Different method of buying insurance: Insure the driver/rider

[DOHC1]

I was wondering, what would be the drawbacks of a system where you buy insurance for the Driver/rider, rather than for the car. IE: right now, we buy insurance for the vehicle, and the rate is based on the driver’s record/age/ location plus a few variables. However, why shouldn’t this driver be able to drive another car that is plated? A system where every vehicle must be:

1. Plated with valid stickers etc
2. Be operated by a driver who is insured for liability in the event that they cause damage while operating a vehicle

The only problem I see with this is that some vehicles are higher “risk” than others, as claims history on the vehicle will show. (ie: A Toyota Corolla is probably less of a risk on the road to the insurance company than a Nissan Skyline). How about classifying vehicles into different categories, (ie: Class A vehicle is low risk, Class B is higher risk, and so on).
When I buy insurance, and my daily driver is my high risk Nissan Skyline (a “Class E” car), I am insured for all vehicles up to a class E (I would not however, be allowed to drive a class F vehicle, because I have not paid for that risk).

Meaning as long as the car is plated, I can hop into a class A, B, C, D or E car and drive off with NO added risk to the insurance company. Obviously I cannot be driving more than one vehicle at once, so how is it different from the current system..there is still ONE driver and ONE car on the road, and the driver has paid for the risk they pose while on the road.
Theft /comprehensive is optional and can be purchased separately for your own vehicles if you want.

I understand that insurance companies would never support this because it’ll stop the money they make from people who have multiple cars…but this system just seems to make more sense to me.

 

[OpenGambit]

I was wondering, what would be the drawbacks of a system where you buy insurance for the Driver/rider, rather than for the car. IE: right now, we buy insurance for the vehicle, and the rate is based on the driver’s record/age/ location plus a few variables. However, why shouldn’t this driver be able to drive another car that is plated? A system where every vehicle must be:

1. Plated with valid stickers etc
2. Be operated by a driver who is insured for liability in the event that they cause damage while operating a vehicle

The only problem I see with this is that some vehicles are higher “risk” than others, as claims history on the vehicle will show. (ie: A Toyota Corolla is probably less of a risk on the road to the insurance company than a Nissan Skyline). How about classifying vehicles into different categories, (ie: Class A vehicle is low risk, Class B is higher risk, and so on).
When I buy insurance, and my daily driver is my high risk Nissan Skyline (a “Class E” car), I am insured for all vehicles up to a class E (I would not however, be allowed to drive a class F vehicle, because I have not paid for that risk).

Meaning as long as the car is plated, I can hop into a class A, B, C, D or E car and drive off with NO added risk to the insurance company. Obviously I cannot be driving more than one vehicle at once, so how is it different from the current system..there is still ONE driver and ONE car on the road, and the driver has paid for the risk they pose while on the road.
Theft /comprehensive is optional and can be purchased separately for your own vehicles if you want.

I understand that insurance companies would never support this because it’ll stop the money they make from people who have multiple cars…but this system just seems to make more sense to me.

Sounds like it would complicate things considering each vehicle would still need to be insured separately for comprehensive purposes. It sounds like an extra layer of work.

One clear drawback is that it would make it a lot harder to lend out your car.

If I had a skyline and my mom had a camry, and her car broke down, does that mean I have to drive her all over the place? or call the insurance company so she can get groceries?

What if I go out, drink a lot, and my designated driver has a licence but no car?? can't drive everyone home?

Does that mean I can't go and test drive a ferrari?

What if a car that you don't put insurance on because you have 5 cars gets stolen and the theif crashes and paralyzes someone, does that make the victim out of luck?

 

[nobbie48]

I thought some of the provincial insurances were like this already. The driver pays insurance based on his rating and the car owner pays on the nature of his vehicle. Fords are cheaper to fix than Ferraris and idiots are more claims expensive than safe drivers.

I'm not sure how out of province drivers are treated if they borrow a friends car while on vacation.

Ontario rates are basically set the same but the insurers package the car and driver rates together. The policy shows the breakdown.

This would only benefit someone who intends to loan out his or her vehicle. Something the insurers wouldn't necessarily encourage. Nor would I. I suppose it also benefits someone who wants to borrow wheels.

Like OG says too many variables as well.

If someone was stuck and I felt any compulsion to supply them with wheels I would rather reimburse their rental costs. Keep me out of it.

 

[nakkers]

Rates and coverages are based on the drivers and the vehicle. It's not one or the other, it's both.

There is coverage for the uninsured motorist.


If you let some one use your vehicle and they have insurance elsewhere, that insurance will cover them. It their coverage isn't sufficient, you can look at your insurance as well. Depends on the circumstances of the claim and it's best to discuss with a broker/agent. There are too many varables to mention. Let's just say, it's not a great idea to lend out your vehicle to anyone. It's really not worth it.

 

[VifferFun]

I think I've discussed this in the sticky thread ("I help set rates . . .") but it might be tough to find in there.

Under your proposed scenario, a husband and a wife who share a car would have to pay twice the premium that they do today. Your proposed methodology would help the wealthy (i.e. those who can afford more vehicles than they have operators) at the expense of the less fortunate (i.e. families with a single car).