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Comment by ISL | Hacker News Reader

One could make the same argument against car insurance, and most kinds of insurance.

I'm pretty sure that if car insurance were somehow banned, especially medical-liability, fewer people would own and operate motor vehicles.

Insurance exists to put an upper bound on risk; the bad thing will hurt or be inconvenient, but with insurance it won't kill you. Perverse incentives appear in the case where the insurance payout is greater than the inconvenience/pain of the insured event. Until that threshold is breached, however, I don't think there's a case against insurance (and insurers that inadvertently pay people to have accidents rapidly go out of business).

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Insurance has high upper bounds of coverage, liabilities over this are very unlikely to occur. AFAIK you can't get car liability insurance for infinity dollars. So in theory everyone is accepting some risk even with insurance, they just feel that it's small enough to be worth it.

There are plenty of places on earth that have very little car insurance penetrations so we don't have to guess what that would look like. To me it looks pretty much the same. The major difference is that it's difficult to sue for liability and the people you're suing don't have much money so it's often pointless. Society just accepts that accidents happen, people die, and the survivors move on.

In these, often highly unequal societies, the people who have money have a lot of it so they in effect self insure.

By 'upper bound' here, I meant for the insured.

Above the deductible (and premium payments), the insured's exposure is largely lost time and headaches, the remaining financial burden is borne by the insurer. If anything, the presence of insurance might increase the amount of compensation an aggrieved party might be able to reap.

Agreed that there are plenty of places in the world where car-insurance is non-existent. In those places, accident victims may not receive proper compensation for their injuries/destroyed property or the recompense may not be monetary in nature.

I re-used the 'upper bound' for the insurance - there is no upper bound in liability for the insured. Tort law does not specify a limit in liability - though it can be a bit complicated as there can be other laws around this. A 'fully insured' person is taken to mean sufficiently insured to meet a law, or sufficiently insured to meet a reasonable level of liability. While highly unlikely it's possible that someone with $1,000,000 in insurance can incur $10,000,000 in liability.

To your final point, life is unfair yet it continues. I understand that you wish the world would always provide proper compensation for victims, my position is that even if that was theoretically possible, which I don't think it is, it may not even be optimal.

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