Wallet Hub: Cheap Car Insurance in 2019

Quoted in WalletHub.com analysis of car insurance.

Why do car insurance rates (and even providers) vary so much from state to state?

Mostly due to legal definitions of tort and liability as well as minimum required coverage.

Is it riskier to drive in some cities and states than others? Are the drivers themselves riskier?

Specific age groups and race groups have shown increased rates for one or several types of crashes. Some of these groups are over-represented in some states. Also very busy intersections, substandard freeway merges and high volume rural and mountainous roads have a higher incidence of crashes. The number of these "black spots" also varies by city and state. Weather creates variability in crashes too, i.e., there are more crashes in foggy and icy conditions; there are many states that do not have these conditions.

Is there anything that state and local governments do to promote cheap car insurance rates for their constituents?

Enact properly designed and enforced laws on speed, red light running, helmet usage, intoxication, etc. These vary widely from state to state and sometimes within a state.

Super-long Commutes in Hawaii?

Recently I received this question from a The Pew Charitable Trusts investigating journalist: "I noticed that Hawaii had a big increase – an almost 40% in increase in commutes of 90 minutes or more between 2010 and 2015 (American Community Survey) – I saw you quoted in a business journal on a similar issue, how driving is on the upswing in Hawaii, and wondered if you could comment on why this would be a bigger issue now in Hawaii, and growing so fast."

I replied as follows:

Tourists and tourism jobs generate a lot of travel.  In Hawaii tourism roughly accounts for one third of the local economy. Travel was down mostly due to the recession... in 2008-2010 tourism and all related sectors of the economy were hit hard; see linked report for some numbers:  A major recovery was observed in 2015-2016 and this came with a strong growth in travel.

Another large contributor was gas price. In 2010 gas prices jumped from approximately $3.50 to $4.50 (in Hawaii). Sharp increases in trip cost resulted in sharp changes in trip making (curtailed trips and more car pooling). The price in 2015 was "normal" at $3.25 or under. See link.

Indeed, hotel pay is modest and these workers tend to live far from Waikiki and downtown Honolulu (in more affordable, remote towns) which come with 75+ minute commutes.

The 90 minute cutoff creates a "definitional" problem by itself.  During recession times, traffic is lighter and fewer trips take 90+ minutes, even from far out locales. When the economy is booming and traffic is heavy, even suburbs that are closer to Waikiki will experience occasional 90+ minute trips, thus in good times the 90+ count goes up much more.

New Commuting Data: Same Old Trends

The informative summary below was developed by Robert Poole at the Reason Foundation.
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Last month brought the release of the 2015 American Community Survey data from the U.S. Census. The data on commuting from ACS are generally accepted as the most-representative national-average figures. And what is most notable about these latest numbers is how little change they reveal, compared with their counterparts over the past decade.

Commuting expert Steve Polzin of the Center for Urban Transportation Research at the University of South Florida posted an excellent summary, with 10-year graphs, on Planetizen.

Most of the commuting mode-share data show very little change over the decade from 2005 through 2015. Drive-alone remains the choice of slightly over three-fourths of all commuters (76.6%), with virtually no change over this time period. Interestingly, nearly as many millennials (age 20-24) drive alone (72.5%), despite all you read about them being new urbanists who walk, bike, or use transit.

The two most significant trends over the decade are the continuing decline in carpooling and the ongoing increase in telecommuting. Despite all the guff about the sharing economy and future "mobility as a service," there is no sign of this so far in terms of increased willingness to share rides with others; carpooling is down to 9.0%, from nearly 11% a decade ago (and from just under 20% in 1980). Telecommuting has increased from about 3.4% in 2005 to 4.6% in 2015 and seems to be catching up with transit's mode share of 5.2%. Biking (0.6%) and walking (2.8%) are largely flat over the decade.

Polzin notes that average commuting time (heavily influenced by the drive-alone super-majority) is now 26.4 minutes, up from 25.1 minutes a decade ago. But he also provides some useful perspective by comparing the 2005 U.S. figure with average 2005 commute times in other OECD member countries—e.g., 33 minutes in Spain, 36 minutes in France, 40 minutes in Belgium, 45 minutes in Germany, and 46 minutes in the U.K. These countries all have a higher transit mode share than the United States, and since transit trips generally take longer than driving trips, that may help to explain the difference between the U.S. numbers and Europe's.

