There’s an increasing disconnect between what the TV ads are saying about the rates for insuring your vehicle and the quotes floating into your inbox. The marketers would have you believe there’s no problem in finding really cheap insurance (but only with their company, of course). Yet the insurance industry itself funds the Insurance Information Institute as a research body. It regularly publishes studies. Mostly, they are uncontroversial. So it came as a surprise when it revealed a steady rise of some 10% in the premium rates between 2008 and 2010. The latest straws in the wind are also suggesting a further rise of some 4% this year. When you consider the rate of inflation has been zero – there has been a recession, after all, and many prices actually fell – it’s a disgrace the insurance industry has been pushing up its prices.

Yet, when a talking head does appear above the parapet to talk for the industry, the message is always the same. The rates are going up because the repair and medical costs have been rising faster than inflation. Indeed, when you look at all the evidence on medical costs, you can believe what these insurance apologists are saying. Then you have to ask yourself about the value of the US dollar. It’s been falling steadily over the last three years. So the cost of all those imported spare parts from foreign manufacturers has also been rising. If these same insurance companies were not announcing increased profits to their stockholders, you would almost feel sorry for them.

So here’s something closer to the real problem for them to consider the next time. In some states, up to 20% of the vehicles on the road are uninsured. The reason for this is, in the main, that the premium rates are unaffordable to an increasing percentage of the population. In case you hadn’t noticed, we have the highest rate of poverty seen in the last twenty and more years. So all those drivers wealthy enough to pay these rates are now forced to pay more to provide against the risk of being hit by someone uninsured or underinsured. Like that’s the way insurance is supposed to work when holding a valid policy is mandatory. If we combined the databases of the insurers and the state vehicle licensing authorities, we could quickly identify people without insurance. But no politician is going to push for that because it would mean taking on the insurance industry to reduce their rates or paying a subsidy to poor drivers.

It’s a shame when big business gets too big and politicians feel intimidated. Or perhaps they feel bought given the amount these insurers pay into lobbying the politicians. Many would never have enough money to run campaigns were it not for the contributions of rich businessmen. So until we get big business out of government and have a more representative system, we have to accept the auto insurance quotes will keep on rising every year without any prospect of limits. The only way this will stop is when a sufficient number of electors in each state coordinate their efforts only to vote for politicians who not only say they will control the auto insurance rates, but then take effective action to do so.