-spot before performing the lane-change, but should you have really been overtaking in the slow lane? He should have checked his blind-spot, but you should have not accelerated into his blind spot in the first place."

> The public policy motivation for liability insurance is to protect the lawsuit route.

A friend of mine had the same experience from the other side. She ran into some guy's car, apologised for her mistake and told him not to worry because she was fully covered. The first sign that something wasn't right was when a summons to appear at the magistrate's court appeared in the letter box.

She asked the insurance company what was going on and they said "just send the paper work to us and don't worry, we'll take care of it".

Then she got a knock on the door from a pair of court-appointed officers who were there to discuss her financial situation and assist her in arranging a payment plan to pay off her fine. Her insurance company had not sent a representative to the trial, so the magistrate found in favour of the only party that had turned up.

After some screaming on the phone, the insurance company paid the full amount of the judgement.

Any judge worth his salt will understand the global implications (courts clogged with litigants, inability of poor people to use cars) if insurance companies stonewall when their client is at fault, whatever the odd lot who comment in HN think. The judge should hit the other party.

Bear in mind that this is a matter of public interest and romwell has not signed an NDA. S/He should name that insurance company!

> The judge should hit the other party.

What judge?

The whole scenario is around a party who was not willing to go to court. There's no judge involved.

The appropriate course is to sue the other driver directly and ignore the insurance company. A person cannot ignore a court summons, not even in Texas.

The judge will know that the other driver's insurance will ultimately pay, so he can punish the insurance company for its intransigence by putting a heavy financial penalty onto the other driver.

> The appropriate course is to sue the other driver directly and ignore the insurance company.

Yes, that's how you formally sue in an accident. It's not the hack you think it is, though, the insurance company defends the lawsuit, that's part of the insurance agreement.

It's also specifically what OP was unwilling to do which resulted in the insurance company not paying, and why any “the judge should...” is missing the point. If there was even the slightest expectation there would be a judge, the insurance company would have likely paid without batting an eye.

Lawyers can’t represent clients in some small claims courts.

And often just filing is enough for them to do the math and just pay out.

Sure, it’s not fair, but that’s why we have courts in the first place.

> Lawyers can’t represent clients in some small claims courts.

Which, given that the OP resides in California and was unwilling to pursue legal action in Texas because of inconvenience, isn't really helpful.

> And often just filing is enough for them to do the math and just pay out.

Yes, even just hinting at willingness to file a claim probably would have gotten the insurance company to settle in this case. That’s been the whole argument from the beginning.

> If there was even the slightest expectation there would be a judge,

Okay, I'm confused. My anecdote, which comes from Australia, indicates a 100% expectation of a judge. Are you saying that in Texas, a $US6K matter is likely to be considered too vexatious/trivial to receive a trial?

Or is it actually possible to decline a lawsuit in the USA?

This is an "explain it to me like I'm five years old" moment. I really don't know what you guys are talking about.

>Okay, I'm confused. My anecdote, which comes from Australia, indicates a 100% expectation of a judge. Are you saying that in Texas, a $US6K matter is likely to be considered too vexatious/trivial to receive a trial?

His point is that the OP (ie. https://news.ycombinator.com/item?id=29719047) is refusing to sue, so there's no case to bring before a court. Everything else is irrelevant. Even if you'll obviously win, but you don't sue, it's not the state's job to file lawsuits for you.

> The appropriate course is to sue the other driver directly and ignore the insurance company. A person cannot ignore a court summons, not even in Texas.

As I read it, the teller of this story was unwilling to go to court, not even small-claims. If the justice system is not brought into the picture you can't seriously expect anyone to take claims of "you owe me money" seriously.

No, he’s (reasonably) upset that the other side’s insurance did not pay out when it was clearly their client’s fault, banking on his difficulty of filing a lawsuit.

What do you call someone who victimizes people he know have a disadvantage in suing him?

That doesn't really seem to be an issue with insurance per se. In a world without insurance, you could still have people refusing to pay even if it's "clearly" their fault.