2014 American Community Survey: Honolulu Mode Shares

Transportation modes are the means by which people move around in a city, particularly for their commute to work. The mode shares for "Urban Honolulu, HI Urbanized Area (2010)" are listed in Table B08301 of the 2014 American Community Survey. They are as follows:

The same data in pie chart form:

There are several important observations:

• Personal transportation (cars, bikes and motorcycles) is used for 80% of the trips.
• Bicycling in Honolulu is only 1.1% of the trips.
• Work at home is a welcome 3% of the trips, similar to the US average.
• Walk is over 5%, which is better than the US average.
• Public transit (bus and taxi) is almost 10%, which is much better than the US average.

Almost 90% of the trips shown require roads and another 8.4% of the trips shown do not require substantial infrastructure (just sidewalks and the Internet.)

So how does the state, city and OMPO address the people's preferred use of transportation?  They provide an obscenely expensive elevated rail alternative that saps transportation funds for much needed road and sidewalk repair and expansion.

U.S. Cities, Some Growing, Some Shrinking

The large population change from the snow-belt to the sun-belt of the U.S. continues unabated.

In the five years between 2010 and 2014, the four snow-belt cities of New York, Chicago, Philadelphia and Washington, DC and the mismanaged city of Los Angeles lost a combined 270,000 loss in population, or net out-migration as demographers call it.

The state of Texas alone was a major attractor with four of each large cities, Dallas-Fort Worth, Houston, San Antonio and Austin gaining 80,000 population in the same years.

More analysis in Wendel Cox's  Still Moving to Texas: The 2014 Metropolitan Population Estimates.

Surprising Downward Trends

What do golf, convertible cars, crime, American journalists and infant mortality have in common?
The answer is in my recent article in the Honolulu Civil Beat.

The article describes some downtrends. Our world is obsessed with up and more, whereas down and less are equally important but rarely discussed...unless there is a major recession or a downed aircraft!

2010-2013 U.S. Metropolitan Area Changes

This domestic migration three year snapshot indicates that Americans are moving out of Democrat, cold and mismanaged cities with expensive transit systems to Republican, warm and business-friendly cities with small or medium transit systems.  Smart!

See more in New Geography: Special Report: 2013 Metropolitan Area Population Estimates

Plan Bay Area: Urban Planning as a Form of 21st Century Illogical Dictatorship. Part 1

Part 1 by Wendell Cox explains why the well intentioned Plan Bay Area makes the wrong assumptions and picks the wrong solutions. As a result it barely makes the pollution targets they are after!  Sample estimates by Cox are shown the picture below.  Telling people what to do is not the way to do it.

Why Aren’t Younger Americans Driving Anymore?

The nation's congestion problem has lessened largely due to youth unemployment and high fuel prices. Read this interesting Washington Post blog for more details.

One has to be careful to not overreact to the sharp change in the trend of miles driven because the graph is population adjusted. It shows the rate of driving per person. The rate is dropping but population is growing, so the next effect is likely a 1% to 5% reduction in traffic, depending on the area.

Do Europeans Use Transit a Lot? Perhaps, but Only in the Central City.

Recently I stumbled on an analysis of commutes in the second largest city in Germany, Hamburg.  It's an old and interesting city that I had the chance to visit it in the late 1980s when there were two Germanys, West with capital Bonn, and East with capital (half of) Berlin.

Germany is a country with substantial use of rail both in and between cities.  Hamburg is the second largest city in Germany. The county where Hamburg is situated has a population of about 1.8 million and the six surrounding suburban counties have a population of 1.5 million.

Unlike US cities which are characterized by very high (employment) density in the downtown and medium-to-low (population) density in areas surrounding the downtown, Hamburg and most old European cities have high (population and employment) densities over many acres. This makes the development of multiple rail lines meaningful and productive.  Their rail lines are compact in length and are supplemented by bus or tram. As a result, transit use is moderate.

Their suburbs have a low use of transit. Let's look at the shares in the image below.

In the city of Hamburg, 33% use car modes, 19% use transit and 38% walk or bike.  What's the largest difference between Europe and US. Is it transit use? No! It's Walk and Bike.

Walking and biking to/from work is more than 35% in Europe and less than 5% in the US.

In the suburbs of Hamburg transit drops to 7%. TheBus in Honolulu has a 6% share. Again the main difference is that even in the suburbs Europeans do a lot by walking and biking: 28% compared to less than 2% in US suburbs.

