Episode 122: Car Insurance is Too Cheap

Doug Gordon: It’s never been more expensive to insure a car in the US. According to data from the Bureau of Labor Statistics, the average annual cost of full coverage is more than $2,500. That’s up from more than $1,700 in 2021. And according to a recent report in the New York Times, the cost of car insurance rose 20 percent in the last year alone—the largest increase since 1976.

Doug: So what’s going on? Well, for starters, cars are really expensive. According to Kelley Blue Book, last year the average price of a new vehicle was more than $48,000. And used cars? Well, they aren’t exactly a bargain either, with an average price of about $27,000. New or used, things that cost more to purchase cost more to insure. The rising price of cars, as well as high interest rates on auto loans, has led drivers who not too long ago might have replaced a damaged car to have it repaired instead. That in turn has increased the price of parts and labor. Then you add in supply chain issues, computer chip shortages, the expense of repairing a lot of vehicles today—even after a minor fender bender—and you’ll see why drivers are submitting higher claims to insurance companies. Those insurance companies then pass their costs on to their customers in the form of higher deductibles and higher premiums. It’s a vicious cycle.

Doug: Oh, and did I mention the cars that get damaged by floods or fires in the latest climate disaster? Yeah, that is a problem that’s only gonna get worse. The high cost of car insurance is a huge issue in a country where for the most part, driving is a ticket to full participation in society. It’s also eating away at the gains made from softening inflation and other positive economic indicators, something that could have a very big political impact. But what if I told you that despite these rising costs, car insurance is still way too cheap? That’s coming up next on The War on Cars.

Sarah Goodyear: Hey, this is Sarah. If you like what we do at The War on Cars, you can help make it happen by becoming a Patreon supporter. Go to TheWaronCars.org, click “Support Us,” and sign up for $3, $5, $10 a month. We’ll send you stickers and you’ll have access to exclusive bonus content and much more. Thanks so much.

Doug: Welcome to The War on Cars. I’m Doug Gordon. So a quick warning: this episode includes a description of a fatal crash among other references to traffic violence. And we know many of our listeners have been affected directly by this issue, so I wanted to let you know before you keep going.

Doug: On November 8, 2010, Michelle DuBarry’s husband Eric was pushing their 22-month-old son Seamus in a stroller through a crosswalk not far from the family’s home in Portland, Oregon. It was about 11:15 in the morning.

Michelle DuBarry: They had just gone to the grocery store that was two blocks away from our house. And they had the walk signal, they stepped into the intersection, and a driver who was turning right through the crosswalk slammed on the accelerator mistaking it for the brake.

Doug: The driver, a 75-year-old man behind the wheel of a white Mitsubishi Diamante, struck Eric, throwing him about 30 feet. A 20-year-old man who was also crossing the street was hit and suffered a broken arm. And Seamus’s stroller was pinned against a utility pole.

Michelle DuBarry: I was at work, and got a call that there had been a crash, there had been an accident. And when I arrived at the hospital, I was taken to my husband’s room, where he sat on the edge of a hospital bed just covered in blood. And my son was not there. They told me he was down the hall, that they were trying to save him, and eventually he was, I guess, stabilized. They took him into surgery. He had two surgeries, spent a night in intensive care, and he died the next day.

Doug: The family’s agonizing ordeal at the hospital lasted about 27 hours, but Michelle and Eric’s concerns about the long-term implications of the crash had surfaced immediately—almost as soon as Michelle received the call at work.

Michelle DuBarry: This is, I think, a uniquely American thing where when something like this happens, you not only have the immediate trauma and this thing that happens to somebody that you love, and you’re worried about them surviving surgery and you’re worried about them—you know, what life will look like on the other side if they survive, and here we have the financial aspect as well.

Doug: Michelle knew she and Eric would need a lot of time to cope with what had happened, but she had been at her job for less than a year. She didn’t even qualify for unpaid time off under the Family and Medical Leave Act. She and Eric did have their own health and auto insurance, and a hospital social worker told her that the driver had insurance. That, at least, gave her one less thing to worry about.

