Without all this insurance, most of us would be pretty rich.

Or at least, not poor.

But that (us being poor, or at least struggling) may be exactly what’s wanted.

It is very hard to acquire capital assets, avoid debt and build up savings when one is forced to spend a large and growing percentage of one’s income on various – on multiple – insurance policies.

Many of us understand this – which is why they have to force us to buy insurance. Self-interest would prompt us to “cover” our cars, our health and homes… if it really were in our self-interest to do so. For the same reason most of us elect not to play Russian Roulette.

The truth is, to a great extent, it’s not in our self-interest to buy all this “coverage.” This can be said to be true of anything that requires the application of coercion to get people to go along with it. Unless you take the position that most people are blithering idiots unable to act rationally in their own self-interest. Which, when you think about it, is a stupendously arrogant and condescending opinion to have of your fellow men – and one that radiates the implied personal superiority (rarely justified) of the person who holds that opinion.

Most people are not blithering idiots. They can, for example, do supermarket math. Which means they can figure out that car insurance (for openers) is a terrible deal for most people.

According to Forbes magazine, the average cost of a standard auto insurance policy is $1,510 annually (see here). You may pay a lot more than that, of course. Many do. Very few pay less than that. And we’re all forced to pay something (assuming we’re not riding the bus) whether we feel we need to or not. And regardless of whether we’ve ever once caused harm to someone else or their property.

Fifteen hundred (and ten) bucks a year. Over ten years – this is about how long most of us will keep our car before buying another – we will have paid out more than $15,000 to the insurance mafia (and “mafia” is the proper term for a gang of thugs that forces you to do business with them).

This is a lot of money.

More money than some people spend on the car itself. Even if you bought a $30,000 car (and assuming your premium only cost $1,510 annually – which isn’t likely) you’re actually looking at a $45,000 purchase. Now you know why the duration of the average new car loan (5-6 years) is roughly double what it was 40 years ago (3-4) when it was still possible to decline insurance – which exerted a necessary check on the cost of insurance generally for those who did not decline.

Don’t be deceived by the apparently higher sticker price of new cars. When adjusted for inflation, you can still buy a basic car today for about what a basic car cost 40 years ago. A bare bones 1975 Chevy Nova (back then, equivalent to something like a new Nissan Versa today) had a base price of $3,099. Adjusted for inflation, that sum in 1975 dollars is equivalent to just under $14,000 in today’s dollars. This is actually more than what you’d need to pay to acquire a bare-bones modern equivalent such as the aforesaid Nissan Versa (which – unlike the ’75 Nova – comes standard with AC).

Now, it’s certainly true you can spend more on a new car today than most people spent back in ’75. But the point is, you do not have to.

Whereas you do have to buy insurance.

If you want to own a car without worrying about a Luca Brasi type paying you a visit.

And because the insurance mafia is legally empowered to make you an offer you can’t refuse, the price goes up, up up. It now costs twice or more what it used to cost to insure a car back in the ’70s – when it was still possible to decline coverage.

This ought not to be surprising to anyone. How much do you suppose a fast-food burger would cost if the government passed a law requiring everyone to eat at McDonald’s – or Burger King – at least once a week? When you’re not free to say no, the free market no longer exists. Cartel/crony capitalism ensues. It enriches the cartel – and impoverishes us.

I am convinced that the next thing they’re going to force-feed us will be mandatory home insurance. Right now, one can (if one’s home is paid off) still “opt out” – decide that the risk of a total loss is fairly small and that it’s a reasonable (because slight) risk to skip the guaranteed annual loss of $2k or more for “coverage” one will probably never need and, instead, put that aside for a rainy day that will probably never come and which, in that event, will leave the money available for other things.

I did exactly that.

Bastards tried to increase our premium by several hundred dollars – for no reason that had to do with me; I’d never filed a claim, have excellent credit, etc. The guy on the other end of the phone admitted as much; said that “everyone” was paying more because of a general rate hike.

It was delicious to tell the guy: Ok, cancel the got-damned policy. Then I hung up the phone.

I’ve already saved several thousand dollars. Money that would otherwise have been out the window.

Consider it: Let’s say your policy is “affordable” – a mere $1,500 annually (this is pretty cheap, if averages are any indication).

How much is that over 30 years (the duration of the typical home loan)?

$45,000. Out the window.

And that’s merely the principal and does not factor in the lost investment/opportunity cost.

Now, they’ve added mandatory health insurance – forcing people to spend money on that, too.

How much do you suppose the average American is forced to spend each year on all this insurance? Figure $1,500 for the car (just the one car; double this figure if you own two or more) plus another $1,500 for the house plus another $6,000 or so on the low end (see here, if you disbelieve) for the health insurance.

That’s close to $10k a year, right off the top. The average American family income is just over $51,000 (see here). This means that the average American family is paying – forced to pay – 20 percent of its income to the insurance mafia. People (rightly) hate the IRS, but the federal tax bite for the average American family is less than the flesh-rending mouthful extracted by the insurance mafia. And at least we get roads and so on for our tax dollars. What do we get from the insurance mafia?

Usually, nothing.

You pay them 30 years for a car policy, never file a claim – and what have you got to show for it? Same for your home insurance – and don’t get me started on the health insurance – the object of which is to not pay for your medical care. Almost all of us would be much better off paying fee for service as and when necessary – and saving the money (of which we’d have a lot more, absent insurance-at-gunpoint) for the possibility of a major event at some point down the road.

Much as I despise government, I harbor a deeper hatred for the insurance mafia. Anyone associated with this “business” as it exists today should look in the mirror and ask themselves whether they like what they see.

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