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Comment by lliamander | Hacker News Reader

Why would taxes be needed to internalize the increased risk to others? It seems to me that liability insurance is the appropriate place to factor those risks in.

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Perhaps because this is just one of the external costs, and these costs are absorbed through taxes (for instance, road wear is higher for heavier vehicles, so lighter car effectively pay for the SUVs and trucks)

There's many instances of direct subsidy going through SUV [0]. I don't remember the exact framing, but basically tariffs and other rules carve out a SUV shaped bubble for US makers to operate with extra low competition, and subsidies will often go there too when they don't want to make it explicit it's only for US makers.

The recent EV plan would be one exception to this, where it's worded straight as a middle finger towards foreign makers.

[0] https://abcnews.go.com/Technology/Hybrid/story?id=97505&page...

> instance, road wear is higher for heavier vehicles, so lighter car effectively pay for the SUVs and trucks

The correct answer in that case is to quit wasting time & effort creating taxes for personal vehicles, and just make commercial truckers pay it all. It spreads the cost of the roads around to everyone who benefits (even if you don't have a car, you benefit from the roads existing). And since the damage to roads scales to the fourth power of the axle weight, the difference between a car and SUV isn't too dramatic, compared to the difference between an SUV and a big rig.

Good reasoning. But take it one step further…who pays when shipping costs go up?

> even if you don't have a car, you benefit from the roads existing

That's the most interesting part to me. Trucks using the road is really important to our society, and if everyone benefits from it I'm not sure it makes much sense either to make commercial entities pay in full for it.

The same way railroads where heavily subsidized and water ways are also usually state/government projects, road maintenance could be (and probably is up to a point?) handled at the same level.

My ideal would be to get rid of SUV preferential policies so there is no need to counterbalance their use on other aspects. In a balanced setting, SUVs are rarely a rational choice (cf. the cars that get chosen everywhere else in the world).

> Perhaps because this is just one of the external costs, and these costs are absorbed through taxes (for instance, road wear is higher for heavier vehicles, so lighter car effectively pay for the SUVs and trucks)

The externality we are specifically talking about is the safety risk to others that comes from having a larger vehicle. Other externalities can be solved different ways, but doe this specific one this seems like precisely the scenario addressed by liability insurance.

Drivers are often not found liable for hitting pedestrians in the US even when it is clear that an error on the part of the driver caused the accident, so liability insurance is not actually capturing those externalities.

However, laws automatically holding drivers liable by default for accidents with pedestrians unless there were clear extenuating circumstances, as some other countries, might be another way to change this situation so that this risk could be better captured by liability insurance.

I remember there was a talk at Defcon that hypothesized: if you want to murder someone and get away with it, hit them with your car.

> Drivers are often not found liable for hitting pedestrians in the US even when it is clear that an error on the part of the driver caused the accident, so liability insurance is not actually capturing those externalities.

Do you have a source for this?

> However, laws automatically holding drivers liable by default for accidents with pedestrians unless there were clear extenuating circumstances, as some other countries, might be another way to change this situation so that this risk could be better captured by liability insurance.

What countries have those laws, and how have they worked out? Why not just do something sane like treating it like any other civil case where people who cause damage to others are liable for it?

the problem with this is the same as the problem when police shoot people. when there's only one side left, justice tends not to occur.

justice tends not to occur

I think you're being a little disingenuous. Most police are shooting people in self-defense (https://www.statista.com/statistics/585140/people-shot-to-de...). A minority of victims are actually innocent, and justice still does tend to occur in those specific situations. For instance, George Floyd's killer received a (presumably) just punishment.

there are several problems with these figures. first of all, the unknown category. this data comes from police departments. if they "don't know", it means the person was unarmed. otherwise they would have said. secondly, the vehicle category includes anyone who was in a car. while a car theoretically can be used as a weapon, that also is a category the police can put anyone they shoot after pulling over because "I was afraid they were doing to drive at me". thirdly, caring a weapon isn't illegal. this chart doesn't break down by whether the person with the weapon was actually threatening the officers with it, just whether there was a weapon on them when they were killed. in the most egregious cases like George Floyd, the police sometimes get charged but it's rare. Floyd's case was exceptional because it room place over 9 minutes in broad daylight with dozens of witnesses and multiple camera angles. there are hundreds of unarmed people killed by the police every year, and the vast majority see no charges.