Michelle DuBarry: I kept talking to the social worker. Like, she was kind of bringing me updates, like what the police were saying, and she was telling me—like, we didn’t know if the driver had been drunk or, you know, we didn’t really know what had happened. But I remember needing to know, like, does he have insurance? Because that was gonna at least allow a tiny part of my brain to relax and help me feel like I would at least have time. Because what you need after something like that happens—and I wasn’t injured, but I didn’t know how our life was gonna look like on the other side of this. But I knew I couldn’t go back to work on Monday, so just knowing that the driver had insurance was, like, hugely comforting to me. And I was like, okay, he has insurance. At least that part of this is gonna be fine.

Doug: To be honest, when we decided to do this story, I wasn’t really sure how to cover the details of Seamus’s death. I wasn’t even sure how to ask Michelle to talk about it—although I am immensely grateful that she did. Because what she and Eric experienced is deeply personal, but it’s also sadly common. More than 30,000 people were killed in traffic crashes in 2010, the year Seamus died. That figure has risen to more than 44,000 as of last year. And those statistics are all people, people with families suffering immense grief. A kind of pain that, if it can be treated at all, can only be treated with time. And look, it sounds crass, but in a country like ours, time is money. That’s why Michelle and Eric took at least minor comfort when they found out that the driver who killed Seamus had insurance beyond the Oregon State minimum of $25,000 for bodily injury.

Michelle DuBarry: We left the hospital, and still I was thinking, okay, I can take some time off, we can gather our friends and family and, like, we can at least kind of have a few months buffer to pay our mortgage and pay our bills. But I didn’t—I wasn’t thinking in terms of numbers at all. And eventually we learned that the driver had $100,000 in bodily injury coverage, which is basically, I think, also known as pain and suffering. And so in my mind, that meant we would be getting a check for $100,000 at some point. And so we proceeded through all of the things. We had a memorial service, and we both took time off work. And I just didn’t worry about money for a while. And all we had to do is sort of like, you know, one foot in front of the other, and pretty soon we’ll get that check and we can figure out where to go from there.

Doug: Within a few weeks after Seamus died, Michelle and Eric received a letter from their insurance company.

Michelle DuBarry: They knew that we had been in a crash, and they knew that we probably had a settlement, and so they sent us a letter that was like, “If you get a check, don’t cash it, don’t spend it because we’re coming after it, basically. We’re entitled to it.” They had put a lien on any settlement proceeds that we might collect.

Daniel Knowles: If you are in involved in a crash and somebody else is at fault and their insurance pays out, you’re—in a lot of states, your health insurer or the hospital that’s treated you will essentially be able to claim any settlement that you get, even if that settlement is, you know, on paper for your pain and suffering, rather than explicitly to cover your medical costs. They can essentially claim that from you, so you—you get nothing.

Doug: That’s Daniel Knowles. Daniel’s the Midwest correspondent for The Economist. He’s also the author of Carmageddon, a book about the many harms caused by cars and a world built around driving. And what he’s describing, where insurance companies can claim part or all of a settlement before it goes to crash victims or their survivors, well, that’s perfectly legal. It’s called subrogation. And I’m gonna get a little wonky here. Subrogation or “subro,” as they call it in the industry, is a term for an insurance company’s right to seek compensation for the coverage they’ve provided to their customer from the at-fault party. It basically gives a victim’s insurance company the ability to demand reimbursement from the person responsible for the crash, or that person’s insurer.

Doug: Think of it this way: let’s say you’re walking or biking down the street, maybe you’re in a car, and you’re doing everything right. Suddenly, you’re hit by a driver. Police determine the driver is completely responsible for the crash and for your injuries. And let’s say you have health insurance—most likely through your employer, which covers your initial care from the ambulance ride to the emergency room, to everything from treatment for a broken bone to major surgery.

Doug: Now let’s say the driver who hit you has liability insurance for bodily injury, something most states require. Or maybe later you’re awarded damages in a civil suit, damages that might also be paid by the driver’s insurer. But here’s the thing: since your insurance company paid for your initial medical treatment, it has the right under most policies to be reimbursed for the payments it made to your health care provider—payments that you probably thought were entirely covered by the premiums you or your employer has been paying to your insurance company.

