A reader wrote in response to an article I did recently on the tyranny of mandatory insurance laws. He had been hit while on his motorcycle – and crippled for life – by an oblivious driver who ran a light. He told me he believes that not only should insurance be mandatory but that all drivers should be required by law to have at least $250k in liability insurance – or about twice the current maximums required in many states.
There is a saying: ”Hard cases make bad law.”
It means an emotional desire, in the wake of a horrible incident, to “do something” about it. This often takes the form of pushing for a new law to more severely punish those responsible for causing harm/damage – and also (so it’s argued) to deter future such events from occurring at all by making it clear there will be serious consequences, etc.
But mandatory insurance laws don’t keep people from driving without insurance anymore than DWI laws (or revoked licenses) keep drunks from driving. Like gun control laws, they impose restrictions and cost on people who are (mostly) not the problem.
Why should responsible drivers who do pay attention to their driving, who are skilled and attentive and who never get into at-fault accidents (millions of such people exist) be compelled to pay big bucks for insurance coverage that is massively expensive precisely because it is compulsory, and because it forces them into the same risk pool with the irresponsible few such as the person who hit the guy in my example?
Granted, there is always some risk an accident or injury may occur – no matter how good the driver – anytime a person gets behind the wheel. But most “accidents” really aren’t. They are the result of driver error, especially failing to pay attention, following too closely or driving too fast for conditions – all of which can be avoided - and are avoided by millions of careful drivers who go a lifetime without ever causing an accident.
True, they may hit a deer or slide off the road in a snowstorm – genuine accidents. Things over which they have no real control. But such incidents are rare – and the point is, shouldn’t the individual have the right to decide for himself what an acceptable level of risk is – and insure himself (or not) accordingly?
Is it reasonable to require that everyone insure against any conceivable risk, and to an extent that assumes the absolute “worst case” scenario?
Most of us have to strike a balance between our means and what we spend on various things. Many people would probably prefer to throw say an extra $50 each month at their mortgage balance (or the family food budget) rather than literally throw it away on an over-priced, compulsory insurance policy they will probably never need.
If, that is, they were allowed to do so.
The amount of money we are forced to spend on insurance – car insurance, health insurance, life insurance, home insurance, etc. - is enormous – and historically unprecedented.
It’s no wonder people are broke and in debt up to their eyeballs.
My argument is not with insurance per se but rather with it being compulsory as this is what has been driving the cost of premiums to ridiculous levels – even for good drivers with no history of at-fault accidents.
Personal anecdote: Even though I haven’t had an accident in more than 20 years and have a “clean” driving record I still pay out more than $500 annually to insure my two trucks (both older models, one a 1998, the other a 2002) plus another $300 or so for my three motorcycles – which don’t get used for 3-4 months during the winter and two of which see less than 1,000 miles annually of road time regardless. Compared to what some people are paying, it’s not much – but over ten years’ time, $800 annually is $10,000 thrown to the winds; money that I could have – and would much prefer to have – put to other uses.
If I could do so legally, I’d opt not to carry insurance for at least two of my motorcycles, which I rarely ride – and for one of my trucks, which mostly just sits in the garage. I judge the risk that I will have an at-fault accident with any of these vehicles to be very low, given that none of them sees more than 2,000 miles of road time each year and given that I am demonstrably a “good driver,” based on my accident-free driving record.
But I’m forced to pay anyhow – just like everyone else.
With mandatory insurance, there is no incentive for the insurance industry (which has largely become a cartel) to price policies fairly or competitively because we’re all forced to buy its product. Insurers can insoltently jack up our premiums over things like “speeding” tickets (often the result of deliberately under-posted speed limits) or even our credit rating that arguably bears no correlation to our driving skills or the likelihood we will cause an accident – and we have no recourse. Sure, you can switch policies, but as anyone who has tried this knows, they all use the same formula – and if you have a ticket or two on your “record” (even if you’ve never filed a claim or had one filed against you) the you’re screwed, blued and tatoo’d. As Bob Dole used to say, you know it, I know it, the American people know it.
How many of us have been hit with a “surcharge” on top of our already high annual premium (which can easily be $1,000 or more per year for the average person with a late model car) merely because we had the misfortune to run afoul of a radar gun in a speed trap?
And there is only one way to cut the legs out from under it:
Let good drivers to say, “no thanks” to overpriced insurance coverage.
Insurance companies would be forced to offer more competitively priced policies to good drivers. Policies based on actual risk as determined by the driver’s record of at-fault accidents. Not trumped-up “speeding” tickets.
And the bad drivers? Let them pay according to their risk profile – just like smokers have to pay higher insurance costs.
What if an uninsured driver causes damage or injury? Make ‘em pay or otherwise bear the consequences. If they have assets, seize them. If they work, garnish their wages. If they don’t work - make them. Nothing wrong with making deadbeats clean up trash by the side of the road or dig ditches… whatever.
