Public vs. private auto insurance

In February, I bought my first car in Ontario — a used 2009 Ford Focus. The dealer took care of the plates, and I took care of insurance.

Since auto insurance is private in Ontario, I searched online for the company that would give me the best price. After a phone call, and a fax that showed I owned the car, the transaction was done and the insurance company sent me proof of insurance papers in the mail.

It was simple. It took very little time. I didn't have to sign anyone or talk with anyone face-to-face.

More moral hazard

Since I'm on the topic of moral hazard, here's an interesting study from 2009 about the moral hazard of holding health insurance: it'll make you more unhealthy.

In the aptly-titled working paper Does Health Insurance Make You Fat?, Stanford's Jay Bhattacharya and three co-authors looked at results of an experiment where Americans were randomly given different levels of health insurance (or no health insurance at all). They found that people with health insurance tended to gain weight. Private insurance policies increase the average person's body mass index by 1.3 points, while public insurance increases it by 2.1 points.