Should Car Insurance Continue to Be Mandatory?

Since the passage of the ACA, or Affordable Care Act, in 2010, there has been increased discussion concerning government-mandated purchases. The most frequently used comparison to the ACA is the car insurance mandate found in all but a few of the 50 states, in some form. If you want to drive a car in most U.S. states, you are required to carry a certain amount of liability insurance, and if you are pulled over, you must be able to show a law enforcement officer your proof of insurance or financial responsibility.

To have a well-rounded discussion concerning mandatory car insurance there are a few questions that need to be answered. Where did the car insurance mandate originate? What was the catalyst for its creation? Is it effective? These valid questions can reveal the strategy behind this mandate, and it can also help shape future discussions regarding state and/or federal commerce mandates. Now, while most states makes provisions in their law that car insurance is but one form of “financial responsibility,” the vast majority of drivers use car insurance to meet that requirement.

The Obvious Benefit of Liability Coverage

It doesn’t take much deduction to uncover the catalyst for mandated auto insurance. Once cars started crashing back in the 1920’s and the party at fault couldn’t afford to cover the damages caused, states began to require people to carry auto insurance in some form.

Liability insurance is not meant to protect the driver in case of an accident, it actually is meant to protect other drivers. Yet, even with this mandate, a percentage of drivers fail to secure and maintain the legally-required coverage. Most auto insurance companies offer additional coverage to protect drivers against uninsured motorists for this reason.

It is difficult to determine how many people would opt out of liability coverage without the threat of legal sanctions. For the time being, there is no great call to end this mandate so it will remain. It may not be the perfect solution, but in the U.S. we cannot avoid solutions due to their imperfect nature or we will never make progress with any problem.  As for its effectiveness, many injured drivers have recovered damages from these liability policies that might not have without the mandated coverage.

The Political and Ideological View

An important distinction for those who lean right politically is that a state government mandate is different from a federal government mandate. States have limited power due to the fact that their laws only affect the people of that state. Those who are uncomfortable with increased federal power are generally in favor of more power remaining in the hands of states. For this reason, you rarely hear much dissatisfaction concerning state-mandated car insurance.

The auto insurance mandate serves a vital purpose.  It is only right that each citizen that enjoys the privilege of driving is able to cover at least some of the costs should they be at fault in damaging another citizen’s vehicle or cause injury to another. While any mandate does cost us a little bit of freedom in a sense, some situations call for a solution that addresses societal concerns on a broader scale. Driving down publically- funded highways in a steel cage at high rates of speed calls for a bit more government intervention than cautious warnings.