I think non-fatal in injuries are significantly higher than fatal injuries. I don't have a source for that for USA at hand but it's certainly true globally by a factor of 15-40 https://www.who.int/news-room/fact-sheets/detail/road-traffi...

Also, anecdotally, I hear quite a lot about family of deceased in wrongful police shootings suing police. Although I don't think the difficulty that a private citizen has getting justice after being wronged by a police department is really at all the same as most road accident situations.

My guess is most insurances settle and it never goes to court, at least criminally.

Well the OP was indicating that it didn't even go to insurance.

Japan has percentage-based liability, and generally speaking there is a large onus on the driver of cars to do the safe thing when close to smaller groups.

For example, you have to slow down to under 10km/h in theory if there are small children on the sidewalk next to you. Up until recently, a bike collision with a driver was considered 100% the driver's fault even if the bike was riding against traffic (That was changed so that the liability is 100% if the bike is riding on the right side of the road).

The point of all this is that there is such a thing as mixed liability, and the idea that it's either one or the other person's fault is just completely unworkable. And because there's this percentage-based system, you can ratchet up the liability based on who is more likely to cause major damage, without having binary results for really tough things.

I know there is such a thing as mixed liability, that's pretty common in civil court systems isn't it? I don't see what point you're trying to make with it.

You didn't really answer the questions I was asking OP for either. Japan puts a large onus on drivers but appears to have backed off from some of it? That is actually interesting though, why did they change?

Well my point is that there's a lot of mixed liability things baked in, so there are many many many many things that can make a driver liable, because there's not this fear of "what about in this extenuating circumstance X???"

The change is mostly around making rules more strict for cyclists, as cyclists... well, they also pose a danger to pedestrians! There is a pretty famous case of a cyclist hitting an old lady and killing her.

Some people moving here get annoyed because a lot of times the liability split ends up being 90% driver/10% victim, because there are technicalities, but generally speaking even for pretty "egregious" behavior from pedestrians the driver is ultimately expected to be doing their best. Things like "but there was a blind corner, how could I know somebody was going to ride from that corner" hold no water because drivers are supposed to slow down in those cases, for example. I don't know the state of liability in the US but I imagine it's a bit less victim-friendly.

> What countries have those laws, and how have they worked out?

Here in Norway the driver is assumed to be at fault, mainly due to the following paragraph:

§ 3. Basic rules for traffic.

Everyone must travel with consideration and be alert and careful so that no danger can arise or damage be caused and so that other traffic is not unnecessarily obstructed or disturbed.

In case there's a major accident, the driver at presumed fault will have their license temporarily revoked right away. However if the investigation showed the driver drove with reasonable care and caution, the driver will usually be exonerated (and thus get their license back).

There's been a few notable cases regarding this, for example one case where a pedestrian crossed the road at night during winter in a poorly lit area, got hit by a a car and died. The driver was found not guilty as the pedestrian had not worn a retroreflectors or similar, thus the driver had no chance to see the pedestrian until it was too late.

However, due to the above, the driver will often get some blame. There's been cases where the driver does not get an involuntary manslaughter charge, but does get punished due to paragraph 3 above. A recent one I recall is this one[2].

[1]: https://lovdata.no/dokument/NL/lov/1965-06-18-4/KAPITTEL_2#%...

[2]: https://www.nrk.no/osloogviken/broytesjafor-frikjent-for-uak...

That's criminal liability, but we were talking about civil.

Still, that seems even crazier. A pedestrian can step out right in front of you even deliberately and if it happens to be broad daylight when they do, you have to somehow prove you were not negligent otherwise you can be convicted of manslaughter.

Is that really so crazy? Driving a vehicle means constantly putting others' life at risk. Being a pedestrian does not. Holding people driving vehicles up to (significantly) higher standards seems like the sane thing to do, considering the immense damage they can cause to others.

Having to prove yourself innocent of criminal accusation? Yes I think that is a pretty bad system. That has nothing to do with the standards you have for negligence or competence of operation, it is about a private citizen being compelled by the state to provide proof of their innocence of a criminal accusation.

Having to prove yourself innocent of criminal accusation after killing someone else seems like a pretty reasonable system. The idea that killing other human beings using a car is "expected" and "the norm" seems to me like the bad system.

