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Comment by midoridensha | Hacker News Reader

They should change the liability limit so that the maximum payout is the cost to buy an equivalent-functionality vehicle of the same age on the used market.

So if someone owns a $80,000 (new price) 2018 pickup truck, and someone smashes into them, the most the driver at-fault has to pay is the cost to buy a low-end 2018 pickup truck of any brand. Someone whose 2005 Ferrari gets smashed gets enough money to buy a 2005 small car, maybe a Hyundai.

Cars are supposed to be for transportation, not status symbols. If you want an expensive car, you should pay for the insurance to cover it.

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Equivalent-functionality doesn't work. What you consider functionality and what I consider functionality is not the same.

Clearly you don't feel that horsepower and 0-60 is important. Both of which are drastically different between that Ferrari and the Hyundai.

And even if we go beyond that. I paid extra for xDrive on my BMW. If it gets totaled, should I get a Toyota Yaris with FWD?

Yes, you should. All you need is basic transportation; if you want more than that, then you should pay the insurance to replace it when it gets damaged or destroyed.

I'm not even sure you should get anything at all from the other driver.

Do you demand the Earth compensate you when your house gets damaged in a storm, or do you pay for the insurance policy that covers that?

That's a fairly bad faith argument. The earth neither has agency or insurance of its own to pay out costs.

If instead someone comes and burns down my house, I would hate it if they only had to give me a "equivalent functionality" tent in the wilderness because the law considers all shelters to be equal.

That's exactly how disaster insurance works. Why should it be any different for human-caused disasters?

If you have some giant mansion, do you really think you're going fully compensated by some unemployed (and now imprisoned) people who burned it down?

What if my millionaire neighbor burns down the house instead?

They didn't try to claim that there is no difference between Veyron and a Prius.

They propose there is some baseline subset of functionality and value that matters, beyond which no one else but the owner should be obligated to care about.

I have to say it makes sense to me and I can't work up any sympathy for the counter argument.

If you choose to take some obnoxiously exotic delicate object out into the wild world, that should not be the rest of the worlds responsibility to protect your priceless irreplaceable paint job made from extinct dodo egg shells and door handle made from aluminum smelted from lunar rock samples.

In an interaction between those two vehicles, only one person chose to put a million dollars at risk, and one was just trying to get their groceries.

> If you want an expensive car, you should pay for the insurance to cover it.

Do you think there’s a difference in insurance premiums between the 2005 Ferrari and 2005 Hyundai?

I'm not an expert on car values or insurance. I'm guessing the 2005 Hyundai is pretty much worthless, while the 2005 Ferrari is still somewhat valuable. Maybe I should have picked an older Ferrari? Collectors still buy and sell certain models for a lot of money I think.

If it helps, change my proposition to use a 2015 Ferrari as the example.

True, but that’s really beside the point. Given the fact that everyone has some non-zero risk of being at-fault, it’s also true that people who own more expensive cars raise the insurance rates for everyone, including those who don’t choose to own cars that cost insane amounts to repair.

If you have 9 cars that cost $10,000 to replace and one car that costs $100,000 to replace, that means your average cost to replace a vehicle among that population is $19,000.

So in this hypothetical scenario the one asshole who owns the exotic car is nearly doubling the insurance cost for this population set.

> If you have 9 cars that cost $10,000 to replace and one car that costs $100,000 to replace, that means your average cost to replace a vehicle among that population is $19,000.

Except that replacement average is only meaningful and the $100k exotic car an asshole if the rate is the same among all 9 drivers to insure all of those cars and the risk pool among all 9 drivers is identical.

A $10k car driven 60k miles a year by a 17 year old male, owns potentially a larger slice of that $19k average then the $100k car if it’s driven 500 miles a year by a 55 year old woman.

This is why insurance companies employ actuaries because it’s a tad more complex to calculate policy risk than adding up all insured values and dividing by the number of the insured.

I’m fully aware that my math is more crude than the real thing, it’s just there to illustrate the concept.

I didn’t factor in the risk factor of the driver profiles because it’s nearly irrelevant to the discussion, since the discussion is surrounding the plain existence of an expensive car on the road versus not being on the road, all else being equal.

It doesn’t really matter whether the owner or the expensive car is a perfect driver because the scenario under discussion is whether I need car insurance that covers high value damage to other people’s vehicles. If that super responsible wealthy person owned a less expensive car, the total amount of dollars paid out by insurance companies still decreases.

In other words, if my insurance company knew for a fact that nobody on the road drove a car worth more than $10k, my rate would be lower, if only slightly.

In your scenario where low value vehicle drivers are less responsible, it actually bolsters my point because those owners need to insure against being at-fault in crashes with the “more responsible and sophisticated wealthy vehicle owner.”

I think we just get rid of liability insurance altogether and we all cover our own cars and passengers. No liability is assessed in a road accident, just self coverage. Exceptions would be pedestrians and cyclists. Maybe tack on a cheap liability coverage for them.

Like no-fault insurance?

Yup.

It makes sense for when a Civic hits the Rivian. The Civic's 35k (or whatever it is in CA) will get exhausted quite fast.

But it comes with a different issue. No fault will cause the Rivian's to have to make a claim. No issue here. But a claim means rates go up. And that is incorrect.

> Exceptions would be pedestrians and cyclists. Maybe tack on a cheap liability coverage for them.

Some states have a state fund for things like this. New Jersey did in 2010 when I got hit biking to work. I didn't use it because I'm incredibly bad at paperwork.

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