It is a problem with the insurance, as it would be for anyone else. Shitty tactics are not exclusive to insurance, but that doesn't negate their actions, or the expectation that they should perform better.

> What do you call someone who victimizes people he know have a disadvantage in suing him?

A for-profit business.

Sure, unequal, wealth-gated practical access to the courts is a real problem, and it impacts basically every area of American society.

But it doesn't make mandatory auto liability insurance a scam, any more than it makes literally every commercial industry a scam.

The claim I was defending was that the way auto liability insurance is done is a scam, not that the concept of requiring liability insurance is a scam.

Looking back, the original post's comment on that point was a final aside that was ambiguous. But my defense is of the charitable interpretation of that remark. Any auto liability insurance system should be written to avoid that kind of gaming.

>The claim I was defending was that the way auto liability insurance is done is a scam

Seems like it's working as intended? The purpose of auto liability insurance is to... insure the policyholder from liability. If you're not the policyholder, it's not working for you. If you're a policy and you're not experiencing losses stemming from your liability (ie. you crashed your own car), it's not covered. Others in this thread seem to think it's a general purpose mechanism for making all parties involved whole, which is a misunderstanding.

I thought I addressed exactly that in my original reply It’s not really working if and when once side is incentivized not to pay when they can and are obviously at fault.

Your comment is like saying “yeah that corporation used a natural pond as a toxic waste dump, so what? Corporations are supposed to make a profit, right?” Yes, they are … subject to other social desiderata like respecting others’ rights.

You seem to be attached to some bizarre strawman that the OP was expecting his own liability to cover the other party’s faults. That was never the argument.

> thought I addressed exactly that in my original reply It’s not really working if and when once side is incentivized not to pay when they can and are obviously at fault.

That's not auto insurance that's the underlying legal system, and it's not the feature of the underlying legal system that mandatory liability insurance exists to address.

The intent of mandatory liability insurance is to fix a specific problem: a liable party might not have the resources to pay even a moderate damage claim if found liable. That's what mandatory liability insurance exists to address. That is the whole intent.

If you want to fix the “problem” that people aren't incentivized to proactively pay expected liabilities even when there is a clear indication that the party to whom they would be owed is not willing to pursue them in court, well, you are certainly free to propose a solution, though I don’t expect that there is one that doesn't have more adverse effects than benefits. And, in any case, that's not what mandatory auto liability insurance is designed to address.

>It’s not really working if and when once side is incentivized not to pay when they can and are obviously at fault.

This seems to be based on the "making all parties whole" interpretation of insurance, rather than "protect the policyholder". Are you ignoring my prior comment entirely? Are you trying to argue that insurance companies ought to have a "making all parties whole" imperative rather than a "protect the policyholder" imperative? Or perhaps you take issue with insurance companies reneging on their obligations?

It seems like from the rest of your comment that you take issue with the latter, rather than the former. My response to that would be: I agree reneging on obligations in general is bad. However, even you seem to agree that there's some room for dispute, hence why answer was qualified with "obviously at fault". Other commenters have suggested somehow punishing insurance companies in cases where they're "obviously at fault" and refuse to pay up. However, the trouble then becomes, what counts as "obviously at fault"? I have not received a satisfactory answer for that https://news.ycombinator.com/item?id=29720344.

> This seems to be based on the "making all parties whole" interpretation of insurance, rather than "protect the policyholder". Are you ignoring my prior comment entirely?

No, you’re ignoring the three comments I’ve made now that clearly indicated I was talking about “the structuring of the insurance system” (rather than the OP’s liability policy), and continuing to argue against something you should be aware I’m not endorsing.

And yes, making victims whole is the purpose of mandating liability coverage for drivers.

Can I ask what you think your comment is adding to the discussion that it didn’t have before?

> And yes, making victims whole is the purpose of mandating liability coverage for drivers.

Yes, agreed, but you aren't a victim until a court issues a judgement that you are, hence the other parties insurance has no reason nor obligation to make you whole.

