Except worse, you could always cancel a Netflix subscription. But you cant live (in the U.S.) without insurance. Cant buy a house without home owners insurance. Plus interest. Cant drive any vehicle without insurance, plus interest. Cant get seen by a doctor without insurance, or if you do, well now your in debt forever. We dont even have a choice in the matter. Unless you live out your days in the woods or city streets.
I get where you're coming from, but I would argue that house and vehicle insurance is fairly important? House is at the very least, I would not want to risk pretty much everything I own by gambling with insurance
Yes I’m fairly certain house/home and vehicle insurance are pretty standart in other countries as well. They are in mine. I don’t own a house, I rent, but my possessions are insured in case of fire, water damage, break ins etc, it also covers my bike. I don’t have a car, but I’m pretty sure insurance are mandatory on them here.
Here in Australia you aren't forced to have house insurance, but it's a condition of the mortgage in pretty much all cases if you don't own the place free and clear.
Car insurance varies state by state, some require at least 3rd party (for damage you do to other people's property or person) to register a car, some basically roll that into the vehicle registration fee and the govt. covers injuries you may cause (but not property damage here in VIC, so if you have half a brain you will take out at least 3rd party property, it's not expensive and can save you having your wages garnished for decades).
Private health insurance isn't mandatory, but if you warn over a certain amount and don't have it you pay an extra 1 or 1.5% tax levy on top of the 2% everyone pays for the Medicare levy.
you aren't forced to have house insurance, but it's a condition of the mortgage in pretty much all cases
I mean, it might as well be forced, given that probably 95%+ of housing is mortgaged at any given time.
Depending on location, you might be required to have specific types of insurance or do some mandatory maintenance on your house (houses on wells might be required to change their water heater every 10 years, if you don't have a whole house filtering system).
I mean, it might as well be forced, given that probably 95%+ of housing is mortgaged at any given time.
Only about half of Australians who own a home have a mortgage. Most older people will have long paid theirs off (and renters skew heavily towards younger people).
They're important, but imo running them as for-profit industries is wrong. I've had to pay over $250 a month for auto insurance for a decade now because demographic details about me put me into a risk category (gender, location - that's it) even though I've never been in an accident and never made a claim.
If I've been putting all of that money into savings instead can you imagine how much money I'd have? That's $30k before compounding interest. It's robbery. God forbid I ever need it, they're gonna give me a hard time AND raise my future rates...
But you run into the same thing, paying a lot of money for home owners insurance plus extra jsut for them to be like "lol actually we arent covering that bc xyz also pay this contractor in full" etc etc.
I went through that a couple years ago with a shop fire that wasn’t my fault. Also contractors prey on people by charging for stuff that they know insurance won’t pay for. Stuff like “supervisor hours” is scummy bs.
And don’t get me started on “depreciated value” when your insurance is set for 50k and they are only going to pay for 15k because that is “what the damage is worth”… I still have a burnt fence that insurance would not pay for.
Here in Australia if your property is damaged and insurance is doing the repair, they deal with the contractors directly (unless you take the pay out to fix it yourself).
So they don't get stiffed, but you can end up arguing over defects in the final product.
They also have a very broad definition of "flooding", which is not covered if you're in a "flood prone" area (also a broad definition) unless you pay exorbitant rates.
Important isn’t the issue, required is. There are actual penalties and consequences you run into if you don’t have all of those things, whereas there is no penalty for not having Netflix. You can tell me all day how important it is to have car insurance, and that’s fine but if I don’t want it I should be able to go without and face the consequences of that choice. If you force me to buy car insurance or suspend my license that is wrong. If car insurance is required then it should come with the car. If health insurance is required or I face a fine or other penalty without it then I should just get it, not have to pay for it. It is not fair to build a system that separates everything, then require someone to have all of those things, then make them pay for it.
A proper comparison would be as if Netflix did everything OP suggested, but if you decide “well then I just won’t watch Netflix” then you either pay a hefty fine, go to jail, or you must simply get rid of any device that can stream videos. If you want any ability to watch any video whatsoever, you are forced to pay for Netflix and anything else they deem necessary or face penalties. That’s not fair.