Doug: With subrogation, the moment your insurance company paid your healthcare provider, any claim you had against the driver’s insurance was transferred to your own insurance company. You were essentially written out of the equation. That’s why Michelle and Eric got that letter from their insurance company saying, “Yeah, that check? That’s ours.” Now insurance companies will argue that subrogation allows them to keep premiums down by shifting costs to at-fault parties and their insurers, which I guess sounds reasonable, but what it means in practice is that any payout you get from the insurance company of a driver who hits you—even money you think is for your pain and suffering—can potentially be taken by your own insurance company. Here’s Daniel again.

Daniel Knowles: Yeah, if you get anything, you’re quite lucky. You know, in general, if you’re hit by a car, it’s costing you money irrelevant of whose fault it was. And even—you know, even if it was nothing, not your fault and the other person was insured. You know, it is not a hit and run. The other person did what they’re meant to do. They bought car insurance, they have liability insurance. Even in those circumstances, it is costing you money and you’re not getting compensated.

Doug: Michelle and Eric thought they’d receive $100,000 from the driver’s insurance company to help them weather the difficult period after Seamus’s death. But the letter from their own insurance company meant they’d get nothing.

Michelle DuBarry: The first $15,000 of health care was our auto insurance company. After that, our health insurance company had paid $180,000 for Seamus’s care. They had to be compensated fully, and then if there’s money left over, we get whatever’s left over. But obviously, there is no money left over once you compensate the auto insurance, once you compensate the health insurance.

Doug: Subrogation clauses are written into all kinds of insurance policies, not just auto and health insurance. But it’s not something most people understand before a crisis, and certainly not immediately after losing a child.

Michelle DuBarry: I was like, why do we have insurance? They’re just insuring other insurance companies. They’re not insuring people or victims or families.

Doug: The prospect of not receiving any money from the driver’s insurance company left Michelle and Eric reeling.

Michelle DuBarry: It’s a secondary trauma. I don’t know how else to describe it, because we were in the midst of this incredible trauma, and then to learn that I was gonna have to go back to work pretty much right away, or else maybe, like, lose my house. We couldn’t have afforded to take time off without the settlement. Not only are we going to lose our son, but we’re gonna have this huge financial impact. Maybe bankruptcy. I didn’t know. Like, your mind just doesn’t—like, you can’t think in that—in those terms when you’re grieving. You just need space. And so to have to figure out, like, how are we going to survive economically in addition to just, like, how do we weather this emotionally and and physically? It was—it was devastating.

Doug: Thankfully, Michelle and Eric had an attorney who negotiated with their insurance company and got them to back off.

Michelle DuBarry: Ultimately, we were able to get our settlement—most of it anyway. I think we ended up getting, like, $85,000, but it took—you know, I was back at work by the time we got the check, and so was Eric. And I think the reason he was able to be successful in that was that this was, like, front page news in Portland, what happened to us. There’s this, like, photo of this adorable blond toddler in the newspaper. It’s gotten a lot of community interest. Like, our health insurance company knows that there will be, like, huge public relations blowback if they are seen as taking money away from this family.

Doug: For Michelle, the entire process left her frustrated and annoyed. It also made her highly aware that not everyone sees the same result.

Michelle DuBarry: I was left with this feeling of like, why is it this hard? Why does it take so long? And what about people who aren’t as sympathetic as our family was? What if your crash doesn’t make the front page of The Oregonian? What if you’re any kind of person that our culture doesn’t think of as being, like, a worthy victim? Maybe you can’t afford an attorney. You know, all of these factors are just working against everyone. And at the time, I didn’t even know—I wasn’t, like, aware of kind of the problem or how pervasive it was, like car crash, injury and death.

Doug: Navigating the world of car insurance is complicated, even under the best of circumstances. When someone purchases or leases a car, they’re confronted with an array of choices, some of them optional, some of them required by law. There’s collision insurance, personal injury protection, and uninsured motorist insurance which, as the name implies, protects you if you’re hit by a motorist who isn’t carrying insurance. There’s also comprehensive insurance, which covers you in the event of theft, or if a tree falls and damages your car. That’s separate from what’s called full insurance, which I mentioned at the top of this episode. That’s the recommended industry standard and usually includes all of the above, as well as something really important: liability insurance.

