Car Insurance Concepts Should Affect Medical Health Insurance

Many Americans depend on their own automobiles to get at work. No automobile means no job, no rent or mortgage money, no food. 

Just one parent, battling to pay the bills within the suburbs with 100,000 miles around the odometer, would presumably welcome the guaranteed chance for low-priced insurance that will take proper care of every possible repair on her behalf auto before the day it reaches 200,000 miles or falls apart, whichever comes first. Particularly if the insurance coverage is valid whether or not she even changes the oil within the interim.

Why aren’t the car insurance providers writing such coverage, either directly or through used auto dealers? And given the significance of reliable transportation, why is not the general public demanding such coverage? 

The reply is that both auto insurers and also the public realize that such insurance can not be written for any premium the insured are able to afford, while still allowing the insurers to remain solvent making a profit. Like a society, we without effort realize that the expense connected with taking proper care of every mechanical necessity of a classic automobile, particularly even without the regular maintenance, isn’t insurable. Yet we do not appear to possess the intuitions regarding medical health insurance.

When we pull the feelings from medical health insurance, which is admittedly difficult to do for this author, and check out medical health insurance from the economic perspective, there are many insights from car insurance that may illuminate the look, risk selection, and rating of medical health insurance.

Car insurance is available in two forms: the standard insurance you purchase out of your agent or directly from an insurer, and warranties that are purchased in auto manufacturers and dealers. Both of them are risk transfer and discussing devices and I’ll generically make reference to both as insurance. 

Because auto third-party insurance doesn’t have equivalent in medical health insurance, for traditional car insurance, I’ll examine only comprehensive and collision insurance — insurance since the vehicle — and never third-party insurance.

Bumper to Bumper

Listed here are some generally recognized concepts from car insurance:

* Bad maintenance voids certain insurance. If the automobile owner never changes the oil, the auto’s power train warranty is void. Actually, besides the oil have to be altered, the modification must be done by an authorized auto technician and documented. Collision insurance does not cover cars purposefully driven more than a high cliff.