Click here for the new Anchor Rising & Ocean State Current page
July 1, 2011
Do Legislators Really Not Know How It Works?
Justin Katz
So they've gone and passed the budget. Rhode Islanders should not find it encouraging, though, that the architects of public finances apparently think in this way, speaking about the new 7% tax on insurance awards:
Dion says the burden falls on the insurance company, not the consumer: "When you total your car or have your car stolen, you file a claim with your insurance company. Your insurance company would determine the value of your totaled or stolen car and issue you a check for that value plus the sales tax on that amount, which you can then use to purchase a replacement vehicle," he said."So if your totaled or stolen car was worth $10,000, ... under the proposed change, the insurance company would issue you a check for $10,700 to cover the value of the vehicle plus the sales tax and leave the insured whole."
Sounds to me as if the cost of an insurance award just went up for the company, which will just plug that number into its calculation of its premiums. As a rule of thumb — voters and consumers — you always pay.
12:03 PM
| TrackBack (0)
About Community Crier
About Engaged Citizen
Dion is from the Governor's office, so clearly he doesn't either. If businesses will not pass along this cost, why would they pass along any cost to the consumer? Why then doesn't insurance just cost a dollar a month or something? Or how about free? Let the insurance company absorb 100% of the cost!
Posted by: Patrick at July 1, 2011 1:10 PMExactly.
The very same discussion was raised on the Floor during debate..the answer was "no, they can't do that." What world do these people live in?
Posted by: Lee at July 1, 2011 4:02 PMLee, do you remember who said that they cannot pass along their expenses to their customers?
I'd love to ask that person myself.
Posted by: Patrick at July 1, 2011 4:06 PM"Progressive" taxes and regulations never fully achieve the intended effect. The law of unintended consequences has been well-understood in economics dating back to at least the 17th century. On the best of days, the effect roughly approximates that which is intended, with only minimal corruption, inefficiency, waste, and other anti-competitive effects resulting. More typically, society is set back as a whole due to the opportunity costs and anti-competitive inefficiency of the clumsy decrees handed down by those who style themselves as gods.
Posted by: Dan at July 1, 2011 4:54 PMWhat world do these people live in?
Posted by Lee at July 1, 2011 4:02 PM
Posted by: Tommy Cranston at July 1, 2011 7:46 PMProgressiveland.
The dumbest place on Earth.
"under the proposed change, the insurance company would issue you a check for $10,700 to cover the value of the vehicle plus the sales tax and leave the insured whole.""
Gosh, it's so simple! Insurance companies are thrilled to pay out more in claims. And they would NEVER pass those costs on to rate payers.
So
"Why then doesn't insurance just cost a dollar a month or something?"
It's a total mystery. One thing's for sure, it has NOTHING to do with state legistatures which compel insurance companies to expand their coverage or jack the amount of individual claims.
Posted by: Monique at July 2, 2011 8:02 AMPatrick- I don't recall. I'll ask some others who were in attendance.
Posted by: Lee at July 2, 2011 1:19 PMPeter Petrarca was one of the legislators making the case that the costs wouldn't be passed along.
Posted by: Andrew at July 3, 2011 11:11 AMPistol Pete? How can anybody that shoots himself in the pocket have a clue about how insurance companies calculate premiums.
Posted by: Max Diesel at July 3, 2011 8:10 PM