> Having to prove yourself innocent of criminal accusation after killing someone else seems like a pretty reasonable system.

I think you have it backward. You are being asked to prove yourself innocent after being accused of being the guilty party in an incident in which somebody died.

> The idea that killing other human beings using a car is "expected" and "the norm" seems to me like the bad system.

I don't know where you got that idea from. Seems pretty deluded.

It's a variant of "with great power comes great responsibility". The driver has taken non-trivial training to get their drives license[1], as they're in command of a vehicle which can inflict great damage to others easily. Thus there is a significant asymmetry between the driver and the pedestrian.

If a pedestrian suddenly steps out right in front of your car in broad daylight, in an area where it's not reasonable to expect them to (ie no crosswalk, not next to a school etc), then, as long as you weren't speeding or using your mobile phone, you'd most likely be fine. However if the pedestrian had for example been acting erratically just before, then the police might argue you should have taken more care.

Note that the paragraph I quoted applies to anyone venturing in traffic, including pedestrians. However, given the mentioned asymmetry, it usually falls down to the driver to be the more responsible party.

[1]: https://www.vegvesen.no/en/driving-licences/driver-training/...

> It's a variant of "with great power comes great responsibility".

It's not. The idea that being innocent until proven guilty frees you of responsibility is wrong. They are on separate axis. People get tried and convicted of criminal negligence causing damage, injury, death / manslaughter etc and for that matter all sorts of other criminal acts quite regularly.

Would you say somewhere like the USA where people are usually quite strongly innocent until proven guilty has a problem incarcerating enough people?

> They are on separate axis.

Maybe I explained myself poorly. Of course the driver is innocent until proven/found[1] guilty. That's separate from the potential charges and punishment. It's the latter where the greater responsibility of the driver comes in.

[1]: If you're "just" fined, you can accept or take it to court to get the police to prove it there.

> In case there's a major accident, the driver at presumed fault will have their license temporarily revoked right away.

> Of course the driver is innocent until proven/found[1] guilty.

those two statements read as incompatible to me, possibly that's where the confusion in this thread is coming from. having your license revoked is itself a serious penalty in the US.

> having your license revoked is itself a serious penalty in the US.

Unless you're relying on the license for work, I'd agree it's probably a more severe action in the US than here in Norway, where most people live in areas with well-functioning public transport.

There's one important detail that I had forgotten, as I have never been exposed to this thankfully. If the police wants to temporarily revoke your license, you have to agree. If you do not agree, it will go to the courts within three weeks[1]. The police, and courts, should weigh the impact of revoking your license against the severity of the incident.

[1]: https://nye.naf.no/trafikksikkerhet/lover-regler/tap-av-fore...

Increased liability insurance, if mandatory, is effectively just a tax collected by an independent entity. At least on first blush, it makes sense (to me) to just cut out that middleman and levy it directly.

It’s not a tax. It’s literally insurance for liability.

Sometimes, a tax can effectively be insurance for liability.

Sin taxes, e.g. alcohol or tobacco tax, in part help pay for the social cost of those activities.

No, that's just how they're sold.

As the name implies, sin taxes are taxes to discourage use. Tobacco smoking, for instance, likely saves tax payers money because:

1) Smokers pay more in taxes through tobacco purchases.

2) Smokers die way earlier, so there are less social security payments and fewer medical expenses.

We're talking about an incentive structure. Whether that's liability insurance or a direct tax, the goal is the same: to disincentivize unnecessarily dangerous road vehicles.

In a competitive market for insurance the goal is to optimize the actuarial outcomes such that you make a margin after losses are paid out on average. Making the tables optimal and margins small bring you volume of business. Taxes have no such incentive structure at all.

They don't apply the same technique, but they absolutely do establish the same incentive structure: taxing "vices" leads to decreased consumption[1], especially when the target isn't something you can easily sell on the black market (like cigarettes can be).

If Car B costs $X,XXX more than Car A for the sole reason that it's more deadly to everyone else outside of the car, then the purchasing envelope shifts for a large number of people.

[1]: https://www.tobaccofreekids.org/press-releases/2012_09_20_ny

But when you talk about incentive structures you have to consider both sides to understand the final price. Taking a one sided view doesn’t explain the final price at all.

Which side am I missing? When people buy cigarettes at the store, it's generally understood that the tax they're paying is used, in part, to offset the social ills of smoking. I would expect a similar understanding when purchasing large cars.