Some dense American cities like Honolulu look a lot like old European city suburbs. Like in Europe, the share of transit in the suburbs is rarely if ever over 10%. Investing on rail transit in suburban Europe or US cities is a poor decision both financially and for transportation productivity.

Sierra Club Used Wrong Population Projections in Support of Honolulu’s Rail

If one wants to keep things simple, then it could be said that the base of Sierra Club's support for rail is simply a case of garbage in, garbage out.  In other words, garbage data were used to come to a garbage conclusion.  However, I believe that data were sufficiently twisted to support the underlying car-hating philosophy of "environmentalists."

In this case, the bias is clear because supporting rail (to kill auto) causes huge damage to prime agricultural land. The Sierra Club simply cannot have it both ways.

Explanations are provided in my article in the Hawaii Reporter.

Hawaii Over The Past 20 Years: Minimal Change, Minimal Growth. What Should Hawaii Plan For?

Annual U.S. Bureau of the Census data strongly suggest that Hawaii, and Oahu in particular, are stable communities with very mild growth and change particularly after the turn of the millennium.

The data suggests that mega-projects such as rail and "big wind", and mega-developments such as Ho'opili and Koa Ridge are ill conceived and unnecessary.

This slideshow provides both data evidence and brief discussion.

Politicians have engaged in biased or data-free decision making for decades. The mounting debts are sufficient proof that ignoring the trends and serially engaging in unproductive activities simply digs a deeper hole. Both Hawaii and the US are approaching the danger of the hole walls caving in and burying them, much like the PIIGS* and other countries.

What should Hawaii do in the next two decades?  The last slide provides the answer. In three sentences:

• Decline followed by stability will be the trend.
• Send “visions” and mega-projects to the cemetery.
• Maintain, Replace, Modernize should be Priority 1.

(*) Portugal, Ireland, Italy, Greece, Spain

The 60% Lie: Less than 6% of Oahu's people live within walking distance of the proposed rail!

Dennis Callan, planner and rail aficionado says this:

"The city claims that more than 60% of Oahu residents, some 600,000 people, live along the rail route, but in reality less than 6% of Oahu's population resides within walking distance of the proposed train stations.

"Such misleading inflated numbers from our city government are part of their ongoing propaganda campaign, which has distorted most aspects of the rail system in their attempt to sell it to the public with rosy projections. They would like you to think the rail is very accessible and useful, but it is not."

Callan's video Who Will Ride Honolulu's Train has the analysis and numbers that proves the city's exaggeration and illustrates the continuous dishonesty of HART members who support the wrong facts in the media.

Jobs. Jobs. Jobs.

Seth Godin, marketing guru, ex-VP at Yahoo! and author of 13 books, believes that “the current recession is a forever recession” because the industrial age has ended and this means that the days when people were able to get above average pay for average work are over. Self-improvement, continuous learning and investment on oneself are key to employment otherwise “never mind the race to the top, you'll be racing to the bottom.”

While this is useful advice for those currently employed, the pressing problem is unemployment and under-employment. The Bureau of Labor Statistics (BLS) calculates the official unemployment rate by looking at those who are employed or who have actively looked for work within the last four weeks. As a result, the official rate excludes workers who have decided to drop out of the labor market altogether. The official rate also ignores those who settle for part-time work since they are unable to find a full-time job.

Recognizing this shortcoming, the BLS also reports the U-6 rate, which includes those who have sought a job sometime in the last 12 months and those who have accepted part-time jobs but would prefer full time. The U-6 rate is a better representation of the ability of the economy to provide jobs. Let's take a look at the numbers as summarized in NCPA's Tracking the Unreported Unemployed:

• The 1948-2007 unemployment average is 5.6%.
• The unemployment rate moved from 5% in January 2008 to a high of 10.1% in October 2009, and a current rate of 8.6%.
• The U-6 rate moved from 8.8% in December 2007 to 17.4% in October 2009 and 15.6% in November 2011.
• U-6 rate is almost twice as high as the official unemployment rate. It explains the increasing pressure for economic improvement and jobs.
  
• By the end of 2011, 43% of all unemployed have been unemployed for more than 27 weeks. Besides being jobless, their skills deteriorate, which worsens their employment prospects.
  

