In the past, whenever I heard the word “scam” I automatically thought it referred to some illegal activity. Random House dictionary defines “scam” as a confidence game or other fraudulent scheme, especially for making a quick profit and “fraudulent” as proceeding from fraud, as in actions, enterprises, methods or gains. Nowhere does the word “illegal” appear in these dictionary definitions.
It is becoming increasingly apparent that many corporate business models are borderline, if not outright, scams. Read your phone bill. In the breakdown of charges how many unfamiliar and unexplained terms will you see? Obfuscate and conquer.
I receive a twice monthly paycheck which I deposit into my checking account. That check is drawn against the same bank where I have my account but only half is credited immediately, the other half takes two to three days to clear even though I have on deposit more than enough to cover the amount. The uncleared portion becomes part of the “float” and serves as a profit generator for the bank. Multiply this by several thousands per week and suddenly you have a fairly large unearned income.
There are thousands of examples that could be listed but my main focus is what I consider to be one of the greatest of the legal scams, automobile liability insurance.
Those who follow my blog may have read my first post on the subject of auto insurance,
https://rixlibris.com/2016/03/02/lessons-taught-by-a-drunken-driver/
Automobile liability insurance is something that has been on mind for awhile, long before the incident that triggered the drunken driver post. A couple of years ago I broached the subject with my Allstate insurance agent. My questions stemmed from several observations, chief among them that it is not uncommon for there to be more vehicles in a household than there are licensed drivers.
An example might be that dad has a daily driver as does mom. He has a little old beater that he tinkers with or perhaps is an off-roader and has a jeep for that purpose. They also have a pick-up truck that is used to make occasional trips to the home improvement store or maybe to the recycling center. In order for the vehicles to be street legal they each must be registered, in many states inspected, and carry at least the state minimum required liability insurance.
With four vehicles and only two drivers it is quite obvious that two of vehicles will not be in use at any given time. The question I had assumed that other states have the same requirement as does Texas, that to get a driver’s license you must also show proof of liability insurance or make a sworn statement that you do not own a vehicle.
The question, why in this modern digital age cannot liability insurance be a function of having a driver’s license. In that way if you are licensed to drive you will be covered in any vehicle you happen to be driving. Comprehensive insurance, fire, theft and collision, necessarily has to be vehicle specific but liability coverage does not.
When asked, my agent responded by saying that no insurance company would assume such a large amount of “unfunded liability.” He was not able to provide an answer when I asked just how a parked car is creating a liability, unfunded or otherwise. His final word, “it’ll never happen.”
Nor is it likely to happen because the liability insurance payments generated all those parked cars is a cash cow so large that the insurance industry will spend billions lobbying against any change that would benefit the consumer at a cost to their bottom line profits. Not unless we the people wake up to how we are being ripped off to the tune of billions of dollars per year because law forces us to buy the product and the providers package it in a manner that increases their profit without any additional benefit to the consumer.
Following business practices that increase the cost to the consumer without providing additional goods or services falls well within the definition of a scam.
Below is a link to a Huffington Post article. While it focuses on the subject of claims, it spotlights the overall governing ethos of the insurance industry. Remember this, one of the main requirements of a successful pickpocket is that he has “good hands.”
Perhaps it’s time to add the insurance industry to Howard Beale’s (Peter Finch, Network) list of grievances and for us all to get “mad as hell.”
This is my view and I welcome yours. If you agree that something must be done to rein in all those who are nickle and dime-ing us into the poor house you can began by sharing this post. I will be forwarding it to my state representative.
rixlibris 
Does your state have mandatory insurance? I live in MD and we have uninsured motorists fund for claims where the motorists doesn’t have insurance. But, it is illegal to drive a vehicle with no insurance and you get get your vehicle registered without proof of insurance.
Yes, we have mandatory liability insurance. You must have insurance for both the auto inspection and the registration. Insurance info is in the Department of Transportation (TXDOT) computer system. An officer can run your plates and tell if you have current insurance.
Have been thinking about all of that myself.
Common sense. Too bad common sense is not commonly used as a guide in business dealings. Most corporations claim to be equitable in their approach to customer relations when the truth is that they see such relationships as a zero sum game. Treating people fairly lowers the profit margin, angers the stockholders and cuts into executive perks and bonuses.
Sometimes I think that the world is all greed.
They call it “good business practices.” the goal is to maximize profit and somewhere in recent history it was determined that the easiest place to look for those extra dollars is among those who are already purchasing your goods or services. As long as you can get a few dollars more without adding anything tangible to the mix you are generating 100% profit.