Maybe the World Isn’t Such a Dangerous Place

The WSJ notices that insurance prices are dropping:

Homeowners’ insurance costs are falling in many parts of the nation. Car-insurance prices are rising at a slower rate than inflation. This year, companies are spending less than they did in 2005 to protect themselves against injuries to their employees, lawsuits aimed at directors and officers and liability claims in general. The cost of some life insurance, too, has fallen in recent years, as has insurance against terrorism.
The trend isn’t universal. In hurricane-prone areas, homeowners still face higher insurance rates. And health-insurance costs continue to soar because of spiraling health-care costs.
But the widespread declines in insurance rates indicate that many risks that directly touch Americans’ lives are on the decline. Car-collision claims have decreased in frequency, thanks in part to safer cars and safer driving. Workplace-injury claims are down, in part because of improved technology. Americans are living longer, meaning life insurers often face lower odds of making big payments on the term policies they write.
Americans “are getting better at controlling risk,” says Richard Zeckhauser, a professor of political economy at Harvard University. “In general, technological advance has made the world a safer place.”

Posted by on November 6th, 2006 at 10:00 am


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