The end of sexual discrimination in Europe!

[notyoueither]

It was a totally reasonable inference from your post

It was a process that arrived at the regulations, Kuci.

Parents (voters) started calling BS on the rates their sons were being charged.

The government told the insurance industry there had to be a change.

The industry said that rates had to be high so they could pay claims.

The government said fine, limit certain types of injury claims and charge people rates that are affordable.

That is what we ended up with. The industry escaped the ambulance chasers who wanted a million dollars for every strained shoulder and young men can afford to drive to get to the jobs that we really need them to work at.

In this process, why do you think any step besides limiting the injury claims would be necessary?

Because the industry showed they were willing to behave as a herd in gouging young males.

We require insurance as a socially desirable policy. That worked for all involved for many years and then rates for young males began to hit obscene levels.

We decided it was not socialy desirable to have the system extort obscene amounts from a demographic that needs to be mobile to work.

[Kuciwalker]

The point is rate controls isn't to reduce the overall insurance rate for the whole of the population, that's the goal of liability reforms.

The point of rate controls were to make it no longer cost prohibitive for young men to drive. It's a redistribution of premiums. There are negative impacts to prohibiting young males to drive -- they can't afford to pay 6-10 thousand dollars a year to get insured to drive to minimum wage jobs. It's unreasonable.

If the actual cost to insure the liabilities incurred by young male drivers are so large, then it's a good thing they are being kept off the road by the insurance premiums. The benefit to the young male drivers is less than the cost to society, to the degree that the payouts for injuries correctly reflect the amount of harm inflicted.

[Kuciwalker]

Because the industry showed they were willing to behave as a herd in gouging young males.

How so? How do you know the prices didn't accurately reflect the prior liability levels?

[notyoueither]

If the actual cost to insure the liabilities incurred by young male drivers are so large, then it's a good thing they are being kept off the road by the insurance premiums. The benefit to the young male drivers is less than the cost to society, to the degree that the payouts for injuries correctly reflect the amount of harm inflicted.

You are incorrect, sir.

Alberta was dealing with a massive labour shortage at the time these reforms/regulations were passed. Many of the jobs needing doing are in at remote sites and there is no public transit option available.

Also, Asher and I dispute the idea that insuring him cost the industry any more than it cost them to insure me.

[Asher]

If the actual cost to insure the liabilities incurred by young male drivers are so large, then it's a good thing they are being kept off the road by the insurance premiums.

No, it's not. There was a massive labour shortage, many of which were needed in areas far from where public transit existed. The rates were dramatically limiting the mobility of young males in a province where they needed MANY young males to be extremely mobile to get to jobs where they were desperate for people.

Auto insurance became a problem because it was impacting the cost of labour across the province. It was ****ing up the economy.

[notyoueither]

Because the industry showed they were willing to behave as a herd in gouging young males.

How so? How do you know the prices didn't accurately reflect the prior liability levels?

Because young men with no negative record were being charged rates that made not having a car a serious option.

And, no, saying that 21 yo males should not be driving is not a response that is socially acceptable.

[Kuciwalker]

You are incorrect, sir.

Alberta was dealing with a massive labour shortage at the time these reforms/regulations were passed. Many of the jobs needing doing are in at remote sites and there is no public transit option available.

Then the wage paid to attract people to work at those sites would rise to reflect the insurance costs, because fewer people would be willing to work at the site for the lower wage. This would be beneficial because there really is a cost to society of building those remote sites and hiring you men to drive there; each additional young man driving increases the risk of accidents that maim or kill someone.

Prices are how information on costs are transmitted throughout the economy. The only source of the problem, if there was one, was that the actual payouts for injury claims were too high - i.e. the government had set the wrong price.

Also, Asher and I dispute the idea that insuring him cost the industry any more than it cost them to insure me.

But it may well be that the cost to insure people indistinguishable from him (on the basis of the information collected) really was that high.

[Kuciwalker]

Because young men with no negative record were being charged rates that made not having a car a serious option.

And, no, saying that 21 yo males should not be driving is not a response that is socially acceptable.

If the benefit to 21yo males from driving is less than the cost to everyone else from the injuries and deaths that would ensue, then yes, 21yo males should not be on the road.

[Asher]

Then the wage paid to attract people to work at those sites would rise to reflect the insurance costs, because fewer people would be willing to work at the site for the lower wage.

Kuci, you clearly do not understand the context of the province at all.

Even without insane insurance costs, the labour rates were astronomical. Kids out of high school were making $100,000 driving trucks or building the oil sands facilities. The labour costs were actually so out of control it DAMAGED the economy. Suddenly tons of capital projects had to be cancelled, worth tens of billions of dollars, because the labour was too expensive.

And this was after auto insurance reforms. Saying they pay should be even higher is lunacy.

[Asher]

Because young men with no negative record were being charged rates that made not having a car a serious option.

And, no, saying that 21 yo males should not be driving is not a response that is socially acceptable.

If the benefit to 21yo males from driving is less than the cost to everyone else from the injuries and deaths that would ensue, then yes, 21yo males should not be on the road.

