Tuesday, August 10, 2010

The Issue of Mandatory Insurance (Part Two)

As was mentioned last week in the post The Issue of Mandatory Insurance, the recent passage of Proposition C in Missouri has re-opened the debate as to whether insurance can be made mandatory at all. Breaking this down further, can divisions be made between the different branches of insurance, such as life, health and property casualty?

Taking California as an example, although it is mandatory for anyone registering a vehicle to provide proof of insurance at the time of registration, the fact remains a large number of drivers presently on the road in the Golden State have no insurance. An exact percentage is difficult to deduce, but best guesses place the number from 18% t0 25%. In simple terms, should the higher end estimate be accurate, one out of four drivers places the financial burden squarely on the three other drivers who do carry insurance. And, of course, their insurance providers.

Given how regardless of how ecologically-minded and environmentally-friendly various elements of California society fancy themselves, the fact remains we are an auto-dependent populace, there is little outcry against the notion of mandatory auto insurance. For most, their car is not only a major financial investment. It's the means of transportation on which they must depend for transport to and from work. Public transit in California is spotty in both quantity and quality. Even with the increasingly woeful condition of California's roadways on both the local and state-maintained level, these roads are vital. As are the cars driving across their surfaces.

Considering the above, and the understandable reluctance for anyone to bear the financial burden of someone else's mistakes behind the wheel, as noted not much of anything is said against mandatory auto insurance. However, at the same time the law is routinely ignored by an alarmingly large number of people who view driving as either a right, or a necessity, that cannot be encumbered with such legal matters as, say, responsibility.

The argument in favor of such a law rests, among other items, on the basis of not placing an undue financial burden on one party carrying insurance by another not carrying insurance. This ultimately translates into an undue burden placed on the insurance providers, but it is more than a little doubtful this fact often enters the consideration.

In this light, what is the difference between mandating everyone who drives carry auto insurance and mandating everyone who breathes carry health insurance? Assume for a moment the purpose of mandatory auto insurance is avoiding an unfair financial burden being placed on those who carry insurance, thus are charged higher rates than would be the case if everyone had insurance. Why? To cover the expenses of those with no insurance.

Why, then, is this not applicable to health insurance?

Leave your thoughts in the Comments area. Thanks!


  1. "Why, then, is this not applicable to health insurance?"

    um, because no matter how "auto-dependent" a society is, one still has the option of not buying a vehicle.

  2. Not to mention that one of the penalties for continuing to drive without auto insurance is the revocation of your driver's license.

    There better not be a similar penalty for refusing to purchase health insurance...