A dispute is just a dispute until a court rules on it. Statements made by LEOs and witnesses are only examined when it is presented before a court. If you don't present your argument before a court, you are not automatically in the right.

It seems more like the poster was complaining that actually following through was hard and a pain in the ass, therefore the game is rigged.

Really it’s just they’re used to someone else doing all the hard work and don’t want to shell out or expend effort for when something doesn’t go smoothly.

Having dealt with contractors and others who decided doing what they were supposed too was clearly too hard (and then making them do it or deal with the consequences), it’s just how life is. Some people will make you make them, because most people are too busy or distracted to do it, and they usually get off Scott free.

It sucks, but it is what it is.

I don't know what you think you're adding to the conversation here. The point of the auto insurance system as mandated by governments, including the "required liability" part, is to rise a bit above (or a "smidge above" as you might say) this folksy "it is what it is" nihilism.

If no one pushes the button that is provided to do anything about it, what do they expect to happen?

The original comment seemed to be complaining that no one was pushing the button for them, and the other side wasn’t just doing something without them pushing the button.

Well duh.

It's easy to get a lawyer on contingency for this. Don't talk to the insurance company beyond: "I'll settle for $20k now", "Can't do that." Hang up and start calling lawyers (price just went up). They are going to want to hang injuries over them...so start getting massages and feedback from a chiropractor.

You have to play the game to get compensated unfortunately. The lawyers and chiropractor know how to do the dance. Most people just get discouraged by the offending insurance compay and take it in the ass. You should be paid for your time talking to lawyers and going to get massages and dealing with all the logistics of repair, inconvenience of the accident etc.

"They can" because you let them... most people don't value their time and do the the same. Great business, insurance.

Another way of looking at it is that you could recover all of the money you have ever paid out for auto insurance in one settlement--zeroing out your contribution to the scam.

Grind them into dust for every last penny you can pry out of their hands because they do the same to you and all of us. Forget the propaganda about "raising everyone else's rates." That's a joke. This is an industry that punishes loyal customers by raising rates every year until you notice. Then they hope you leave. They are very sensitive about people shopping around each year and always talk about discounts for people who were at their last insurance company for x consecutive years. Scam indeed.

It sucks that you couldn’t recoup any compensation, but I’m not surprised at all. You don’t have a relationship with the other person’s insurance. You have a relationship with your insurance. Your insurance covers you, and your insurance may try to collect from the other driver’s insurance company.

Also, this is why auto insurance offers uninsured & underinsured riders (add ons). There’s no guarantee that some jackass who hits your car will have enough insurance or any insurance at all.

Source: was an insurance agent

Is there a ‘small claims’ court process in the US?

Here in New Zealand there is a court process that is cheap and fairly efficient for low value claims. This sort of thing would probably sneak into that category.

Yes there is small claims courts in the US but I think cross state lawsuits may not work in all situations. So if you are from California and are suing for an incident that happened in Texas, you would have to go the small claims court in Texas which involved time and money to travel there.

The benefits of Covid! Many switched to Zoom at least for the time being.

And the idea is you sue and when they get served they just settle as it’s cheaper.

Yes, there is, though the specifics vary (possibly significantly) by state

Am I missing something here?

Shouldn‘t the other driver pay you personally?

And then he‘d have to hash out whether his insurance pays him that money?

What everyone is missing: you file a claim with your insurance company, and then they chase down the other party.

If rando-joe you go to the other insurance company...yeah, of course they'll tell you "we investigated our client and found we don't have to pay you" because they're very much hoping you'll say "well shoot then" and go away.

The other option is to have an attorney do it. With multiple witnesses and video footage, it's a slam-dunk case unless the driver's identity can't be established. That means a)an attorney is happy to take it on and b)the other insurance company will likely cave well before anyone even starts talking about court cases.

Oh yeah I apparently missed the suing / negotiation effort.

> Am I missing something here?

> Shouldn‘t the other driver pay you personally?

That still means the burden is on OP to sue the other driver since their insurance company was not paid to represent them in this type of case.

