Insurance markets in everything?

by on August 3, 2010 at 12:00 pm in Economics, Law | Permalink

http://www.ticketfree.ca/, or try this site.

Like insurance for the very tickets that jack up your actual insurance, TF’ll cover the cost of nearly any violation you incur while driving (for a reasonable annual fee), so you can finally go too fast without getting all too furious. Current plans consist of the Mini, which exclusively covers speeding offenses; the Classic, which adds everyday scofflaw activities like light running and illegal u-turns; and the Enthusiast, which picks up the tab on parking tickets, plus miscellany like window tinting and noise violations, a necessary prophylactic for anyone playing the whistle tip game. Whoo WHOO! To recoup expenses, members simply enter their ticket info within 10 days of the court date and TF handles the rest, supplying an email confirmation when their payment goes through; if you choose to contest, they'll pay the fine in the event you lose, but should you actually win they'll cut you a check for the original ticket amount anyways (if crime truly doesn't pay, then speed drifting through the median must not be illegal, Dad).

Thrillist says it is real; is it?  For the pointer I thank Joseph Calucci.

Sebastian August 3, 2010 at 12:54 pm

I was wondering how they deal with adverse selection. The crucial part of this is a 500$ cap on each category of fines.
So take the basic plan, which covers just speeding tickets, and costs 14$/month, or 168$ per year.
I.e. three people pay for any maxed out insurance policy.
That might work, presuming that enough people are irrational in the strictly economic sense and buy policy even though they average less than $160 in tickets per year. They might still be rational more broadly speaking, if we assume that for them, getting and paying for a speeding ticket carries a significant emotional disutility. The insurance takes that away.

Economically speaking pretty much any insurance with a cap that’s only three times the annual fee is of course nonsense, but it might still work if people get a huge extra kick out of not-paying tickets. Which I think they might.

jon redden August 3, 2010 at 2:48 pm

And keep in mind, after a couple of these, you may not have a license with which to get said tickets :)

R.J. Lehmann August 3, 2010 at 3:14 pm

I don’t find anyone registered under that name as a licensed insurance underwriter in the NAIC database. They don’t offer anywhere on their site any alternative operating name under which they might be licensed to do business, which is required under all state laws I’m aware of. One of the URLs has a Canadian domain, but I’m pretty sure the Finance Ministry requires similar disclosures.

Dave August 3, 2010 at 4:48 pm

A more useful service might be a subscription to safe/unsafe places to speed/park illegally etc for your GPS. On any given stretch of highway there are very few places that are good for speed traps.

Marbury August 3, 2010 at 6:56 pm

There is reputedly a black market service in India that offers to insure you against the cost of getting caught/fined whilst using the train system without a ticket.

Ryan Miller August 4, 2010 at 9:03 am

Dave: this exists, it’s called Waze.

anon August 4, 2010 at 8:01 pm

Don’t let any US judge find out….

Aglidewell September 5, 2010 at 12:38 pm

I tried both links they took me nowhere

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