Is it just me, or is it pretty messed up that people are legally required to pay for car insurance? I mean, insurance is supposed to be a service that someone pays for because they want to have it for sense of security or whatever, but what is up with having to be forced into buying it by state mandate or law?

Anyone have a good rationale for why a society will force you to pay insurance on your car, even though you do not want to?

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Cars are dangerous, but our society is literally built around the assumption that hundreds of millions of people will own hundreds of millions of private automobiles. For this to work, the real costs of our car culture must be spread very thin.

Real costs = cars themselves, roads, pollution, foreign policy dominated by petroleum policy, costs of accidents (not just repairs, but medical care, lost productivity while recovering from injuries, etc.). It's a very long tally.

Part of this cost spreading is to require everyone to have insurance. Insurance spreads the costs of accidents from accident victims, to drivers, to corporations, to stockholders. The smallest car accident, which can be caused by even the best drivers, can lead to hundreds of thousands of dollars in medical bills. Without insurance, whose paying those bills?

The victim - not fair

The driver - possibly fair, but not efficient to wipe out someone's assets for a small accident; also, unlikely, given our bankruptcy laws, which would put the cost back on the victim

The government, with public healthcare - not as fair as putting some cost to the person who caused the accident

The risks are different with first-party insurance. If your home burns down, only you are financially ruined, and no stranger third-party is hurt. Likewise with your choice to carry health insurance.

And mandatory liability insurance isn't all that rare. Most businesses, in order to operate, are required to carry insurance, either by the government or a customer or a supplier. And home owner's insurance, necessary for a mortgage, includes liability coverage.

Good grief that was a messy answer.

JB

Sorry?

Tried to condense 80 pages of Prof. Abraham's case book into one post, as well as my own distaste for automobiles.

At least I didn't bring up how the minimum insurance mandated by the government doesn't fully cover even a small injury accident. Insurance law hasn't kept pace with the cost of medical care (and even automobiles).

You're not forced to insure your car.  Nobody gives a damn if you fix your car.  We just want you to fix ours if you screw-up.  You're forced to insure for damage you do with your car.  Its liability insurance, not collision and comprehensive insurance (which is elective).  State-mandated insurance won't fix your car ... it will fix the other guy's car, or house, or body, etc. if/when you make a mistake.

It is reasonable to require you to take financial responsibility in exchange for the privilege of driving.


JB

It is reasonable to require you to take financial responsibility in exchange for the privilege of driving.

Perfectly said!

So you guys must completely and fully agree with being legally required to pay for healthcare, life, and home insurance, eh? Alongside every "privilege" that a person has where there is insurance available for it. I wish I was as rich as you dudes...

That is not what he said.

On house insurance, that is enforced from the banks to cover the risk of their asset you are inhabiting as you slowly buy it from them.  
Regarding areas where the state covers the insurance cost, that is to allow the communities to rebuild and keep society stable.  I personally don't think we should pay house site lost twice to the same natural disaster from federal funds.

   

On health insurance are you saying you think people should have to prove ability to pay before ambulances are dispatched or people are admitted?

Good grief.  Do you understand the difference between liability insurance and comprehensive, homeowners, life, health, etc.?

Auto liability insurance laws require you to be able to pay for damage you cause to somebody else.  Health insurance, homeowners insurance, comprehensive insurance, life insurance, etc. pay for damage to yourself (actually, life pays your family if you croak, but it doesn't really matter for this conversation).

I don't think you should be forced to buy any insurance to repair your own body, or house, or car, or whatever.  If you wreck your car, or burn down your house, or break your arm ... and you can't afford to fix it ... I don't care.  Do without.  Your problem.  If you damage my car, and can't afford to fix it ... I care.  Liability insurance pays for the damage to my car, not yours.

Auto liability insurance is pretty cheap.

JB

Well said.  It shifts the costs of damages from the state to the person causing it.

Would you prefer debtors prison or debt bondage? Auto insurance is a condition of you taking on the privilege of driving. You can easily avoid paying it if you decide not to drive. I do wish there was some way you could self insure like with a savings account equal to the amount that liability would cover, a portion of that or some other set amount. You could then be saving that money and earning interest.

Actually, Texas (California, too) allows you to post a bond rather than pay for insurance.

Page 21, towards the bottom:

http://www.txdps.state.tx.us/driverlicense/documents/dl-7.pdf

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