Without doubt the unemployment challenge is serious. What causes a high unemployment rate? There are several causes. Here is a big one: The disconnect between supply and demand for jobs. There is a glut of low skill laborer supply. There is demand for high skill, specialized jobs. Unemployed carpenters. Engineers wanted.

The problem of turning 500 unemployed carpenters to 500 engineers is impossible to legislate. In general, turning thousands of low skilled workers to thousands of high skilled workers is very difficult to solve. We need to understand and address the root causes of the problem some of which have deep cultural roots such as over-emphasis in sports instead of scholarly achievement, under-performing public education systems, and stereotypes based on race and gender. Another part of the problem is government regulations and union rules. I’ll cover most of these in a series of articles.

Instead of addressing the root causes of unemployment, politicians in the recent past responded to the cries for “jobs, jobs, jobs!” in two wrong ways: (1) They approved “make work” projects for low skill and construction labor, and (2) they “incentivized” new high tech industries.

“Make work” projects is the use of taxpayer funds to develop unnecessary or low effectiveness infrastructure projects, typically show-off projects or transit projects. These provide some jobs for low skill labor but in reality the unemployment problem is postponed for a few years while the tax hole becomes bigger. “Make work” policies are unsustainable. They develop dangerous dependencies for thousands of low skill laborers instead of providing opportunities for advancement and job diversification.

The current genre of “high tech incentives” is the green industry. Incentives are typically taxpayer handouts to targeted groups, e.g., relating to solar panels and electric cars. People and industry respond to incentives. While accounting in Hawaii is poor, it is much better in the UK where the conclusion in Worth The Candle? The Economic Impact of Renewable Energy Policy the UK was that “for every job created in the UK in renewable energy, 3.7 jobs are lost.” In Hawaii, misguided policies will likely result in more solar guys than nurses per 1,000 people; and a deeper tax hole. Such outcomes are unsustainable and undesirable.

Politically expedient solutions to unemployment are both costly and ineffective. We can’t talk about solutions until we are able to wrap our brain around the issue of “jobs.” What are some of the many facets of employment and unemployment?

Unemployment varies widely by level of education. The Chronicle of Higher Education reports this: The overall unemployment rate for recent Bachelors degree recipients is 8.9%, compared with 22.9% for recent high-school graduates and 31.5% for recent high-school dropouts. It also varies by fields: Unemployment is higher among recent graduates with nontechnical fields of study, such as the arts (11.1%) and humanities and liberal arts (9.4%), but it is only 5.4% for graduates who studied health or education.

College pays off: The Los Angeles Times reports that the average take-home pay of college graduates is $38,950, compared with $21,500 for high school graduates. A college graduate's earnings would exceed a high school graduate's by more than $1 million over 40 years.

Gender makes a difference. The Economist published detailed analysis which I’ll summarize elsewhere but the bottom line of "The Cashier and The Carpenter" is that men and women do different work for different pay. For example, by working shorter paid hours, women are managing to achieve a reasonable balance in their lives. The Economist cites results that show that work-life balance dissatisfaction is about 18% for women and 27% for men in Europe.

The New York Times reports that in the two and a half years since the recovery officially began, men age 16 to 24 have gained 178,000 jobs, and women have lost 255,000 positions. “Apparently discouraged by scant openings, 412,000 young women have dropped out of the labor force entirely in the last two and a half years, meaning they are not looking for work. Young women in their late teens and early 20’s view today’s economic lull as an opportunity to upgrade their skills, their male counterparts are more likely to take whatever job they can find.” As a result, the next generation of women may have a significant advantage over their male counterparts in the near future.

The NYT article continues to say that many of the occupations expected to have the most growth, like nurses, home health aides and dental hygienists, have traditionally been filled by women. Jobs in male-dominated industries such as manufacturing and construction have been in decline. Manual labor careers can also be hard to maintain indefinitely because youthful strength eventually fades. The pension coverage of construction and manufacturing workers is also lagging which presents a challenge for males as they age.

Knowledge and understanding of the true causes of a problem are the right foundation for crafting solutions. My series of summary articles on “jobs” throws light onto the employment and unemployment challenges. Stay tuned!



1. Jobs. Jobs. Jobs. This article.

2. Jobs: Fundamental Trends – 2000 to 2050. How Did We Get Here and What’s in Store?

3. Jobs Hawaii: Outlook for Jobs in Education, Government, Military and Tourism

4. Jobs: The Young and Unskilled

5. Jobs: What Women Want

6. Top Jobs: 10 Hot Careers for 2012

7. The Right Job: Sustainable, Desirable Employment

Did Commuting Patterns Change in the First Decade of the Millenium? Only a Little.

