Insurers Not Fans of Mandatory Car Insurance
Mandatory car insurance is something that some insurance companies don't support. Car insurance companies believe laws that require drivers to purchase minimum car insurance coverage don’t work. Seventeen percent of drivers do not meet the mandatory auto insurance requirements anyway and investigating when and if drivers are covered only slows down the claims process further. Scroll down to learn more.
Free Insurance Comparison
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
UPDATED: Jul 19, 2021
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider. Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.
Yes, you read that correctly. Insurance companies apparently have a problem with a law that says you have to buy their product.
Apparently there is “broad insurer opposition to state laws that require drivers to buy car insurance,” according to a recent piece on Insurance.com.
How could this be?
This is evidenced by the sheer number of uninsured motorists still present on U.S. roadways.
In fact, 17 percent of drivers admitted to driving without insurance at one point or another.
What are the complaints?
Paperwork and regulation…two common results of the government getting involved in the business.
Insurers are caught in the middle, acting as babysitters for the government, keeping track of which policies are “in-force” for who and on what day.
If an insured’s policy cancels, insurers have to notify the state. In some states, insurers have to determine if an insurance policy was in-force at the time of an accident.
Doesn’t sound like much work, but repeat the task thousands of times a day for individuals who allow their policy to cancel several times during a term and you can see where the headaches begin.
The article also quotes David Snyder, Vice President and Associate General Counsel for the American Insurance Association, who said mandatory car insurance laws are “used as a justification for a lot of intrusive regulations that limit your ability to price for risk.”
This means the government forces drivers to obtain insurance, and as a result, get the keys to the insurer’s house.
And insurance companies have to present their proposed rating structure to the state department of insurance for approval before releasing the products to the public.
In short, car insurance rates that don’t satisfy the regulators don’t “hit the street.”
At the end of the day, the article highlights the fact that there are tons of people out there driving without car insurance.