Sorry, Kuci, you're slowly entering the realm of being bat**** crazy.

There's a time and place for dogma, but blindly following it in economics (especially in social policy pertaining to economics) is just incredibly naive.

There would be enormous costs to society if young men under 25 could not practically drive. Not the least of which is those people driving anyway (because it IS a mandatory thing in much of Alberta), just sans insurance. The fines for driving without insurance PALE to the premiums they would have to pay legally. It also SEVERELY restricts the mobility of the workforce, and I'm sure you know why that is a Bad Thing.

[notyoueither]

You are incorrect, sir.

Alberta was dealing with a massive labour shortage at the time these reforms/regulations were passed. Many of the jobs needing doing are in at remote sites and there is no public transit option available.

Then the wage paid to attract people to work at those sites would rise to reflect the insurance costs, because fewer people would be willing to work at the site for the lower wage. This would be beneficial because there really is a cost to society of building those remote sites and hiring you men to drive there; each additional young man driving increases the risk of accidents that maim or kill someone.

Prices are how information on costs are transmitted throughout the economy. The only source of the problem, if there was one, was that the actual payouts for injury claims were too high - i.e. the government had set the wrong price.

Prices can also be rents levied by a sector that has a captive market due to government regulation requiring insurance.

The rates for young men crept up and up in relation to everyone else over the course of years.

Are you saying that the industry priced young men incorrectly in the 60's and 70's when driving and drinking (and driving while drinking) were commonplace, and when vehicle safety standards and quality of roads were much lower?

Also, Asher and I dispute the idea that insuring him cost the industry any more than it cost them to insure me.

But it may well be that the cost to insure people indistinguishable from him (on the basis of the information collected) really was that high.

I do not buy it. See above re relative pricing levels and changing behaviour stretching back over 50 or more years.

[Kuciwalker]

Kuci, you clearly do not understand the context of the province at all.

No, I recall your descriptions perfectly.

Prices are how the economy transmits information on costs. Labor rates were high because the cost of "labor in Alberta" was genuinely large. The free market then results in more people moving to Alberta, etc. and eventually the cost should fall. But until then, it is best for companies and individuals to make their purchasing decisions based on the true costs incurred.

[Asher]

No, I recall your descriptions perfectly.

Prices are how the economy transmits information on costs. Labor rates were high because the cost of "labor in Alberta" was genuinely large. The free market then results in more people moving to Alberta, etc. and eventually the cost should fall. But until then, it is best for companies and individuals to make their purchasing decisions based on the true costs incurred.

Again, pure theory. There are limits into how fast people can move to Alberta, and how many people are willing to. Alberta already grew far too fast than was healthy, infrastructure could not keep up. The economy continually demanded more people that simply did not arrive. That's why it took a recession and plummeting oil prices for the market to reset itself, it did not restore balance on its own after many years.

There are limits in the real world that are often not expressed in economic theory.

The market was so ****ed up that Calgary had to go overseas to recruit bus drivers. It was insane. They literally imported people from the other side of the world for the reason of driving public transit busses, because they couldn't find people to do it here. When your economy is in that kind of superheated state with labour shortages, simply thinking more people would come to fix it is just crazy. It's at an extreme.

[notyoueither]

Kuci, you clearly do not understand the context of the province at all.

Even without insane insurance costs, the labour rates were astronomical. Kids out of high school were making $100,000 driving trucks or building the oil sands facilities. The labour costs were actually so out of control it DAMAGED the economy. Suddenly tons of capital projects had to be cancelled, worth tens of billions of dollars, because the labour was too expensive.

And this was after auto insurance reforms. Saying they pay should be even higher is lunacy.

The real issue here is not the oil field worker. At $100K he may well be able to afford $5K for insurance.

It is all the other jobs that cannot pay like that, like in agriculture, forestry, construction, mining, and services for the rural population.

[Kuciwalker]

Prices can also be rents levied by a sector that has a captive market due to government regulation requiring insurance.

The auto insurance industry is reasonable competitive, which dispels that.

You are also missing the purpose of mandatory liability insurance. The government has set a high price on injuries and deaths from car accidents. The price is so high that many/most people who caused them would not be able to pay, and would declare bankruptcy; this means that they don't actually feel the full deterrent of the high price on their behavior*. By forcing everyone to have liability insurance, people feel the full cost of their behavior, and so they will choose not to drive if the cost to society is lower than the benefit to themselves. It causes people to internalize the harm done to others, and thus increases total wealth/happiness.

*Additionally, it means the people who should be compensated for their injuries do not receive the compensation, but that is actually the secondary concern. After the injury has happened, the transfer of money doesn't create more wealth for society; the transfer could come from the government as well.

The rates for young men crept up and up in relation to everyone else over the course of years.

Are you saying that the industry priced young men incorrectly in the 60's and 70's when driving and drinking (and driving while drinking) were commonplace, and when vehicle safety standards and quality of roads were much lower?

I bet payouts for injuries rose over the same period, even after adjusting for inflation.