Mandates Never Work: The Situation of Automobile Insurance

Some readers of my current piece on Ezra Klein’s misleading explanation of the “individual mandates” were amazed that, despite currently being mandated, 14 % of drivers are uninsured.

This really must not be surprising. I wrote about this for the Nationwide Center for Policy Examination in 2006  At the time, I wrote:

  • All but 3 states mandate car insurance, but 14.6 percent of America’s drivers remained uninsured in 2004, in accordance to the Insurance coverage Analysis Council.
  • No state mandates well being insurance coverage, but 17.2 percent of the population lacked overall health coverage in 2004, according to the Worker Advantage Investigation Institute.
  • In 17 states, the uninsured price for car is larger than for overall health.

What is remarkable about finding is this: contemplating that driving is a voluntary action and enforcement is fairly simple – producing men and women demonstrate proof of insurance coverage when they register their cars.  Even more, automobile coverage is relatively affordable, specifically considering that the only element of the coverage mandated in most states is the damage you may possibly do to other men and women and their residence.  You are not needed to insure for the injury you do to yourself or your very own auto.

This, despite the truth that the penalties for non-compliance can be significant:

  • In Kentucky an uninsured motorist can be fined $ one,000 and 6 months in jail Wyoming also has a 6 month jail term and a $ 750 fine.
  • In Louisiana, the driver’s vehicle can be impounded for failure to insure.
  • However the charge of noncompliance is 12 percent in Kentucky, 11 percent in Wyoming and 10 percent in Louisiana.

About this time I did a comparison of the price of non-insurance for auto versus wellness in sixteen states in which necessary car insurance coverage resulted in larger prices of non-compliance than for overall health, which was voluntary.

Fee of Non-Insurance coverage, Car versus Wellness, by state, 2004

State Car Overall health
AL 25. 16.3
AZ 22. 19.6
CA 25. 21.6
DC 21. 11.5
DE twelve. 11.5
HI 13. 11.5
IA 12. 10.9
IL sixteen. 15.9
IN sixteen. 14.6
KS 13. 12.7
MI 17. 12.4
MN 8.
MS 26. 19.2
OH 15. 13.3
RI 14. 8.7
WA 18. 16.

Table: The state-by-state breakdown of uninsured motorists is from, “Uninsured Motorists: 2006 Edition,” Insurance Research Council, 718 Providence Rd. Malvern, PA, 19355. The state-by-state breakdown of the population uninsured for wellness care is from, “Sources of Health Insurance and Traits of the Uninsured: Evaluation of the March 2004 Present Population Survey,” by Paul Fronstin, Worker Benefit Investigation Institute, December, 2004.

More not too long ago the Wall Street Journal weighed in with some updated numbers. This post noted that uninsured motorists do not just harm themselves, they can inflict enormous harm on other folks. It cites 1 story from Oklahoma that resulted in $ 500,000 in health care bills to an innocent couple “when a driver plowed by means of a quit signal and crashed into the Jeep in which they were riding, sending them both to the hospital with severe injuries.”

It reviews that state efforts to beef-up penalties have had tiny result on the issue:


Appear, it is a fantasy that a group of legislators in Washington, DC or Albany New York can wave their magic wands and make everybody do what they want. A few years ago, I gave a speech to a group of state legislators in Albany shortly following New York enacted a new law prohibiting the use of hand-held cell phones even though driving. In the taxi going from the airport to the venue I observed that every single single auto on the highway was violating the fifty 5 MPH velocity limit, with out exception, and at least a third of the drivers had been chatting merrily on their hand-held phones.


There is always a important portion of the population in the United States that is indifferent to these laws or too dysfunctional to obey them. That could not be the case in Europe, but it positive the hell is here.

Legislators could make themselves truly feel good by enacting this kind of a mandate – “We have taken decisive action to repair this horrible issue!” – but passing a law that will extensively be ignored does no 1 any good. In truth, it diminishes respect for laws usually.  Legislators would be better off merely passing a resolution – “In the viewpoint of this physique, no one ought to ever do X, Y, or Z!”

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