Doug: Nearly every state in the US requires drivers to carry a minimum amount of bodily injury liability per person and per accident—and I’m just using the industry term, and not what I and other traffic safety advocates prefer, which is “crash.” Texas and California, for example, require $30,000 in bodily injury liability per person and 60,000 per accident. The state of Maine requires $50,000 in bodily injury liability per person and $100,000 per accident. But that’s as high as it gets. Many drivers buy supplemental insurance, but it’s not required by law. Here’s Daniel again.

Daniel Knowles: There’s no state that requires more than $100,000 in bodily injury insurance, liability insurance. So that means that there’s no state where you have to have enough insurance to pay out more than that. And even people who have, like, more generous insurance, it very rarely has more than a few hundred thousand dollars per accident. And what that means is that you can very easily go through $100,000 just in a fairly minor kind of accident. If it results in a hospital stay because of, say, a broken leg, we’re talking something that’s not—that’s a serious injury, but perhaps not life altering, that’s still going to easily potentially hit $100,000 medical costs.

Doug: Twelve US states are what are called no-fault insurance states.

Daniel Knowles: Instead of the person who caused the crash being held liable and their insurance paying out for the costs, no-fault insurance essentially says nobody is at fault in a car crash, and you claim on your own insurance.

Doug: Specifics vary, and some no-fault states still require liability insurance, but others don’t require drivers to carry anything to cover the harm they might cause to another person. Take Florida. It only requires $10,000 in personal injury protection and $10,000 in property damage liability. Still, the general idea behind no-fault insurance is that it’s supposed to take car crashes out of the tort system, freeing up valuable court time and reducing legal costs all around. The problem is that many no-fault states assume that crashes occur between two parties, both with auto insurance. These states still recognize that crashes may involve a driver who hits a pedestrian, but the law assumes that even the pedestrians will claim against their own auto insurance policy.

Steve Vaccaro: In New Jersey, there is no-fault reimbursement of your medical expenses, but it is from your own auto insurer.

Doug: That’s Steve Vaccaro. He’s an attorney who represents pedestrian and cyclist crash victims in New York and New Jersey. Steve does a lot of public policy consulting and pro bono work promoting livable streets, cycling and driver accountability. Full disclosure: he’s also a longtime Patreon supporter of this podcast.

Steve Vaccaro: Let’s say you’ve moved to Jersey City or Hoboken and you’re using, you know, bike share there, and you’re living the bike life in the sixth borough of New York, as a lot of people are who are living in New Jersey near New York City, because they have the PATH train and other types of mass transit. They think they don’t need car insurance, but the way the New Jersey system is set up, if you don’t have your own auto insurance, you can’t claim on the no-fault coverage of the driver except in certain circumstances or where the driver bought that type of coverage.

Doug: Many no-fault states have special funds set up to help in such cases, but they’re often funded, among other sources, by surcharges on insurance policies, which is another fee that contributes to high premiums. So that’s your 101 on insurance. The TL;DR version: car insurance coverage and state minimums are not keeping up with the rising cost of traffic crashes, and that’s a price we all pay whether we drive or not. That’s the premise of Daniel Knowles’s recent article for The Economist. It’s titled, “Why Car Insurance in America is Actually Too Cheap.”

Daniel Knowles: Having written a book about why cars are bad, I’m kind of attuned to look constantly for new—new ways to make that case.

Doug: Daniel came up with the idea for the story after finding himself in a situation that should be familiar to anyone who’s ever rented a car for work or for a vacation.

