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Originally Posted by 86MLR
Meh, for a "small" sum of money, which can vary, Australians are covered bu a "green slip" for up to 20 million dollars...
We also have comprehensive and third party
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In the US, we don't have anything like your inexpensive blanket $20 million limit. That may be possible in your country, but it would be difficult in ours.
You have about 7.5% of our population, less than the state of Texas spread over an area comparable in size to the entire lower 48 states in the US. I would anticipate that generally your accident and claims rates are lower. Lower population density usually results in lower numbers of claims.
Our accident and claims rates are high enough that private insurers would balk at offering coverage that high at a price that most people could afford. If we tried to make that a government program, voters would balk at paying the increased taxes to fund it.
Additionally, I'm under the impression that Australia has a much less litigious society than we have in the US. If everyone had a $20 million liability policy, lawyers here would be involved in every single accident trying to get as close to a $20 million payout as possible. We would likely see runaway claims expenses driving the cost up beyond anything you would expect to see in your country.
I wish we could have what you describe. But it ain't gonna happen during my lifetime. A few of the less populous states like Wyoming or Alaska may be able to make it work at the state level, but then, their claims are so low they don't really need it.
Quote:
Originally Posted by 86MLR
Comprehension skills: I could be wrong, but, it seems that in Canada the government covers your "green slip", is this typical for America?
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Not in the US. Our motor vehicle insurance is offered by private companies.
It's also not federal. Our Constitution spells out what the federal government can do and reserves all other powers to the states. Regulation of insurance falls under those reserved powers. We have no nationwide department of insurance. (There is a federal insurance office under the Treasury Department, but they don't have any regulatory power over the states.)
Therefore each of the states and territories has its own set of motor vehicle laws, its own set of insurance regulations and its own set of intersections between the two. Each state sets its own minimums for insurance coverage. Most states require liability insurance for property and personal injury liability. Some also require uninsured motorist coverage, but not all. Some even allow you to opt out of the insurance requirements by self-insuring instead. At least one has no minimum requirement at all (although you're still liable for damage you cause under regular tort law).
Specific to this thread, in California (where OP is), the minimum required insurance for property damage is $5000 of coverage. In Florida (where I am), the minimum is $10,000. Many states require $25,000.
How much the insurance premiums cost also varies wildly depending on your risk factors. One of the major risk factors affecting price is location. In a place that has more claims expense, the risk is higher, so the insurance costs more. Florida's crappy insurance regulations encourage higher claims, so we consistently place within the top three for highest average premium in the country.
Quote:
Originally Posted by 86MLR
It seems that my point may have been missed in previous posts, my initial statement was how can someone be out of pocket when there is insurance that can cover all situations.
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Cost.
Higher levels of coverage above the minimums certainly exist, but they cost more. Each individual has to weigh the risk of an accident against the cost to insure against it. Most people buy the state minimum and never have a problem, so the risk seems low.
When weighing payment of an extra $1000 or $2000 now against a future event with a completely ambiguous cost attached that may or may not even happen, the majority of people choose to take the risk. It's difficult to compare something that will happen ($1000 leaving your bank account) with something that probably won't happen.
Further complicating this risk analysis is that lawyers don't like to sue people for money they don't have. Liability cases are usually taken on contingency, meaning the attorney doesn't get paid unless you get paid. If the guy you're suing doesn't have anything, you don't get paid, so your lawyer doesn't get paid. Even if the defendant does have means, he'll probably tell the court he doesn't and work out a payment plan instead, which means the lawyer's payday will be delayed or evaporate altogether if the defendant doesn't make the payments.
Lawyers don't like to take cases where they're unlikely to get paid for their work, so where they focus their attention instead is on companies and high net worth individuals. They sue insurance companies for policy minimums and beyond. They sue trucking companies. They sue rich people. If you're out to lunch on your own and drop by a branch office to pick up some paperwork on your way back to your office, they'll try to sue your employer.
They generally don't like to take cases against people like OP who have $100 in their bank accounts, unless they see that OP has spent $9K at a casino and $13K to fix his own car and therefore obviously has some source of funds other than that $100 in his account.
That focus on the deeper pockets leads to a false sense of security in which people think, "I'll buy the minimum, and if something bad does happen (which it probably won't), they won't go after me anyway because I don't have anything to take." See that attitude with OP. He thinks they can't get anything because he only has $100 in his bank account.