Brad
2011-04-23 19:02:44 UTC
Consider: You pay say $800 a year to insure your car. Over a ten year period that comes to $8,000. Gone. Out the window. You’ll never see it again.
Think about this. Most people don’t have major accidents. Insurance companies know this – and bank on it. For every dollar they pay out (grudgingly and after much-ado, usually) they take in probably ten more. Insurance companies are hugely profitable enterprises. I won’t call them businesses, because businesses – properly described – provide a useful product or service. They also don’t force you to to be a “customer,” as insurance companies do, having successfully egged on their bought-and-paid for agents in state government (that is, politicians) to pass laws making insurance “coverage” mandatory.
It is no coincidence that the bankrupting of America has tracked parallel with the rise of FIRE (Finance, Insurance, Real Estate). When you add up car, life, health and home insurance, many people are spending $10,000 a year or more for …. nothing! They’ve been gulled into believing they’re “covered” but they’ll be disabused of that notion if they ever have to file a claim. Yes, the insurer might pay… something… eventually. But if it does, it will also double – or cancel – your premiums for future “coverage.” Ask anyone who has filed a major claim. Even after decades of just paying in. As soon as the math starts working out in favor of the insured – even a little bit – the terms of the relationship are swiftly altered to correct the imbalance.
Now let’s talk about car insurance specifically. It was made mandatory on the argument that it’s just not right to permit people to operate potentially lethal and always dangerous motor vehicles on public motorways without the driver having the means to compensate potential victims for any damages or injuries he might cause.
But that was just window dressing. The real motive was to create a coerced and captive “customer” base that had no choice but to pay up. Government-enforced cartels are secure from market pressure; they don’t have to worry about pleasing people – because the people have no choice. Oh, they can shop Tweedledee, perhaps. But he’s not much of an improvement over Tweedledum.
read the rest: http://www.lewrockwell.com/peters-e/peters-e40.1.html
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I've long felt the same way about insurance (actually, I'm much more opposed to insurance than the author of this article is). Most people who purchase insurance are basically just throwing their money away. Basically, you would be better off if you took all the money you use to purchase insurance and stuffed it under your mattress (although that isn't a good idea because the Dollar's value is only heading down and I doubt it will ever increase in value again).
I agree that the rise of "finance" and real estate as major sectors of the economy has been disastrous. The entire "finance" industry is basically backed by the Federal Reserve's policy of endless inflation. The finance industry is a "good investment" during the artificial booms (fueled by the Fed), but when the inevitable crash hits, you will lose your money. Real estate was just a massive bubble which fraudulently sold consumption goods as "the best investment you can buy" (does this remind you of today's college advertising?) and got a bunch of suckers deep in debt to the banks.
Nobody my age (early 20s) who isn't wholly ignorant of reality (and yes, there are many people my age whom that description applies to) looks at Social Security as anything other than a Ponzi scheme that will transfer our wealth from us to our parents (who blew their wealth on real estate, insurance, and on dubious investments with the finance industry). Nobody under 30 will ever see a penny from Social Security (I doubt anybody under 40 will). One of these days, people will look back at the Obamacare debate and see how the Democrats compared that debacle to the even worse debacles of Social Security and Medicare (as if these were good things!) and be horrified that people actually held such views. Yet, the insurance industry is even worse than Social Security when it comes to cheating people out of their money for little or nothing in return. It is truly sad that people are willing to hand over their money (and other things much more valuable than money) for nothing more than (often empty) promises of "security."