Westerners visiting South East Asia are usually amazed by the number of motorbike and bicycle riders on the streets of the big cities. In Hanoi, the capital of Vietnam, for example, it is almost impossible to cross the street because of the two-wheeled traffic. In Ho Chi Minh City, formerly Saigon, there are 3 million riders out of a total population of 7 million.
But in Israel we are constantly trying to ram a spoke into motorcycle wheels. Just two months ago, the Finance Ministry attacked with new compulsory insurance rates for motorcycles that will take effect in December. Motorcycle owners were shocked to learn how much their insurance was rising.
Today, insurance for two-wheeled vehicles is paid for out of a "pool" - in practice an insurance company owned by all the insurance firms. In other words, it is a cartel whose rates are set by the supervisor of insurance.
The supervisor, Yadin Antebi, claims motorcycles are dangerous. He says such vehicles are involved in five times the number of serious accidents as cars. Also, in 2005 there was an NIS 140 million deficit in the compulsory insurance pool for motorcycles.
Therefore, explains Antebi, he has to raise insurance rates; since car owners should not have to subsidize motorcycle owners.
This sounds reasonable and logical - until, of course, you look at the details.
True, motorcycles are involved in more traffic accidents than cars - in relative terms of course. But most of the time the accidents are not their fault. Such an accident ends up with serious damage to the motorcycle and bodily harm to its rider, but only a small amount of damage to the car. And the driver comes out of the accident with no injury at all. This is the cause of the distortion in the figures.
The statistics do not tell the story of who is responsible for the accident. All they show is the cost of the damage, and because the amount of damage to the motorcycle - and its rider - is much higher, their insurance claims are higher, too. That is the cause of the deficit in the motorcycle insurance pool.
There are other reasons for supporting two-wheeled vehicles as well.
Israel has a serious problem of overcrowding on its roads, as well as air pollution caused by cars. The main polluters in Tel Aviv are vehicles with four wheels. They are worse polluters than even the Reading power plant. This is exactly why motorbikes have what economists call "positive externalities."
Antebi needs to take into account that two-wheelers use much less infrastructure, take up fewer parking places, pollute the air much less, and reduce overcrowding and traffic on the roads - and therefore improve the environment, and the lives of all the other drivers.
The new committee on "green taxation," headed by the deputy director general of the Israel Tax Authority, Boaz Sofer, is about to recommend to the cabinet to set the level of taxes on vehicles according to the amount of damage they cause to the environment. Improvements to the environment, and air pollution in particular, not only affect the quality of life for all of us, but also the amount of health care expenses the public pays for. Sofer will recommend that vehicles that pollute more should cost more to buy, and should also be more expensive to maintain.
If you take all this into account, not only do we have to reverse the hike in motorcycle insurance: instead we should cut the rate, and encourage the use of an efficient, fast and cheap method of transportation. Just like in Vietnam.
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