> Now, if I had comprehensive coverage, they'd be facing my insurance company — because one of those has to pay up.

You don't need collision coverage to cover collisions that are the fault of other drivers -- just uninsured motorist coverage.

> ...I got zero ($0.00, zlich, nada) from the other driver's liability insurance.

Well, yeah, you didn't legally establish any liability, or even, apparently, make even the suggestion of the intent to do so.

Insurance companies, being for-profit entities, aren't in the business of giving out gifts.

> Now, if I had comprehensive coverage, they'd be facing my insurance company

Yes, dealing with other driver's insurance companies (along with uninsured drivers) is among the more significant reasons to carry more than liability coverage.

> The whole thing is a scam.

I don't see a scam anywhere.

The police report, however, did. Throwing ones hands up to say "well, of -course- the company is going to avoid paying anything out unless taken to a court of law" is to abdicate corporations of all responsibility other than profit making. Just because a person can't afford justice doesn't mean we should accept injustice.

> The police report, however, did.

Police reports are evidence that can support a finding of liability, but they are not a legal establishment of liability. There are very good reasons (the due process clause of the 14th Amendment comes to mind) why that should be the case, it's not a scam..

> Throwing ones hands up to say "well, of -course- the company is going to avoid paying anything out unless taken to a court of law" is to abdicate corporations of all responsibility other than profit making.

Untrue. The corporation here has other responsibilities, but they are all to their paying customer.

So you don’t think corporations have any responsibility to act ethically?

Corporations are no more ethical than wild animals. "Responsibility" doesn't enter into it, the fact is they don't understand human morality and can't be made to, so you have to handle them with that in mind.

> responsibility to act ethically

They have the opposite responsibility, if anything... They have a fiduciary duty to their shareholders, and considering that the behavior being suggested here would see them quickly run out of business by their less-moral competition, it would probably be a breach of that duty.

The solution is to change laws about redress. For example, statutory punitive damages and attorneys' fees in lawsuits against insurers where the final judgement is significantly different from the insurer's initial offer.

Talk about what is ethical is idle because that simply does not drive corporate behavior.

>The solution is to change laws about redress. For example, statutory punitive damages and attorneys' fees in lawsuits against insurers where the final judgement is significantly different from the insurer's initial offer.

1. I you're supposed to have negotiated with the counterparty in good faith prior to a lawsuit. If not, that will be looked negatively by the judge. https://www.sbwllp.com/rule-68-offers-of-judgment/

2. This probably doesn't play well with probabilities/statistics. Suppose we accept your proposal, and say any final judgement that's 5x larger than the offered settlement should be hit with extra damages. Now a lawsuit comes along that the insurance company thinks there's a 12.5% chance of winning, and if they win, the damages awarded will realistically be $1M. Based on expected value calculated from the previous facts, and factoring in court/attorney's fees, the insurance company offers the plaintiffs $150k to settle. That seems like a good offer for all parties involved. However, if the plaintiff gets greedy, and on the off chance he wins, the insurance company will have to pay extra damages, because from an initial offer to final judgement perspective the disparity is huge.

Part 1 is just a matter of public policy. This is all armchair theory anyway.

Regarding Part 2, I actually don't see the problem. If the result is causing insurance companies to be more cautious about lowball offers when there's a range of reasonable outcomes, is that bad? The plaintiff still must succeed at proving damages, so it's not like that outcome is unforseeable.

It does increase "settlement risk" for insurers, but _they're insurers_. Of every kind of entity out there they should be the most comfortable with risk. The greater risk of unfavorable settlements would obviously increase insurance premiums, but if premiums increase because insurers are actually paying more in fair settlements and/or punitive judgements because they failed to pay a fair settlement, again I cannot see the problem.

>but if premiums increase because insurers are actually paying more in fair settlements and/or punitive judgements because they failed to pay a fair settlement, again I cannot see the problem.

But the problem is that in the example I given, the lowball option is fair given the probabilities/expected value.

> They have a fiduciary duty to their shareholders...

Citation please.