The insurance company doesn’t care about your safety, just how risky you are and the expected payout for insurance over your lifetime subtracted from the income produced from the policy. They don’t increase it to change behavior as you imply. This is different than the government taxation which is less about revenue and costs than about public health incentive creation.

Okay. In that case, I think I strongly prefer the tax!

> Okay. In that case, I think I strongly prefer the tax!

I'm reading this as you preferring a moral solution rather than a technical one? You must feel pretty confident that the folks in charge of governing will always have priorities that align with your own.

These are both moral solutions, in my book; the GP has convinced me that one is more effective than the other.

I don't think any such law will ever come into effect. So I don't feel the need to be confident (or the opposite) with respect to my elected officials. It's all wishing.

One thing to note is that, not only can taxes be made progressive, liability insurance is likely regressive considering higher paying jobs are more likely to be remote.

If you are too poor to afford compensation for the damage you might cause while driving then you ought not be driving.

I'd agree with this in a vacuum, but unfortunately the state of infrastructure in the United States[1] is such that most people--especially lower-income folks--need to drive to work, the grocery store, to ferry kids to/from school, &c. This isn't a good situation, but it's the reality at the moment. Moral "oughts" like you're providing really only hold weight if a person has a realistic alternative, imo.

[1] I'm not sure the situation in other countries.

The infrastructure problem would get figured out more quickly if people were jailed for driving without sufficient funds to compensate people in case of an accident.

The status quo is to require all other road users to take the losses from impoverished drivers which is as equally “unfair” as your sob story.

> Increased liability insurance, if mandatory, is effectively just a tax collected by an independent entity.

No regulatory agency will be as effective for accurately pricing risky behavior as an insurance market.

> At least on first blush, it makes sense (to me) to just cut out that middleman and levy it directly.

The whole point of liability insurance is restitution in the case where the insured caused harm.

Adding a government tax would be adding a middleman.

We legislate safety standards that require cars to get heavier to meet them.

The best course of action would be to correct our standards to make lightness and damage to other vehicles part of the safety requirements as well.

Yep, classic fallacy of judging actions on intentions rather than results (i.e. ignoring unintended consequences).

A. Cars get bigger because of safety standards.

B. Bigger cars cause safety issues.

C. Rather than unrolling A to adjust the original incentives, we stick a punishment (taxes) to offset some of the incentive we are placing in other areas

Drastically higher minimums for liability insurance would be better, but politically unpopular for the same reason that higher taxes would be unpopular.

Higher liability minimums would be very regressive making support tepid among the demographics who usually want really high taxes.

The higher liabilitie minimums would be specifically for those who have larger vehicles. How is that regressive?

That’s the cool thing about insurance, it doesn’t have to be popular - you have a risk you’d like to cover, here’s what it costs you

Except they operate in a competitive and fairly transparent market, so it’s actually not like that at all. Insurance rates are very tuned for a variety of risk profiles to capture the specific risk segments the insurer wants to take on and they compete for price in that space. If you don’t like what it costs from A you might be able to find it cheaper with B, and B has incentive to do that.

But if it costs a lot, people would rather just take the risk and then be on the hook for way more money than they can pay. Which is why paying for insurance is legally mandated in some cases.

How does liability insurance cover the risk of an uninsured under-insured driver hitting me?

(I live in Michigan and continue to carry unlimited PIP FWIW)

I do not buy any PIP because I have health insurance with an out of pocket maximum.

Although, I think states should require quite a bit of PIP as well so that non drivers are not subsidizing drivers.

Michigan's unlimited PIP is lifetime (so no out of pocket maximum to cover in year 2 of your catastrophe). There's rules about what is covered of course, but the financial side of it is a bit simpler.

My premium for the year is less than 1 month of health insurance, it's pretty cheap.

The problem is we have that - and even the cost of obliterating however many pedestrians and cyclists divided over all drivers is mere pennies.

Insurance rates should be set with actuarial data and not with political agendas. It's not insurance companies duties to set our action for societal purposes. You really do not want to give them any more power than they already have in our lives. See healthcare in the USA. That's why we have governments.

The government requiring people to purchase higher liability coverage does not mean the government is setting the prices for the liability insurance. Actuaries would still be doing the same job.

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