Health insurance and car insurance: Obama's false analogy

There was a lot for people to like in President Obama's health care reform speech to the joint session of Congress last evening, despite the fact that Obama's proposals have not yet been reduced to writing or introduced as a detailed single piece of legislation which could be scored by OMB and CBO to see whether it is really deficit neutral as Obama promised it will be. Why did he have to spoil the moment by arguing for adoption of his proposals based on a false analogy between health insurance and car insurance?

Obama's present proposal, contrary to promises he made earlier in the presidential campaign and in the Congressional health care debate, will include mandates on both individuals and employers forcing them either to provide health insurance coverage or pay steep fines for not doing it. In order to justify this new federal tax on the unwilling, to help pay for the insurance company mandate to eliminate preexisting condition exclusions from health insurance policies, the president compared health insurance to car insurance:

"That's why, under my plan, individuals will be required to carry basic health insurance -- just as most states require you to carry auto insurance. Likewise, businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers."

A fleeting moment's thought points to the obvious falsehood in President Obama's analogy. In our cities, millions of people live their whole lives without owning cars or even having driver's licenses. They ride the bus or subway to work, walk to the store, bike to church, take taxis when they need to. Consequently, they are not required either to have or to pay for car insurance. Driving is a privilege, not a right, and it is that fact which makes it legal for states to impose the condition of having minimum required insurance coverage in order to exercise the privilege.

Unlike driving, life is a right, not a privilege. America's Declaration of Independence sets it out plainly: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness - ... " How can President Obama and Congress propose to condition a citizen's unalienable right to life on the purchase of a government mandated health insurance policy?

Well, there is no easy answer to that question, and I predict that if a mandate for individual coverage is part of final legislation, then there will be constitutional challenges to the legislation, and the President's precious program will be tied up in the courts for years to come. Does anyone believe the cost of paying government attorneys to defend the constitutionality of health care reform legislation including a mandate for individual coverage will be included in OMB's and CBO's scoring of the legislation?


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Want to Save Even More Money on Your Car Insurance?

Believe it or not, there are even more ways to save money on car insurance. As you have heard already, when you look around, you can find ways to save money on just about everything. It is also important to know that you probably have not heard them all, either.

As you know, rates on many things are often reduced if you belong to a particular membership, or club. Philip Reed at Edmunds.com, says that this is also true about automobile insurance, too. Although there is a membership cost, it usually will enable you to lower your insurance costs enough to offset the price of the membership. One such membership that cones with this type of benefit is AAA. Another group may even be your alumni association or another professional group you belong to.

Membership in this type of club may also give you other discounts, too, such as reduced rates in hotels and restaurants. Belonging to such a group could save you as much as 15% for a hotel - according to Philip Reed. This sounds like an excellent and possibly fun way to get discount car insurance and save money.


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Consumers Could Pay More for Car Insurance with New "Cash for Clunkers" Program, According to InsuranceFusion.com

Auto buyers participating in the new 'Cash for Clunkers' program should be aware of the financial impact to their auto insurance premiums" says Tom Costa, spokesperson for InsuranceFusion.com, an online auto insurance marketplace. He explains, "The new legislation recently signed into law by President Obama and referred to as the 'Cash for Clunkers' bill and now official known as CARS (Car Allowance Rebate System) will affect auto insurance costs. It's important to know how to make sure you're getting the best deal on car insurance in these difficult economic times." The CARS program lets consumers with older, gas-guzzling vehicles earn up to $4500 in rebate dollars. The catch is that consumers do not get the trade-in value of the vehicle, only the rebate, and only if their new car gets better mileage than the old one. Costa continues, "Consumers that opt to participate in this program and get a new more fuel-efficient vehicle may think that their auto insurance premiums are sure to go up. It's important that consumers do their homework because there are insurance discounts of up to 10% if a consumer buys a hybrid vehicle and many insurers also offer 'Safe Car' discounts of 5% or more". Visit the Insurance Institute for Highway Safety to compare car insurance quotes from many different companies and find out which vehicle and which company has the lowest insurance rates." He concludes, "Even if a consumer chooses to stick with their current vehicle, they can still save money. Review your policy to see if you have driven less than in previous years, if so contact your insurance company. You may be eligible for a lower premium based on the number miles driven annually. Also know that insurance costs vary dramatically from company to company and from year to year. Since insurance rates are cyclical, it's smart to shop every year to make sure you're still getting the best price on car insurance."


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Is there a ‘gap’ in your insurance?

There is something special about owning a brand new car. It's shiny, it has that new car smell and you have the pleasure of knowing no one has driven your baby but you.

However, buying a new car is no cheap feat, and the sad fact is the second you drive your new pride and joy off the showroom forecourt it will start to lose value.

This means that, should your car be written off in an accident or stolen, you could be left thousands of pounds out of pocket. The majority of car insurance companies will only pay out the market value of your car on the day that it was lost - so if you've taken out a loan to pay for it, you could be left with outstanding repayments on a motor you're still mourning!

And right now, when the cost of borrowing is high and people's budgets are already stretched, the last thing anyone wants to contemplate is paying off an expensive loan for a car they no longer have.

Enter gap insurance…

Guaranteed Asset Protection, better known in the motor industry as 'gap insurance', is designed to cover the difference - or 'gap' - between your car insurance payout and the amount of money you originally borrowed to buy your car.

So in the event your vehicle is destroyed before you've paid back your loan, the gap insurance policy will ensure you don't end up out of pocket.

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