In the world of life insurance there are two different types of policies; whole life (lasts your whole life) and term life (lasts for a fixed number of years).
When you buy term life insurance you pay a small premium and if you die within the confines of the insurance contract a payment is made to the beneficiary. Normal exclusions include suicide, fraud, war, riot and civil commotion. These exclusions are in place to keep people from scamming the insurance companies.
Whole life is seen as more of an investment opportunity than an insurance policy. The premiums are much higher than in a term life policy but the money invested can be made available to the policy owner before death.
Now I'm not an insurance salesman and I'm sure I butchered a thing or two in my above descriptions. I'm not looking to talk about life insurance but to talk about car insurance.
Anyone who owns a car is the USA has to have some form of car insurance on it or a bond, rates and amounts vary by state.
Most people look at car insurance as a necessary evil. If you want to drive you have to have insurance on your car.
Now, what if we took the idea of investment life insurance and applied it to automobile insurance? What if the premiums you paid to your car insurance company were treated as an investment that you could draw against at a later date?
Do you see where I am going with this?
I think such a thing would lead to more responsible drivers and less fraud. If you knew that any claim you filed with the insurance company would result in a lowering of the cash value of your investment wouldn't you be more likely to drive more carefully? what would be the point of attempting insurance fraud if the only one you are cheating is yourself?
Because most people look at the thousands of dollars a year they "lose" by paying for car insurance they don't have any sympathy for the insurance company when they file a claim or hear about others trying to defraud the insurance company. When you turn it around and make the policy holder an investor and let them know that if they don't get into any accidents or file any claims there will be money left over for them to have at a later date you change the whole relationship.
Now, this is just an idea at this stage and I'm sure there are some problems that I have not even thought of. Think about it though. Car insurance where you got money back for being a good driver! Where can I sign up?
Car Crash Anatomy, part 1 by flickr member Dr. Keats used under Creative Commons License