Recently in insurance Category

From You're the Boss Blog - NYTimes: How I Saved My Company: Mile Meter. A four minute video piece by and about Mile Meter, a new car insurance company that offers Pay-as-you-drive insurance, which is a good thing, since it turns a fixed cost of driving into a variable cost, which more closely approximates the underlying cost structure (if you aren't driving, it is hard to crash your car), and thus better aligns with true full costs of driving (and likely discourages driving as a result - the extent of this would be an interesting study).

The company's website is here: MileMeter. It seems to be available only in Texas.

From Australia's ABC Road deaths cost world economy $540b

Road deaths cost world economy $540b By Moscow Correspondent Scott Bevan

Posted 1 hour 28 minutes ago

Government ministers and traffic safety campaigners from around the world are meeting in Moscow in a bid to reduce the global annual road toll.

It is estimated 1.3 million people die on the world's roads each year.

So far this year there have been 168,000 traffic accidents in Russia alone, killing 21,300 people and injuring 212,500.

The meeting has been billed as the first global ministerial summit on road safety, prompted by the enormous impact crashes have on lives and economies around the world.

Russian president Dmitry Medvedev says road crashes drain the global economy of $US500 billion ($540 billion) a year.

As well as sharing information, summit participants are expected to sign a declaration calling for a decade of action for road safety.

Australia's Federal Department of Transport delegate Joe Motha says the declaration could help focus efforts and coordinate know-how to tackle the problem.

"It's not an issue that's a knowledge issue, it's more an issue of implementing what's already known," he said.

Campaigners from the Commission for Global Road Safety estimate a decade of action could save five million lives.

Tags: disasters-and-accidents, accidents, road-accidents, safety, russian-federation

One of the interesting aspects of this came up in CE5212 class on Wednesday, which is insurance. Traffic crash damage (including both bodily damage and property damage) costs are borne by the victims, and, in the US, a multitude of insurance companies, but traffic crash prevention are borne by the road agency.

No single individual or insurance company has the incentive to improve road safety. I cannot personally spend money to improve a road which is only one of many I travel on, and an insurance company will not do that if they only get a fraction of the benefits (safety improvements for their customers).

However, it is clear, society would benefit from improvement in road safety. How to align interests. A solution comes from Australia itself (home to this article), wherein the Transport Accident Commission is the statutory insurer of third party liability in Victoria, Australia. That is, Australia has socialized car insurance, and has since at least 1986.

The question is, are Australia's Roads safer? Evidence would seem to suggest yes. A study by the World Health Organization, now in Google Books (World report on road traffic injury prevention By M. M. Peden, World Health Organization) (Figure 2.4)
shows that while the Australia and US traffic fatalities per 100,000 population were quite simlar through the 1980s, since 1986, Australia's rate has declined faster than the US, to the point that Australia's rate is less than 2/3 of the US rate. In other words, if the US progressed as much as Australia, last year's US death toll on the roads would be less than 25,000 instead of 37,261 (US number for 2008), ( source). Commercial vs. state auto insurance may not be the only difference, but it is an important one.

David Levinson

Network Reliability in Practice

Evolving Transportation Networks

Place and Plexus

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