Daniel Knowles: I live in Chicago. I don’t own a car, but I quite often have to rent them these days, you know, because my work takes me around the Midwest. And so every time I’m going to the car rental counter, and obviously they ask what insurance you want. And the thing that’s always kind of shocked me in a way is that there’s all of the sales pressure is: what if you damage this car? But if you damage a car, you know, a car will cost $40,000, something like that, obviously that would suck if you write off a car and then you have to pay that. But nobody ever says, you know, kind of you should buy liability insurance because if you hit and kill somebody, that person won’t be compensated even if you—even if you are bankrupted by it, even if you’re sued and lose everything. And so I always—I got very into essentially working out what insurance do I need to make sure that I always buy the liability insurance when I’m renting a car? And finding out about that made me think: how are people insured? And so I kind of kept digging, and found that everything was worse than I thought it was in a way. [laughs]

Doug: As he mentioned, insurance minimums don’t always cover the full cost of harm, whether that’s damage to a car or the death of a person. Most drivers just get what the law requires and not a penny more. According to a group called the Insurance Research Council, 29 percent of claims in the US involve people who are only insured at the state minimums. In some states, it’s much higher.

Daniel Knowles: Texas was one that really struck me where it’s over 50 percent are people who have that minimum insurance. But these days, even if it’s literally just damage to the car, it often won’t be covered by the state minimums, because the state minimums can be as low as $10 or $15,000 in some states. And there are 4.5 million people injured in car crashes every year in the United States. We can guess from that statistic, about a third of those are almost certainly not getting compensated fully, probably more. Probably a significant proportion are simply not getting compensated for the damage being done.

Doug: Combine low mandatory minimums with a high rate of traffic crashes, and you have a system that offloads those harms onto everyone. Here’s Steve again.

Steve Vaccaro: You have to start with the crash victim and the disruption to their life, if in fact, they still survived the crash. And there’s so many different types of harm that are done, and types of loss that go along with being a crash victim, from medical expenses, lost earnings, the expense of having somebody drive you around or walk your dog or clean your house because you can’t do it anymore. And there is the pain and suffering and disability, disfiguration, scarring, other types of losses you carry around with you for some additional period of time. So the question is: who is going to bear that loss? And to the extent that we allocate that loss to drivers, and we say that drivers are gonna be required to carry insurance against those types of losses, then it’s going to result in higher insurance rates. To the extent that we say it’s not a compensable form of loss, then we are saying the crash victim has to bear those expenses. So in a very real way, crash victims are subsidizing lower insurance rates with their own life and limb.

Doug: Last year, the National Highway Traffic Safety Administration, or NHTSA, released a study showing the impact automobile crashes had on the economy. Using figures from 2019, the study looked at the direct cost of car crashes—everything from the price of emergency response, medical expenses, court fees, congestion, the cost of property damage, you name it. NHTSA found that the total hit to the economy in just that one year was $340 billion.

Daniel Knowles: That’s already 1.5 percent of GDP. That’s $1,000 for every citizen. Yeah, every man, woman and child in America.

Doug: The NHTSA study also looked at broader quality of life costs—things like what happens when a family’s primary breadwinner is killed, or when someone has to adjust to a life-altering injury. Adding those impacts brought the total cost of societal harm from motor vehicle crashes to $1.4 trillion.

Daniel Knowles: Once you account for how much life is lost, for how many people are injured and what that means for their life, how much worse their lives are, you get to a figure that’s, you know, more like five percent of GDP. That’s a really huge sum of money to be essentially just smashed away in car crashes.

Doug: That study looked at just one year—2019. Since then, traffic fatalities have increased by more than 13 percent.

Daniel Knowles: All of those costs that I mentioned, you know, they would have gone up significantly because since the pandemic, the number of crashes has gone up significantly, the cost of car damage has gone up significantly. And obviously, you know, more pedestrians have been run over than ever, and more people are dying than have been in decades. So those costs are only higher now than they were when that study was—the figures the study were based on.

Doug: Because drivers don’t pay the full price of these harms, there isn’t a lot of urgency to solve the problem.

Daniel Knowles: You know, I wrote for The Economist magazine an awful lot of what I’m thinking about is just the incentives, how much American society loads costs on everybody by sort of failing to solve these collective action problems, which means that you individually are trying to solve something that would be far more efficiently or cheaply solved at a state or a government level. And cars produce so many collective action problems. I keep kind of saying, you know, that individually, having a car is very often the rational thinking. In America, it usually is the rational thing for a person individually because the costs are loaded onto other people. You know, the cost of the congestion you’re causing are loaded onto other drivers, the costs of the crashes you cause are loaded onto the people you hit or the government or whatever.

