Archive for January, 2010

Mandated Car Insurance

Sunday, January 31st, 2010

TheOzz at 9 years old driving and uninsured carThe comparison between car insurance and health insurance fascinates me.  Promoters of mandated health insurance often use car insurance as an example of how government requires citizens to purchase insurance.  What I intend to do here is explain some differences between mandated car insurance and mandated health insurance.

First car insurance is mandated by state governments not the federal government.  Car insurance is only required in my state (SC) if you own a car that you intend to register.  Every car owner is not mandated to purchase automobile insurance.  Yes folks, you can own a car in this area of the country without automobile insurance as long as you do not plan to put a license plate on it. You do not have to insure a car that you buy for the purposes of private use on private property.  The old 1964 Ford Fairlane that I drove around our little 26 acre hog farm as a child required no automobile insurance. The picture above shows me at about 9 years old chauffeuring my 3 year old sister (in a car seat!) and my dog Duke around the farm.  The car probably cost my dad a few hundred dollars and he was willing to risk that investment by allowing me to operate that vehicle without insurance.  By the way, do you think the government insured all of those clunkers that they recently purchased during the cash for clunker scam?

The second and arguably a more significant difference between government mandated car insurance and the proposed government mandated health insurance is that type of insurance that is mandated by the government is liability insurance.  Liability insurance protects everyone’s property except that of the owner.  Yes the liability insurance does help protect the owners assets form being sued but it does not insure the health or the owner or the owner’s car.  That type of insurance (collision/comprehensive) is not mandated by the government.  Many lenders require collision and comprehensive insurance to cover the car as long as a lean is carried on the car, but that is not government mandated in any way.