Gordon Brown murders lonely pensioner’s only companion

Just a bit of clairvoyance about the headlines we’ll be seeing in a few years time if this nonsense ever gets into law.

Alan Travis’ report on the government’s plans to tackle the problem of dogs used as weapons by targeting the people who do not engage in this practice contains the following paragraph:

Much of the legal framework stems from the 1991 Dangerous Dogs Act, which used to be held up as an example of the poor quality of legislation passed by MPs in haste but has actually proved a resilient and useful law over the past 19 years.

Well Alan, shouldn’t this be attributed to someone and have quote marks around it, since it’s basically an opinion? The law has certainly lasted since 1991: it’s hard to conceive of the current government rescinding any law that can be viewed as a crackdown on something. So I guess that counts as resilience. But given that the current proposals are in response to an increase in attacks from dangerous dogs, then the law’s usefulness is another matter.

The government is proposing to make third party insurance compulsory for dogs, thereby creating a captive market which will motivate insurers to raise premiums. We already have insurance, so I suppose this will be our reward for acting responsibly.

Dog breeds banned under current legislation will by definition not be insurable. It’s unlikely that people who use their dogs as offensive weapons will take out insurance on them. That leaves people who don’t think it’s necessary or who just can’t afford it to the tender mercies of whatever enforcement mechanism emerges. Hence the headline.

Comments

[Tode]

Why should a captive market lead to raised premiums? It is not a monopoly. Economies of scale should lead to lower costs, and competition should ensure that some of that reduction gets passed on the the customer.

[jamie]

"It is not a monopoly"

No, but I can't think of a better motivation for defacto cartelization: you're basically talking about a single product so you wouldn't have to actively collude to make sure that prices were kept the same. And I'm sceptical that outsiders would rush in to undercut everybody else, at least over the short to medium term. It wopuld be interesting to see who's actually lobbying for this measure.

[Madam Miaow]

Pet health insurance is already sky high and now they want to add more? My beloved cat eventually succumbed to a kidney ailment that cost over £4K in vet fees over a couple of years and which we could never afford without insurance.The individual itemised bills struck me as over-priced but I assume vets can keep pushing up their prices because they know the insurer will foot the bill. And the the insurer can keep raising the premium ... perfect synergy.

I just don't see how this will help curb sociopaths with aggressive dogs.

[Alex]

It's not pet health insurance though is it? It's third party cover. Not obvious that those are correlated risks.

(Also, I'm not aware of such a cartel in the closest equivalent, motor insurance, which is also mandated and dominated by third party risks.)

[dsquared]

Yes, I would have thought that the instinctive Pavlovian reaction of the UK insurance industry would be to dash for market share in the belief that they would be able to put up prices "later". The thing is that third-party pet injuries are so rare that the premium is basically free money as far as I can see, so I strongly suspect the compulsory business will be written at less than the cost of the sales commission.

[dsquared]

(of course, claims behaviour will change markedly due to moral hazard, and lots of currently unreported nips will be reported when there's a claim to be made, but these are issues for future profit warnings. I presume someone has done the obvious thing and asked the posties' union for views? When I was a member of BIFU, we had strong opinions on handgun control).

[ajay]

The thing is that third-party pet injuries are so rare that the premium is basically free money as far as I can see,

I'm trying to think of a pun about "tail risk" here.

[Richard J]

so I strongly suspect the compulsory business will be written at less than the cost of the sales commission.

We got the seller to purchase 'contaminated land insurance' when we bought our current flat (owing to a nearby light industrial unit), and considering the potential exposure, and the value of the purchase, the price was effectively nominal.

[Alex]

claims behaviour will change markedly due to moral hazard

Minsky! Give me that bone! Minsky! Your mother was a beagle! Minsky...WRRRGH! Compo!

[Seeds]

...the instinctive Pavlovian reaction of the UK insurance industry...

This is a joke about dogs, right?