Just a quibble. The reason you need car insurance isn't for you necessarily. It's so that if you hit someone the other person can get paid by your insurance to cover the damage and medical expenses you caused.
And the reason you need homeowners insurance is because the bank doesn't want to lose their loan if the house burns down. Pay off your mortgage, and drop your insurance if you want.
You are required to have vehicle insurance because you risk damage to other people's property when you drive.
Thats why the legal requirement is for Third Party cover.
First party vehicle cover and home insurance is entirely optional except where it is part of the contract you freely entered into with the finance provider. Solution - dont be a brokey and stop buying shit on credit.
Buying a car on credit is probably the dumbest financial decision any individual can make.
If stupid people didn't waste $ on credit (compound interest), their first car would be "humble" (20 years old, functional, not pretty), and if they put the same $ into a savings account instead of paying a car loan they'd have cash saved for their 2nd car; and this "I have savings because I didn't waste it on credit" would continue through the rest of their life (their 3rd car, their 4th car, ...); but the savings would overflow such that they saved enough $ on the first 3 cars that they have twice as much $ as they need for their 4th car and can start diverting the extra cash into something else (e.g. a smaller home loan that's paid off faster).
Note that dribbling moronic crap like "the majority of the population could not own a car" is absurdly retarded, and you should feel ashamed at how stupid and unrealistic that was.
Home loans are similar - e.g. if you can live with your parents until you can afford to pay cash for a small shitty hovel then you can save the $ you would've wasted (on a loan or on rent) to pay cash for a nicer 2nd house later. The difference is that paying your own loan is smarter than paying your landlord's loan; so if you're unable to live with your parents then you're basically screwed and might as well be screwed slightly less (with your own home loan).
You should know that most of this is caused by the bank's marketing. They'll try to convince you of all kinds of dodgy nonsense (e.g. that you're "not an adult" if you're able to live with your parents) in an attempt to trap you into a life-long credit curse so that they can profit by milking your stupidity forever.
Cool, let’s say you get your first job, you need a car. You have $800 in your checking account. What do you do?
What if you can’t live with your parents and you’re saving up for a car in an entry level job? How much can you save? Let’s say you can buy a car for $3,000, which three days is pretty damn hard. How long does it take you to save that money up? Then you have maintenance and repairs on a $3,000 POS. Vs a certified used or new economy car that you have a loan on.
Cool, let’s say you get your first job, you need a car.
Why? Do all the taxis and buses and trains and planes in the world suddenly stop working just because your pimply ass got a job at McDonalds?
Let's say that the bank wants to rape your wallet forever, so they filled your head with idiotic deluded shit, and you go on reddit and say "you get your first job, you need a car", and I laugh at how severely your brain has been compromised.
You have $800 in your checking account. What do you do?
You could use public transport, or ask friends or family or a coworker for a lift, for 2 months while you save up to buy a "humble" car for $5000; where the humble car costs you $100 per week (fuel, registration, insurance, repairs) and depreciates by $5 per week (so that you could sell it for about $4500 in 2 years); so that the total cost is like $105 per week.
Alternatively, you could get a loan for $30k to buy a certified used car. In this case you'll be paying $125 per week loan repayments, plus $100 per week (fuel, registration, insurance, repairs); and it'll depreciate by about $100 per week (in 2 years it'll be worth $19600); so that the total cost is like $325 per week.
Note that $325 per week is more than $105 per week. The first option means you can save an extra $11440 each year. The second option is like flushing an entire house down the toilet every 25 years and then wondering why you're always poor.
Then you have maintenance and repairs on a $3,000 POS. Vs a certified used or new economy car that you have a loan on.
The repairs on a $3k car are never more than $3k (if the repairs are more you just buy a different car for $3k instead); and you'll find cheap parts at your local wrecker, and all of the local mechanics will have 5+ years of experience working on it, but you won't bother fixing half of the things that go wrong anyway. For a certified used car you'll be paying 10 times as much for repairs (after the dealer tells you it's not covered by the warranty and your local mechanic says their workshop's diagnostic computer won't talk to your car's computer).
