European Union

What Every Sensible Driver Needs: Speeding Insurance

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Following on from the latest French craze of trading speeding penalties, the Danes have invented a whole new business designed to take the pressure off drivers who like to go fast (or are just careless): speeding insurance.

Drivers pay 2.5 Danish crowns (46 cents) per day. In return they get annual coverage of up to $1855 for four speeding and four parking tickets. And again, it's a case of drivers uniting against the state:

The idea, [insurance company] Fartklubben founder Poul Winther told Danish daily Politiken, is not to give Danes license to put the pedal to the metal, but rather to protect motorists from over-zealous traffic cops.

"We're a solidarity club where each member is jointly liable for one another," he said. "We believe that photo speed traps and parking companies have become pure money machines."

The government could respond by lowering incentives to use such insurance, i.e. reducing penalties for speeding or getting control of its traffic cops. More likely, they'll go for Option 2: make speeding insurance illegal.

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  1. Seems like an adverse selection/moral hazard right there to me–there’s a reason we try not to insure against fun things happening

  2. the insurance company’s called “Fartklubben”?

    heh

  3. Way to stick it to the man !! Not.

  4. Jack,

    Agreed. Maybe if it was a group of friends grouping together it might stand a chance of working, but without any reason to let up on the gas, this is going to fail. Every ticket you get will worsen the group’s loss experience, and you as an individual participant will only pay pennies more.

    They’re currently paying 912 crowns for 10k of coverage… I have a feeling that they’ll pay a bit more next year..

  5. We’re a solidarity club where each member is jointly liable for one another
    COMMUNISM!!

  6. the insurance company’s called “Fartklubben”?

    heh

    The first rule of Fartklubben is: don’t laugh at the name.

  7. I’m sure they’ve thought of the adverse sekection problem. All the Fartklubben has to do is check the person’s driving record, like all auto insurance companies do. If you really have racked up more than your share of tickets in the last little while, the Fartklubben should deny coverage or grant only very limited coverage.

    IMHO though, by the fourth ticket in one year, you need to start asking–maybe the problem’s not that you’re not good enough at talking, bribing or (if you’re female) seducing your way out of speeding tickets. Maybe it’s the fact you drive like a fucking maniac.

    (I say this having gotten two tickets in the last twelve months from the Surete du Quebec. I’m ashamed to say I deserved them both. ^_^;)

  8. The first rule of Fartklubben is: don’t laugh at the name.

    No, the first rule of Fartklubben is: do not talk about Fartklubben.

    Really. People will laugh at you.

  9. More likely, they’ll go for Option 2: make speeding insurance illegal.

    Maybe, but I doubt it. I doubt they’ll lower penalties either. In fact this is a great reason to raise fines. Speeding tickets are mostly about raising revenue.
    “We believe that photo speed traps and parking companies have become pure money machines.”
    Exactly, so an insurance that encourages drivers to get more violations, that will be paid, is the wrong incentive all around.

  10. I have to agree with Warren…my first thought was “If I’m the State/The Police, I’ll just raise fines and get more aggressive.” I mean, the money’s guaranteed!

    Overall, Fartklubben is a stupid idea.

  11. I see this as likely causing policemen to feel even less remorse for giving speeding tickets. It’s like how doctors treat health insurance. Charge the maximum of what you think you can charge because the person is insured anyway.
    Police will probably say crap to drivers who are freaking out about getting a speeding ticket (like those who freak out because someone backed into their parked car, but the police are faulting you instead of the little old lady who backed into you…)”it’s ok, your insurance will take care of it.”

  12. I say this having gotten two tickets in the last twelve months from the Surete du Quebec. I’m ashamed to say I deserved them both.

    Do people ever get speeding tickets they don’t deserve?

  13. Damn, Ayn_Randian beat me to it

  14. Do people ever get speeding tickets they don’t deserve?

    Right, people complain about speeding tickets but in reality we probably each average one for every 10,000 times we speed.

  15. Anyway, I agree that insurance that helps and encourages people to break the law should not be legal.

  16. Wouldn’t it be interesting if this actually led to more responsible driving – perhaps due to a sense of voluntary, mutual obligation to other members of the insurance pool to keep the insurance costs low and protect everyone against overzealousness on the part of law enforcement?

    I mean, there is speeding and then there is speeding. I speed every day, but I think I use pretty good judgment about doing it only when it is safe to do so. For the most part, the people I see actually getting pulled are usually driving very recklessly on top of speeding. Of the two speeding tickets I have received in over 20 years of driving, I think I deserved one (driving too fast on a surface street in town) but not the other (driving over the speed limit on a deserted interstate in a rural area around 7 am on a Sunday morning).

    I realize I might be nuts for even thinking it, but that’s alright.

  17. Fartklubben is closing because the authorities feel that the payments from the club to the members can be taxed as income.

    They are thinking of reopening offshore, leaving it to each member’s conscience if they would pay the tax.

    (there are also other organizations in Dk that do pay for certain services (e.g., unions), but those payments are not taxable as income, yet. This may change that.)

  18. Nearly anything that is remotely positive is “taxable income” in Denmark. I lived there for nearly 20 years, and the Tax Authorities will go to ridiculous lengths to pursue even minor loopholes. For example, subsidized lunches provided by employers are regulated as to how good the food can be before it is “too good” and will result in a taxable benefit. I picture tax inspectors sampling the open-face sandwiches..

    I’m not at all surprised that Fartklubben ran afoul of tax regulations. BTW, “Fart” is of course “Speed” or “Motion” in Danish. An old story relates that when Queen Elizabeth came to visit one time, all the elevator annunciators had to be covered with tape as the buttons were labeled “I Fart” (“In motion”).

  19. I thought it was illegal pretty much everywhere to insure against penalties for intentional criminal acts? You can’t get murder insurance to pay you if you get convicted of murder. Companies can’t buy “SEC insurance” to pay penalties imposed on them by the SEC for violating securities laws. Is this a uniquely Danish exception? Surely it would not fly in the US.

  20. Grant – where’d you live?
    (Frederiksberg – Copenhagen in the 90s)

  21. All they have to do is put points against your licenses like they do in many states here. The insurance my pay your fine, but it can’t prevent the suspension of your licenses due to points.

  22. The biggest problems facing speeders is loss of license and jail time for reckless driving.

    The only time I’ve complained about the money was when I wrote that fat check to my lawyer and he succeeded in getting me thrown into jail.

  23. “””The only time I’ve complained about the money was when I wrote that fat check to my lawyer and he succeeded in getting me thrown into jail.”””

    The lawyer got you thrown in jail??

  24. I’m not at all surprised that Fartklubben ran afoul of tax regulations. BTW, “Fart” is of course “Speed” or “Motion” in Danish.

    Someone please get me a Danish poster for the movie “Speed”!

  25. I agree that insurance that helps and encourages people to break the law should not be legal.

    Ahem. Is compulsory care in the EmergencyRoom not a form of HealthInsurance?

  26. MP
    “Do people ever get speeding tickets they don’t deserve?”

    I’ve received 6 speeding tickets in the last decade and a half – only one of which *was* undeserved.
    Lying SOS Lousiana state police said i was doing 85 in a 65.

  27. And this insurance is really for those who don’t normally speed anyway. Essentially its insurance against being apprehended by a mistake on the officer’s part and so relieves you of the hassle of having to go to court to sort it out.

    Just like collision insurance, if you continue to get caught speeding your coverage will either go up or be revoked.

    This is *insurance* to cover you against an unlikely event, not *assurance* to help pay for something that is guaranteed to happen.

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