A New Geography article summarized the commuting data and results revealed by the 2010 Census. The winner was Telecommuting and the loser was Carpooling. Despite higher prices and huge media hype over shifts to public transit, the big surprise was the continued growth over the last decade in driving alone to work.

In summary,there has been no major change in commuting, even with the huge gas price increases. As the shift to personal mobility continues, the largest increases will like take place in telecommuting, which is the most energy-efficient form of transportation. Gains in transit have been minimal and should be expected to stay at around 5% on the mainland and around 7% in Honolulu.

Clearly these numbers indicate that a city like Honolulu with 950,000 people investing on a $6,000,000,000 heavy rail system is nothing short of ridiculous.

Tourism Industry: Fact, Action, and Possible Destruction

Fact: Tourism is important to all of us on Oahu but the grim reality is that since the 1996-1998 high, tourism has been at a fairly constant slide, as DBEDT monthly statistics since 1990 show.


The graph above of international arrivals shows that 9/11 and SARS and Iraq war had strong negative impacts. Add to this the weak national economy since 2008 and domestic arrivals also have dropped sharply. See below.


Today's visitors observe a congested, aging and increasingly unappealing Oahu with potholed roads, tired looking parks, and hordes of homeless.

Action is needed now. My vision is to restore the postcard image of Oahu as a great tourist destination by focusing on fixing the infrastructure and maintaining our parks, beaches and tourist attractions. That is real value to the tourist industry and all of us.

The more attractive we are as a visitor destination, the more the hotels can get higher rates and higher quality jobs in the hospitality industry can be had.

Destruction. My opponents in the mayor race will significantly harm Oahu's tourist industry in three ways:

(1) Both advocate rail which is a giant project that will involve 10 years of messy construction to deliver a system that very few will use, according to the city's forecasts. The construction mess and the very ugly all-elevated rail line will be tourism killers for Oahu.

(2) The rail is gigantically expensive so other needs such as dilapidated parks and beaches, homelessness and potholed roads will be under-funded. Thus they will get worse and Oahu's tourist appeal will worsen.

(3) The taxes needed to construct and maintain rail and the sewers add up to $10 billion which means heavy extra taxes. How heavy? The typical sewer bill 15 years from now will be about $2,500 per year plus another $1,000 for rail for each taxpayer.

People in the hospitality industry will find it increasingly difficult to afford to live in Hawaii. Hotels may increase wages and will have to pay higher city taxes. So hotels will have to charge much more for their rooms to offset the costs, thus making a visitation to Hawaii more costly and less competitive.

My competitors' model for "rail jobs" is a long term disaster.

Oahu Statistics: City, State and Federal Employees

The graph below shows City, State and Federal employment counts on Oahu from 1990 to 2010.

City jobs have been above 10,000 employees and over time they grew by almost 30% while at the same time population grew by less than 10%.

Federal jobs were at an all time high from January 1990 to September 1993 and retrenched to below 30,000 due to the combined effects of Hurricane Iniki, the Gulf War and the burst of the economic bubble in Asia. Despite the recent prolonged recession, federal job count has increased to over 30,000 again since 2007.

The number of state jobs fluctuates greatly from month to month. September almost always has the lowest number of employees followed by a sudden spike of a few thousand in October. This pattern clearly depicts the seasonal effect of 9-month public school teachers (state DOE.)

Soon after the 2008 recession the total State employment on Oahu surpassed 60,000 people for the first time but the count receded in 2010. In the 19 years from 1990 to 2009 state employee count on Oahu increased by 10,000 or +20% whereas population grew by less than 10%.

In other words, between 1990 and 2009, the state government on Oahu added an entire Honolulu city government onto itself!

Two more observations. Bloated government comes at a high cost to the taxpayer. According to a recent article in The San Francisco Chronicle, Hawaii tops the list in total state taxes among all states in the union. That's a very pricey distinction.

Oahu state government added a lot more people as soon as Information Technology (IT, that is computer automation of bureaucracies) took hold. It appears that the powers in charge (government, legislature and unions) kept thousands in the dark ages and hired 5,000 new government workers for the new ages.