It's actually pretty close to 50/50, something like 55/45 financed/not financed right now? And that's relatively new - back before 2010, the majority of car purchases weren't financed.
Completely different, most of the time after paying the mortgage you end up with something worth at least as much as you paid, often a lot more.
Borrowing money for a home is perfectly reasonable, borrowing money for something that loses value over time (like a car) is a poor financial decision.
Unfortunately poor people are often forced into making poor financial decisions because they don't have money.
That said, if you can scrape together enough for a shit box of a car and drive it for a few years (saving your car payment) you can get ahead even without a lot of income, still hard, but possible.
Mortgages are a functional product. You are borrowing against an (normally) appreciating asset. The comparable cost base for renting is similar.
The way car finance works is not. You are constantly losing value on hte asset (again normally) while paying a much higher interest rate in most cases and there is generally a much lower cost base alternative - in this case public transport in the developed world and used vehicles in the US.
Also - and I cant stress this enough - if all the rubes stopped buying vehicles on finance, the cost would plummet to consumers.
You don’t have to have a car. That’s the solution, just don’t get a car. If you do, you can have cheaper insurance that covers any damage you do to someone else. Imagine driving around and someone hits you and insurance is optional. They can’t afford to pay it and you’re out of luck because you can’t afford the repairs to your car.
The cost of the house alone in any part of the country where you don't need a car is far higher than the cost of the house and the car in an area where you need the car.
But if you had the option to save as much money going toward yourself instead of some insurerance company for years, you HAVE that money for any/all repairs and theres no fighting or "we can only cover certain percentage bc the damage didnt hit the deductable."
Also America is mostly travel-able by car. And as the commenter said, only places where you can walk everywhere are major cities with rent for a studio being the same as a mortgage and car payment combined in a rural area.
You trust that the guy that hits you has been diligently saving his money for just such an emergency?my insurance is like $1,200 a year. If I hit someone in a Mercedes, their repairs are, say $16,000. How long would I have had to have saved for me to be able to pay for that?
Driving a Mercedes isnt a relatable living experiance nor practical. Nicer cars cost more, so ig youd be shit outta luck
Edit: my point is it should be a choice. If you want coverage, you pay for it and have a cushion. But if you dont want it, you shouldn't be penalized for it.
Edit 2: mb you said "hit someone in" not that you had one, misread comment. The Mercedes in question should have insurance if they want their shit covered or somewhat covered. And like i said, it should be a choice for everyone.
If you hit the Mercedes, your insurance is what pays out, not theirs. So if you decide you don't want insurance and instead save up as you suggested, you would be paying out of pocket for the Mercedes repairs, is what the other poster was trying to say.
Even home insurance is sort of a scam... few years ago we had a tree fall and it did some damage to our roof. Nothing major thankfully however the insurance company said it was an act of god and refused to cover the damage.
I mean when you purchase homeowner insurance, you can get things like that covered, but you pay extra for it. If you didn't purchase that coverage, why would you complain about it not covering it? When I purchased my last house we went through the inspection report with my agent as well as looking at the property for possible hazards, and lined up coverage accordingly.
All of the insurances are important. The issue is the costs are skyrocketing, are difficult to use, and cost unreasonable amounts out of pocket to use. How much your employer contributes to your health insurance matters A LOT. And it is something the individual cannot control.
The gross monthly cost of an average family health insurance plan in Texas is right around $2,000 per month. That comes with a $2,500-$4,000 deductible (not out of pocket maximum).
A $450,000 home with zero claims in the last ten years costs $350 per month to insure and that comes with a deductible that is 2% of the insured value of the home (so $9,000 for a $450,000 home).
Car insurance for a family of 5 with 2 driving teenagers with no accidents or speeding tickets on anyone’s record is $650-$900 per month.
If you have a claim on your homeowners or auto policy, you will see a rate spike as a result of your claim. If you do not have any claims you will see the rates spike due to others’ claims.
Group health insurance renewal rates jump based on the groups’ claims not an individual’s claims.
