> 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?
Do you think there’s a difference in insurance premiums between the 2005 Ferrari and 2005 Hyundai?
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.
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 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.”
If it helps, change my proposition to use a 2015 Ferrari as the example.