Does this work?

https://www.nolo.com/legal-encyclopedia/fiduciary-responsibi....

No, that paragraph describes the duty of officers of the company to put the interests of the company before their own. It doesn’t claim that these officers need to behave unethically. You could even argue that displaying unethical behavior is not in the best interests of the company in the long run but this is of course hard to prove in any direction.

You asked for a citation of fiduciary duty. I already explained why that precludes moral action in this case

I now realize I misinterpretted your prior reply as copypasta of the "maximize shareholder value" trope.

My apologies.

Good luck proving it was unethical as compared to a ‘misunderstanding’. A lot of people are pretty good at CYA.

Being on the shitty end of the stick, of course the poster sees what is happening. But until a judge or impartial third party with some pull sees it, it might as well not exist. And that’s hard.

The idiot of your whole thread is that while you're talking about how "insurance is a scam". Well, you might not like taking the complicated process needed to get stuff from an insurance company, sure. But if you were instead just dealing with an individual, it's obvious your situation would be not better but completely impossible.

>I don't see a scam anywhere.

They are telling the government they will pay out if the insured party is at fault for an accident, but in some (many?) cases they don't actually pay out. That sounds like a scam to me.

> They are telling the government they will pay out if the insured party is at fault for an accident

No, they aren't.

They are telling the government and their customer they will pay out if the insured party is found to be legally liable for injury or property damage while driving. (That is, in exactly the situations where the customer would legally be obligated to pay.)

They are also telling their customer that they will defend them from such claims to the extent reasonable, settling where it makes sense to contain liability. That is actually a big part of why one would pay for insurance rather than posting a liability bond (as most states allow) unless you have the funds to keep a general attorney on retainer and seek task-specific representation as needed.

Had they paid out when there was no expectation you would establish liability, that would be a scam against their paying customer.

In this case, who is legally liable?

No one. It's up to a court to decide. If you haven't been declared liable/guilty by a court, you're not liable/guilty. It's simple as that.

> They are telling the government they will pay out if the insured party is at fault for an accident

A police report doesn’t establish proof of fault. Neither does a video. Neither does eye witnesses. All of those are evidence of fault, but not legal proof of fault.

It sounds like you were just cheap, didn't want to purchase comprehensive coverage, then that came back to bite you. This sucks, but is hardly a scam. Even worse, it sounds like you even understood what comprehensive coverage does (cover 1st party physical damage regardless of situation), and consciously chose not to buy it, assuming that anything that would possibly happen to the vehicle would be someone else's fault. Terrible assumption on a cross country road trip. You would have been equally fucked if you hit a deer, spun out in a rain storm and hit a median, popped a tire and ran into a ditch, etc.

If the other party is 100% at fault, why should they not pay for the damage they caused?

And its not “cheap” to not get comprehensive insurance. Its a calculated risk.

It does suck that in OP's case they caught the wrong end of this. But again, that's why you carry your own insurance with your own coverage. You're not just paying for the literal indemnification of auto damages, you're paying for the cost of litigating and proving facts in court in various hypothetical scenarios. As the other poster said, cops don't determine fault. You have to go court for that.

As somewhat of an aside, since I think a lot of people don't realize this: Most of the time attempting to allocate blame in auto accidents is a massive waste of resources and time. Insurance companies usually just settle with each other before even getting to court unless the claim involves big $. Even if you were 0% at fault, your insurance company is still incurring some cost to process the claim. Their assessment of your risk is still going up (as it should). They're still going to up your premium. The whole fault concept is just not helpful to the actual functioning of the industry, most of the time. In some states they just got rid of fault altogether, for exactly this reason.

> And its not “cheap” to not get comprehensive insurance. Its a calculated risk.

Yeah, a risk that in this case, did not pay off. So why is this guy whining all over this thread that he got "scammed" when he knew it was a risk?

> If the other party is 100% at fault, why should they not pay for the damage they caused?

Because the "other party is 100% at fault" is actually determined by courts, rather than the cops, hence the need for lawsuit.

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