Daniel Knowles: Cars are subsidized in all of these subtle ways, but that hugely add up. We’ve gotten used to how much free parking encourages cars, but insurance is something that I’ve been digging into because it’s another way in which drivers are quietly subsidized to a huge degree that we’re not accounting for. You know, lots of people acting individually in their own best interests can be worse for everybody, and that this is just one of those cases.

Doug: Now like any good urbanist, I asked Daniel how they do things in Europe, you know, with its excellent transit, safe bike lanes, tiny cars and, of course, socialized medicine.

Daniel Knowles: In the European Union, there’s a regulation which requires all car insurance to provide a minimum level of bodily injury liability insurance that’s in the millions of Euros. And most countries actually have higher levels, so in Germany, it’s €7.5 million, in Britain, which is not in the EU anymore but still has the same rules, it’s, in fact, unlimited. And yet car insurance is generally cheaper in Europe because partly there are fewer crashes, partly also the payouts that happen tend to be more limited because our health care costs are a lot lower. But it tends to mean that the payouts that are paid out are for the suffering of the person injured, for their lost income, that sort of thing. Less of it is directly paying for their medical bills because the health care systems are, you know, less extortionate.

Doug: Meanwhile, fatalities and injuries in the US continue to mount at a pace that’s outstripping cities’ abilities to redesign streets. And the auto industry’s reliance on SUVs and trucks to boost its bottom line isn’t gonna stop without strict government regulation, something that’s unlikely to happen anytime soon. So what about at least raising mandatory state liability minimums to make sure more of the cost of crashes are paid by those who cause them? With premiums already busting many Americans budgets, that would be a heavy political lift. Here’s Steve again.

Steve Vaccaro: No one identifies as a crash victim. No one expects that that’s going to happen to them, and so when it’s time to go and vote they say, “Well, I pay car insurance. I know I don’t want to vote for the candidate who’s gonna increase my car insurance.” We’re not gonna elect you unless you can guarantee me lower rates.

Doug: This recently played out in Michigan to mixed results. Since 1973, Michigan has been a no-fault state, but its version of no fault was unique. It required drivers to carry unlimited personal injury protection. Instead of keeping premiums low, as is typically the case with no-fault insurance, Michigan wound up with the highest insurance rates in the nation. To address the problem, in 2019, Governor Gretchen Whitmer signed a comprehensive auto insurance reform law which went into effect in 2020. Among other provisions, the law allows motorists to opt out of unlimited lifetime personal injury protection and choose a cheaper plan. It also reduces a per-vehicle fee owners pay into a fund to cover catastrophic injuries.

Daniel Knowles: And the result of this is that car insurance has got a lot cheaper in Michigan in a way it hasn’t elsewhere, but suddenly victims are finding that their medical costs are not covered, their other costs are not covered to the same extent as they were. People are having to make these complicated decisions about how much coverage do I need? Health insurers and hospitals are very unhappy and pushing back. So the politics does sometimes go both ways, but from the perspective of Gretchen Whitmer, it’s very clear. It’s like, “I got the cost of car insurance down, and that’s popular.” But she did it in a way that didn’t reduce the cost of car crashes, it just loaded onto other people rather than drivers.

Doug: Today, efforts to fix the fix—as people describe it in Michigan—are ongoing. Politics aside, insurance companies themselves have an urgent economic incentive to solve the problem. That’s because the rising cost of cars and repairs, as well as the increased frequency and severity of traffic crashes are hitting insurance companies, too. Last year, insurers paid out $1.08 in claims for every $1 in premiums they took in.

Daniel Knowles: One of the most interesting conversations I had talking to people in the insurance industry was asking, “Well, you know, you guys are losing out from this. Your industry is hugely unprofitable at the moment because there’s been this huge increase in car crashes. Shouldn’t you be working to reduce those risks?” And I think the insurance industry is also beginning to recognize that, so they are talking about, you know, products that monitor people’s driving. So if you are—you know, seem to be using your phone while driving, which is, you know, a big thing that’s increased, then maybe you get punished by the insurance company. So I think insurance companies actually are beginning to recognize that they have a role in basically getting people to drive more safely.

