A Bit More on Charging for Risk
Late last week I was talking about Florida’s SB-424, which will make it illegal for insurance underwriters to charge for the additional risk inherent in owning/using firearms in their state. What I noted in that post was, essentially, that risk doesn’t actually vote R or D. Whatever your personal political viewpoints want the world to look and $4.35 will get you a triple-tall non-fat latte; it won’t make things like gun ownership less (or more) risky.
But there is another reason that it’s best not to separate risk from the cost of risk, even as you pool and subsidize the claims of others: paying for the cost of risk curbs unsafe behaviors.
I was thinking about this truism this morning as I was driving to get my own latte and I watched the driver ahead of me, tired of waiting at the red light that had stopped us both, quickly run it before parking in the same Starbucks parking lot I was heading to half a block away. Since running the light had only bought him about 5 seconds, I ended up being right behind him in line at Starbucks as well.
If this had been any other driver, I’d have been shocked by his running the light. But this young man was someone who was driving as part of his job, and because of this job I wasn’t surprised at all.
In every city I drive, people who have this particular job violate traffic laws all the time, for no other reason than they don’t wish to adhere to them. Red lights, stop signs, passing on the right or on the left over a double yellow line, speeding, illegal turns, you name it. I see them do these things all the time, and so do you — wherever you live.
That profession: the police.
Police never feel obligated to obey traffic laws. And I’m not talking about when they’re chasing a “perp” or catching up to a speeding vehicle to write a ticket — I’m talking about when they’re on their way to Starbucks, or wherever. And the reason they don’t obey these laws is simple: No one is going to ticket them for breaking them.
Their transgressions are no less dangerous than others’; their behavior increases the risk of accidents just as much as everyone else’s. However, they can run overly long red lights or make illegal turns all day long, and so long as they are in a police car they will never face the thing that make the rest of us resist the urge to run a red light when we don’t see anyone coming: that citation that takes a few Benjamins out of our weekly spending money.
We think that we behave the way we do out of lofty principles, but a whole lot of our day-to-day good behavior is based on our desire not to pay the price of flaunting risk. If you take away the responsibility of bearing that cost, you get get people driving like policemen.