Until the debt is paid off, no matter how long that takes.
That’s right and proper.
But forcing others to pay for the irresponsible actions of others isn’t.
Throw it in the Woods?
It is fine to not insure yourself when you are driving but that is not the main reason for manditory insurance. The insurance is there for mistakes that you make or accidents that you cause and you destroy my vehicle or disable me or my family possibly for life. It is fine that you do not like insurance but what is going to happen to the thousands or hundreds of thousands of dollars in costs that you cause others? Yes there are a few people that get by with driving without insurance but with manditory insurance it significantly reduces my costs for uninsured motorists cost coverage! In most states there are ways to bypass the need for insurance by demonstrating in some way that you can pay for any damages you cause.
Your statement about a cartel if flat our wrong. The insurance industy has many companies fighting for your policy and do it by trying to give you the lowest rate possible. That is why there are those advertisements out there about saving you money compared to other companies!
You say that you can have the deadbeats clean up along the road or take their assets. That is fine if they have hundreds of thousands of dollars in assets but if they do not then who is supposed to pay for the damages they cause? You are wrong about maditory insurance. It takes very little anymore to cause hundreds of thousands of dollars in damages but you must be living back in the 50s when things were cheap.
The people that would not have insurance if it is optional are the people that do not have anything. That is why there is maditory insurance. If you can not cover your damages that you may create, even if you are an excellent driving, then you should not be on the road.
Mandatory requirements are obeyed only by people with
something to lose, who have respect for “the law,” etc. But of course,
people with little to lose, or no respect for the law, will ignore
mandatory insurance requirements and drive without it. When they cause
an accident, there are no consequences. They aren’t forced to pay, they
don’t get their wages (if any) garnished. Maybe their license will be
taken away – but that will keep them off the roads as effectively as
gun control keeps guns out of the hands of felons.
Meanwhile, responsible people get to pay more because there’s no threat (to the insurance companies) of being able to say, “No thanks – your charges are excessive and unwarranted. I think I will cancel my policy.”
Eric you are so involved with yourself and your political beliefs that you do not even know the facts throughout the states. In many states you can not renew your registration if you do not have insurance. Hopefully that is true in your state. Yes you can not get rid of every person that does not have insurance or the ability to pay but if you get 95% or more of them to then we are all better off.
Also go and take your gun control philosophy somewhere else because that hss nothing to do with driving without insurance.
I also do not believe in your philosophy that says you can not get everyone to do something right so you let them all do bad things. Why is it that when someone is stopped for speeding that everyone else around seems to slow down. Once you let people do bad things they will continue to do bad things and even worse things.
You might do a reality check. There are (as an example) countless illegal aliens who aren’t even supposed to be in the country (let alone in possession of a valid U.S. driver’s license or insurance) who drive – and cause accidents…. and the system can’t or wont do a thing about it. Same goes for the po’ white trash or ghetto black who drives his not-inspected, uninsured old piece of crap and piles into you after running a light.
Mandatory car insurance is a relatively recent thing, incidentally. Prior to the 1990s, it was legal in several states to drive without insurance. Mayhem did not ensue.
My problem is not with insurance, per se. It is with mandatory insurance. I oppose it in principle (just as I oppose Obama’s heaf-cayuh “reform”) but there are practical reasons, too – including that by making it mandatory, the insurance cartels have us by the balls. Even if you have a clean driving record and have never been involved in an at-fault accident, they can still charge you an exorbitant premium and you’ve got little choice but to pay up.
If you could decline the coverage, the insurance cartels would be pressured to offer fair, competitive policies.
That would be to everyone’s benefit because it would make insurance more affordable, which would encourage more people to buy it.
Which would mean most people would carry insurance – law or not.
Wouldn’t that be a good thing?
I’m no expert, but I do know competition drives down prices.
Sure am going to miss ole Clover.
Eric, you guys sure had good thing going! ha
Only 800 for two trucks and the motorcycle!? Man that’s cheap as hell.. Here in British Columbia, Canada, our provincial insurance monopoly (run by the provincial government as a crown “corporation”) runs a tight racket, and annually cores my rectum for 1600 bucks; all of this for just ONE piece of shit old truck that has the minimal coverage I could get (no damage coverage), and this for a record of driving that has no accidents and only one speeding ticket.
Yeah – I’ve heard about that – and I think it’s coming here, too.
The whole thing’s a greasy con. Enforced by the tag-team mafia of Big Business and Big Government.
All to keep us safe, of course!
you forgot the children!
Speaking of the big business in bed with government racket, the thing about that which irritates me the most is the fact that too many people point to it and call it capitalism, leaving me to explain as patiently as possible that it has as much in common with genuine free markets as a cancer tumor does with muscle growth.