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Culture War Roundup for the week of November 20, 2023

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The level of competence that maximizes insurance company profits is not necessarily going to be the same as the level of competence which best* satisfies the tradeoff between public safety and the individuals' interest in being able to drive.

*There can of course be a variety of best tradeoffs, since "best" depends on how one weighs the competing interests. But insurance companies do not directly take either of those factors into account when deciding whether to insure someone.

But it likely does maximize the tradeoff between public safety and the individuals' interest in being able to drive plus their interests in saving other costs. And it probably maximizes the tradeoff you mentioned better than driver's licences do.

And it probably maximizes the tradeoff you mentioned better than driver's licences do.

I don't see how you can know that, nor is it likely to be true, given that the insurance company doesn't particularly care about either one.

The insurance companies want to maximize public safety so as to minimize their payouts. They want to minimize the costs for their policy holders to maximize the demand for their products.

  1. No company wants to minimize the prices they charge their customers. Rather, they want to charge the price that maximizes their profits.
  2. The fact that they want to mazimize sales (not demand, which is different), is part of my point. That desire is likely to lead them to permit relatively unsafe drivers to drive (at high premium prices, of course). Some of those drivers are likely to be people who cannot get licenses under current practices. That does not necessarily mean that current practices are more optimal than the alternative, nor that they are worse. It only means that they are different.

If they can profitably insure dangerous drivers, what is the problem? Society is being compensated for the risk those drivers pose.

No, only partially compensated. If I negligently run over and kill your child, the money is not going to fully compensate you for your loss. Ditto if I render her a brain-damaged quadriplegic.

The insurance companies want to maximize public safety so as to minimize their payouts.

No, they want to minimize payouts. Effect on public safety depends on how well payouts (via laws and court system) are correlated with damage to public safety.

If payouts for accidents caused by someone driving with sleep apnea without XYZ treatment are much higher, then insurance companies will demand the same as discussed here.

If they can avoid payouts while damaging public safety they will happily do this.