Tuesday, December 06, 2005

Unintended consequences

I very much enjoyed the first comment in this post about unintended consequences of government regulation
1970 - Massachusetts becomes the first state to pass "no fault" car insurance regulations. By the mid 1970's fully regulated rates are in place for auto coverage.

But wait...

2005 - Massachusetts continues to be among the states with the lowest number of insurance providers. It's citizens also pay the highest rates in the nation for their demographic category.

Now why didn't that work?? Well, if you ask them, which I have, they plead ignorance to the cause, but will then assure you that if the market is deregulated and allowed to be competitive their rates will go up. (I'm not making this up.)

If you show them charts and graphs of their rates versus other similar states who enjoy lower rates, which I have, they are baffled.

Would it make sense to require one year of macroeconomics for high school graduation?
One of the many reasons that I've chosen to leave MA is the asanine car insurance regulations in this state. My wife and I share one small car, and the insurance we pay on it is far in excess of the depreciation, car loan financing, and gasoline costs combined. If the state was 30 degrees warmer they may be able to get away with regulation this dumb, but it's December and I'm not feeling charitable.

My car insurance company, the ludicrously overpriced AMICA, sent me a letter saying they were agitating for a more competitive car insurance market and that I should call my Congressman and complain. It was like the twilight zone.


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