Doug: Unfortunately, even people who work for the insurance industry aren’t immune from something we talk about on the podcast, which is that very American assumption that the only way to solve the problems created by cars is with different cars.

Daniel Knowles: One way in which insurance companies have encouraged people to be safer that’s been quite counterproductive in recent decades, has been to say, “Buy a car that has a higher safety rating.” But a car that’s safer for you to be in it is usually a bigger, heavier car, which means that it’s less safe for everybody outside of that car. And there’s this kind of arms race. If everybody’s buying the bigger, heavier car, nobody’s actually safer.

Doug: So if we’re stuck with this terrible system for the time being, can anything be done so fewer people are treated terribly? That’s a question Michelle asked after the tragic loss of her son, Seamus, when she and her husband were blindsided by the letter from her insurance company.

Michelle DuBarry: I was like, I have to tell the legislators about this because if they knew about it, they certainly would want to change it. I was also just mad. You know, when you—when you go through something like this, I think almost everyone who loses a child will—will take that and turn it into something, try to make some meaning out of it, try and help somebody. So, you know, for me, the thing that I could do with this, like, horrible pain to make meaning out of what had happened is to try and help somebody else who was maybe going through something similar.

Doug: Michelle wanted to see what she could do to simplify the process of claiming pain and suffering settlements, and guarantee that traffic violence victims or their survivors are spared the confusion and frustration she experienced.

Michelle DuBarry: It’s so complicated. Nobody, nobody can have that level of expertise in the day before the crash. It’s—it’s impossible, and insurance companies exploit that every chance they get. You cannot navigate the experience without an attorney. And in my mind, it should be really simple: if somebody has an insurance policy, you should get a check. Like life insurance. It works. You just have to show proof that the person died and you get a check, and no one else is trying to take it away.

Doug: After Seamus died, Michelle learned about a 2010 Colorado law that she believed could be a model for what she wanted to see happen in Oregon. It’s called a made whole or make whole doctrine, and it directly addresses subrogation.

Michelle DuBarry: A made whole doctrine is just a really simple law that says when there is a pain and suffering settlement after a crash, the first in line to collect the settlement is the victim or the victim’s family, and then if there’s money left over, the insurance companies can collect damages. That’s how it should be.

Doug: Other states have their own versions of made whole doctrines. Armed with information and newspaper stories about Colorado’s version, Michelle made an appointment with her state representative, Tina Kotek.

Michelle DuBarry: She’s the governor of Oregon now. And I told her what happened, and I showed her the Colorado law, and she was very surprised that this could be legal in Oregon, what happened to us. And she was very supportive of helping to support legislation for a make whole doctrine in Oregon.

Doug: Like a lot of people who lose a loved one to traffic crashes, Michelle received a very quick education in legislative sausage-making.

Michelle DuBarry: The health insurance companies didn’t like this law, and so they fought it at every stage. The first thing that happened was the bill got really watered down, and so by the time it made it to committee, it only applied to auto insurance companies. The first iteration of the bill, I think it died in committee. And then it just—there were a couple of different iterations, and I think this is how laws get made. You know, over the process in several different legislative sessions, I kind of learned how to effectively advocate for the bill. I learned how to kind of target state legislators that were likely to support it. I learned how to kind of just get out ahead of it and get co-sponsors, and all of the things that I didn’t know the first time around.

Michelle DuBarry: Like, you can’t just, like, point out a problem and expect that everyone’s gonna be like, “Oh my gosh. Thank you for telling me, and we will take care of this.” Like, you have to keep at it. And so yeah, it took eight years because I didn’t know how to do that. And so it was 2019 when we finally got the bill through. And there was no public facing opposition to the bill, which was so interesting because I testified in several committee hearings. There was never a health insurance company that showed up to lobby against it, because I think they knew it was such an outrageous thing to oppose, but they worked back channels to try to kill the legislation. And so it was never a sure thing, even when I had overwhelming support in both the Senate and the House, like, right up until the minute it passed, it was not a sure thing.

