This is a picture a friend sent me a while back that I really find amusing

This is a picture a friend sent me a while back that I really find amusing. I don't know where these women are but I do like the white fireballs and lightning that appear to be summoning themselves behind the women in preparation to strike.

I once read about something called ball lightning, which is an extra-ordinarily uncommon weather phenomena where fireballs bounce down from the sky and then explode. The theory is that they are supercharged gas plasma that holds together in a ball. It emits light because of some kind of molecular motion of the gases inside the ball.

Apparently ball lightning is extremely dangerous because it jumps around and then explodes. So as a word of warning, if you ever see ball lightning do not touch it under any circumstances.

I would advise instead that you try to hit it with a broom or a mop to make it go away. That should probably be fine.

But anyway, hilarious images suggesting the doom of old ladies is fun, but now its time to get down to the real business.

What's going on with car insurance? You may have heard some things talking about car insurance recently, you may be wondering what all the commotion is about.

In the last year there have been several hikes in car insurance premiums which for some people were a lot and for others were utterly ridiculous. In the province of Ontario this was a really big deal because people were getting their car insurance rates raised by thousands of dollars and all of a sudden couldn't afford insurance at all.

A lot of people think it has something to do with Sept 11, which it apparently doesn't. The Insurance Bureau of Canada (IBC) stated that Sept 11 has had no impact on premiums since it didn't actually affect Canadian Insurance companies.

Another possible explanation is that the number of car accidents has skyrocketed in the last few years and that has raised their claims costs. The IBC however admits that hasn't happened and that accident rates haven't changed drastically in any direction.

The reason the IBC has given for the humungous premium hikes is that they are paying out a lot of money in accident damages. The claims they have to really pay out for are things like personal injury claims, where someone gets a settlement of $30,000 for a dislocated finger.

The IBC states that because of the courts awarding higher claims they have to adjust premiums to cover bigger and bigger settlements. This seems logical and if it is true it also makes them kind of innocent. They are just responding to a change in the way the courts are acting.

But the courts don't determine settlements, those occur when both parties avoid going to court. A settlement is what you get when you mutually agree not to go to court and they offer you money as compensation. So the companies are actually the ones setting the rates for the payouts. If they offer you $30,000 to not go to court then the legal system is basically uninvolved and therefore not to blame.

Either way, this all rests on the premise that there has been a jump in claims payouts in or out of court. Has such a jump occurred, and if so how did this weird change happen so suddenly? If payouts were getting larger wouldn't you assume the change would be gradual and not sudden. A huge change in total payouts would of course be the result of small changes aggregating in a gross change for all companies across the board. That sort of thing can't happen rapidly since it would require judges and lawyers conspiring to screw insurance companies. Even if they did it would still be slow since most judges and lawyers are too busy polishing their solid gold shoes with silk chamois to follow through on such a scheme.

And why would they anyway? What reason do the courts have to spontaneously raise payouts?

The rising payout explanation seems to me to be a weak and inconsistent argument for the sudden heave up in premiums.

If we rule that out then this brings us back to the first question, why did the rates go up?

I think it is partly related to the Bank Act of 1993. As of 1993 Canadian Banks were allowed to own insurance companies and sell insurance. Insurance instantly became the business of Banks. I'm not saying insurance was provided by small family owned companies before, but it became bank business soon after. Like every other company on the stock market insurance companies have to compete to attract investors, which means that they have to offer high returns. Getting high returns is easy when the stock market is up because they invest the pool of funds from all the premiums in the stock market and make more money. Sounds like a good idea, except for the fact that the stock market is a fucking circus.

Which leads me back to the question of why rates are going up now? What big events happened in the last few years?

You may recall the stock market crashing. I am slightly suspicious that insurance providers lost a lot of money on that little fiasco. Since both insurance companies and banks are totally out of touch with reality I think they decided to gouge the customers to recuperate all their loses thanks to their own wicked investment judgment.

As it happens it isn't just ordinary drivers getting gouged. Shipping companies which use trucks and basically anyone who uses a vehicle for commercial purposes are getting screwed worse than the rest of us. Also any businesses that rely on raw materials have to now factor the insane increase in shipping costs into producing their products. They will of course raise their prices to stay afloat and some will go out of business. I don't like that.

In Canada it is illegal to drive without insurance. There are of course a variety of illegal options which we will get to see in action pretty soon. Since it is enforced by law that you must have insurance I think it stands to reason that the government should have some sort of regulatory presence in how that insurance is seen out.

In some provinces auto insurance is non private and is controlled by the government. In Saskatchewan its run by a company called S.G.I. and in B.C. its run by I.C.B.C. The public insurer sets a standard and pretty low premium. It is argued that they also pay out claims very low and have high deductibles, which might be true, but a sacrifice worth making. Non private insurance seems to be a good idea to me.

The idea of a non profit insurance provider makes sense if you naturally suspect that the for-profit insurance providers raise premiums when they lose money. I think that idea is strengthened by Canadian insurance providers hemorrhaging money thanks to their unwise investments in the biggest, wackiest market bubble since the 1920's and are now shifting the bill to the customer. A move that I think is totally fucking bananas.

I don't feel much sympathy for banks or insurance companies, mainly because they seem to be a little greedy. So I support non private insurance 100%. And additionally I advise that everyone should own a car and we abolish public transportation completely as an unsound and pointless travel option.