In the good old days, people were trapped in their employment. The lyrics of the classic song, “Sixteen Tons” say it all: “Another day older and deeper in debt… I owe my soul to the company store.” The company paid, but the only place to buy food and the other necessities of life was the company store. With the prices set unaffordably high, people had to go into debt to put food on their tables. In accounting terms, they never ever paid off that debt. It’s a strange reflection on those times – that employers felt their labor would never willingly stay loyal. Today, people are more free to sell their labor and, if the job is not good for some reason, they can move on to try somewhere else. To that extent, employers have to build up a relationship with their employees. Trust and loyalty must be encouraged on both sides. It’s the same with those who sell goods and services. There are vast numbers of potential customers “out there”. How do you convert “potential” into “actual” and then keep those customers loyal? Well, Toyota seemed to have the answer to the question and then, as it slowly forgot about the need to maintain their customers’ good opinions, lost their brand image for safety and reliability. What price loyalty from Toyota customers?

Moving to the insurance industry, we find the same “for profit” attitude that has just driven Toyota into a wall. Insurers should be looking after their customers, ensuring they always have a good experience, particularly when making a claim. Instead, the insurers have this remarkable reputation for trying to weasel out of paying the full value of every claim made. It seems the words, “small print”, were invented just to let them off the hook. Why, then, has the free market not operated to drive them out of business? Ah, the wonders of capitalism do not apply to the insurance industry. We get caught in so many different ways. First off, all but three US states make it mandatory for us to have auto insurance. That forces us to look for the product. Then we run into the insurers’ exemption from the antitrust laws. Sadly, in 1944, the federal government thought it would be a good idea if the insurers did not have to compete with each other and no administration has had the political will to repeal that law. So we get prosecuted if we drive uninsured, but have to pay whatever premiums the insurance companies feel like asking. Life is just not fair. Continue reading →

Unless there are major changes in the world’s climate, those of you living in the southern states can enjoy the same warm to hot weather all year round. The reality for those of us living in the northern hemisphere is there are four seasons so, as we pass out of Fall, let us anticipate the arrival of Winter with a few words of gentle warning. It is a sad fact that, as the first snows fall, the number of traffic accidents caused by the weather shoot up. Poor driving conditions pose challenges that many vehicle owners fail to meet. The winter period of December through February brings the highest number of seasonal claims in any year.

The first day of snow or icy conditions catches everyone unprepared. The perfect driver would always have the vehicle go through a maintenance check to ensure everything is ready for the stresses and strains of winter driving. The first item on the checklist is tuning the engine to maximize the chances of it starting at low temperatures. It then moves through tests of braking efficiency to steering to the tires – there is enough tread to maintain grip on icy roads, is there not? Except, somehow, our priorities never seem to include this precautionary maintenance and we find our vision limited by sleet and snow, or the vehicles failing to stop, or moving in unexpected directions as the ice forms under our wheels. Even the most experienced of drivers can be caught out. Of course, as the winter weather continues, we remember all our survival techniques and the number of accidents falls. But in that first few days, it can be murder on the roads.

Why should you care? Well, if you drive an older vehicle on the minimum liability cover, you simply accumulate more honorable scars in the battle and patch up the rest that cannot be ignored. Those of you with collision and comprehensive cover need to minimize the number of claims you make to avoid the premiums rising sharply. That means a few simple rules. The first is the obvious, “Do not drive unless it is necessary”. Staying at home with your vehicle in the garage whenever possible is the safest action during the first days of snow. Fit snow tires if the weather looks set in for a few days, and new windshield wipers will help you see where you are going. Program the numbers of your repair shop and a towing company into your cell phone so you can call for help. You should also put together an emergency kit so that, if you are caught in an accident at night, you can stay warm and safe until help arrives. Then, it’s just a case of defensive driving. Allow extra braking distances, keep a safe distance behind the vehicle in front of you and drive more slowly. Continue reading →