Doug: Michelle will be the first to admit that what emerged from the long legislative process isn’t perfect, but it does accomplish a lot of what she set out to do.

Michelle DuBarry: In practice, it only applies if you have private insurance, but if you have private insurance and you get in some kind of crash where there’s a pain and suffering settlement from an auto insurance company, you, the victim, are first in line to collect the settlement. Your health insurance company is no longer entitled to take that money. It goes right to the victim, or in the case of a death it goes to their family. It helps them navigate the very expensive experience of being in a car crash.

Doug: Today in Oregon, there are countless people who can collect pain and suffering settlements without their insurance companies cutting in line. Most of them will never know they had Michelle and Seamus to thank. And as far as Michelle is concerned, that’s okay.

Michelle DuBarry: When I talked to Representative Kotek about the bill, she offered to name it after Seamus, and I just thought that was so funny to name an insurance reform law after a toddler. It is true that I am really, really proud of what we’ve been able to accomplish in Oregon, but the idea that a toddler—my toddler—had to die for this extremely common sense, fair legislation to be initiated and passed is something that, you know, I can’t feel that good about. And so we didn’t name the bill after Seamus because it should have always been this way, you know? So naming it after Seamus just didn’t feel appropriate, I guess.

Doug: Before I recorded this episode, I had been following Michelle on social media, so I knew the basics: that she had lost her son and become a powerful advocate for safer streets. After having the privilege of interviewing her, the more grateful I became for the way in which she turned her pain into purpose. But I also got upset that her efforts were even necessary to begin with. We should all be a little upset because the high cost of car insurance is just one data point among a whole lot that shows that the way we approach transportation and mobility in this country isn’t working. As Steve Vaccaro told me, just stop and think about what auto insurance is and why it’s necessary.

Steve Vaccaro: You know, it’s sort of weird. The only activity we have that’s a subject of mandatory insurance other than, like, professional work, like being a doctor or being a lawyer that requires insurance is driving. And that’s because it’s so dangerous. There is nothing else as dangerous that causes as much harm as driving, and the rising cost of it simply reflects the fact that it is very, very harmful.

Doug: We need to think beyond insurance, beyond no-fault states, premiums and liability. We need to question why we’ve built a society where carrying out even the most basic tasks like getting groceries or going to work, requires not just laying out vast amounts of money to purchase fuel, maintain and ensure a vehicle, but also exposing ourselves to immense amounts of danger. Here’s Daniel.

Daniel Knowles: There’s going to have to be a sort of mentality shift about what causes these costs. I think there needs to be much more thinking about okay, why are there so many car crashes, and why are they so expensive? And recognize that they’re not inevitable, they’re not” accidents.” They’re the result of incentives and road design and the way people drive. And that—and that can change. And the best way to get down the cost of car insurance is to make cars less dangerous.

Doug: That’s it for this episode of The War on Cars. I want to say a very special thanks to Michelle DuBarry for sharing her story and for her advocacy. Thanks as well to Daniel Knowles of The Economist for his excellent reporting, upon which much of this episode is based. Please be sure to read his book, Carmageddon: How Cars Make Life Worse and What to Do About It. You can pick up a copy from our official page at Bookshop.org. I’ll put a link to everything in the show notes.

Doug: Thank you also to Steve Vaccaro for lending his expertise to this episode, and for his partnership on so many fights for safer streets here in New York. Big thanks to all of our Patreon supporters, including our top supporters, Charley Gee of Human Powered Law in Portland, Oregon, Virginia Baker, Mark Hedlund, and the Parking Reform Network. If you like what we do here at The War on Cars, we depend on listener support, so help us out by going to Patreon.com/TheWaronCarspod. Starting at just $3 per month, you will get exclusive access to bonus episodes, merch discounts, free stickers and more. Again, that’s Patreon.com/TheWaronCarspod.

Doug: This episode was written, produced and edited by me. Narration was recorded by Josh Wilcox at the Brooklyn Podcasting Studio. Our theme music is by Nathaniel Goodyear. I’m Doug Gordon, and on behalf of my co-hosts, Aaron Naparstek and Sarah Goodyear, this is The War on Cars.