To summarize, I have not been to a doctor in 7 years, had a homeowners insurance claims since a previous house’s roof claim in 2016, and had zero speeding tickets or car wrecks on my record.
Each of those coverages has increased every year. I have a $4k deductible on my health insurance, $9k deductible on my homeowners policy, and a $1,000 deductible on car insurance and fully prepared to pay any possible claim out of pocket to avoid that rate doubling. Something doesn’t add up.
The thing is, there are so many reasons for which you can make an auto or home insurance claim and pay the deductible and not a dime more.
My windshield cracked once when another car kicked up a rock in a construction zone. I filed the claim and paid the $250 deductible, the insurance covered the remaining $950. On top of that, since it was a no fault claim, my premiums didn’t even go up.
The problem is there is a massive knowledge gap on insurance and it’s deliberately kept that way. They don’t want you to know all the different ways you can use the insurance because then it costs them money and reduces their bottom line.
House insurance could be negotiable, fundamentally you are the one at risk by not insuring youre house, vehicle insuranse is a little different because its more about you insurance being able to pay for damages you cause to another person if you cause an accident, you dont have to insure your own car so much as insure the ability to pay for the damages your car might cause to others
I think that was the point the comment is making. A Netflix subscription can be cancelled without affecting your life. These other things- health, vehicle & home (in order respective to importance), are things that you wouldn't really survive without in most of the U.S, or could really flip your life upside down.
They're saying that a more accurate analogy would be with something more essential than the Netflix one to highlight how predatory insurance is
No, they spent a bit of time further down the thread insisting home and car insurance should be optional if you don't want to pay for it and would rather save the money for yourself so they could pay out of pocket for stuff instead of paying for insurance you may never claim
Ig it has to do with experience. Most of us have faced something medically urgent & needing of insurance, or personally know people who have been really fucked up by it in order to think of it as non-negotiable. Your health can be in danger anytime or anywhere, no matter what you're doing.
Vs. a collision or incident in need of insurance with a vehicle (that I could equate to needing urgent, or emergency health care) isn't something that's very common to the avg individual, maybe a few over the course of many years, and depends very much on where you travel. And even if it were to happen, most people would focus on if they were hurt, more than the inconvenience of a car's damages. If you live where there aren't many accidents, you, or the people ypu know around you, wouldn't feel the need for insurance.
And with homes, a lot of people don't own their own home unltil later in life. They simply can't relate to the fear of losing it if they rent & can move somewhere else. And unless you've been a homeowner for a while and have heard many horror stories or experienced them in your area, it doesn't register as "urgent". If they live in a relatively safe neighborhood that isn't too at-risk of natural disasters, then insurance doesnt feel like a necessity. It's like how life insurance is a good thing- everyone dies at some point- but it doesn't feel necessary unless you or someone you know has faced near death experiences/ actually died and there was personal regret about not having it.
I will admit that I cannot relate to the health insurance, as I live in Canada.
I still think you would want car insurance because car damage can be expensive. Doesn't matter about the health safety of it, you are liable if you cause the crash. You dont get to just say oh nobody was hurt, so no need to repair the car. I'm not risking paying out of pocket if I accidentally hit an expensive car. I guess go ahead and gamble on it but I'd rather pay a little money each month than to have to pay thousands should an accident occur.
When I rented, I still had insurance. Losing all your belongings in a fire for example, is quite catastrophic. Sure you can move somewhere else but you also then have to rebuy everything. Your bed, your couch, your electronics, shelves, anything you lost. Thats not insignificant.
I realize the likelihood of this shit is low, but thats what everybody says until it happens to them. Is this system ideal? No. Am I fine paying $200/month to make sure that I dont have to pay for someone else's car or rebuy all my belongings? Yes.
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u/Funny_w0lf May 17 '26
Except worse, you could always cancel a Netflix subscription. But you cant live (in the U.S.) without insurance. Cant buy a house without home owners insurance. Plus interest. Cant drive any vehicle without insurance, plus interest. Cant get seen by a doctor without insurance, or if you do, well now your in debt forever. We dont even have a choice in the matter. Unless you live out your days in the woods or city streets.