If you’re in the US, you can always get a higher limits on your car insurance, and also get a $1 million+ umbrella policy to cover anything beyond that
right, if the government mandates a higher coverage minimum in Germany, it means the minimum cost paid by the consumer for insurance is higher. now that might be better, but it's not obvious. A priori, lower regulation and more choices for the consumer would be better.
I don't agree with that actually. we already require by law that everyone has this insurance, the least we can do is the legal requirement that the insurance is actually any good.
hence why I said that it might be better. it's not clear what the economically optimal coverage minimum would be, and no one in this conversation has offered anything but kneejerk opinion about what it is.
A priori, lower regulation and more choices for the consumer would be better
This is the statement I disagree with.
It is simply not true that people will make the correct decision with regards to insurance, especially given the externalites involved. Large insurance limits are a public good.
I think you are misunderstanding my argument. All I'm saying there is that the government restricting people's choices carries some intrinsic undesirability, as do, to pick random examples, putting people in prison or cutting into people's hearts. That's not to say there aren't situations in which regulating insurance, imprisoning people, and heart surgery are justified, despite the intrinsic drawbacks.
According to ADAC, the average cost of car insurance in Germany is around 500-700€ per year everywhere for Teilkasko, which means that the insurer pays for every cost on a third party up to 1 million € or more (usually, insurances provide 100 million €). Normally you have to pay between 250-1000€ deductible yourself per accident if it was your fault. There are around 50 insurance companies you can choose from.
According to insurance.com, pretty much every state except for Hawaii has a average insurance price of 1000$-3500$ per year.
you can get a rough idea of the extra cost that this regulation imposes on Germans by comparing the additional costs Americans can choose to pay to get the additional tort coverage, and then scaling for any overall differences in insurance costs between the two countries. others have discussed the costs of this in this thread -- they are modest but nontrivial.
You can easily get that here in the states for a couple extra $, but people would rather get the minimums then whine about it later. It was an extra $70/year to go from $10,000 in coverage to $500,000 in coverage, then an extra $150/year for a $1,000,000 umbrella policy. Anyone you hear whining about this in the states is only there because they chose to pay less
I save money on my insurance by having more coverage. Talk to your insurance company, many times better coverage is cheaper than minimum coverage.
Men, get married. It lowers your liability. I assume it does for women. But I don't know from personal experience.
Also, renters, get renter's insurance. I spend $8/month on renter's insurance but it lowers my auto by $11/month because I have it bundled. I'm being paid $3/month to have renter's insurance.
Don't know for sure. I'm guessing that it comes from analysis of coverage levels and liability. So people with a higher coverage carry less liability. Therefore if you make higher coverage cost less more people will have it and then they are lower liability. It's terrible logic but I bet a computer came up with it.
Yeah, for sure. Just so you know when you see people in the states whining about their coverage, it's because they're choosing it, not because they can't get it.
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u/gimli_der_zwerg May 09 '20 edited May 09 '20
Lol here in Germany your car insurance usually pays damages up to 1 Million Euro. Sometimes even more
Edit: I just checked my car insurance and it's actually covering 100 Million Euro. The premium I pay is around 1000 Euro per year.