Reader Question: States Where Insurance Isn’t Mandatory?

Here’s the latest reader question, along with my reply!

Brian writes: You’ve always talked about the immorality of forced insurance. You live in Virginia. Is insurance really not required in Virginia? Or are there silly exceptions that cover pretty much everyone? For example, if you are under 18 in NH, you need insurance. Or if you are found responsible for an accident and you don’t have insurance, you have to have state-funded insurance for three years. What’s the deal with Virginia? Can you just opt out?

My reply: Virginia generously allows one to pay an Uninsured Motorists Fee of $500 annually in lieu of “coverage.” Of course, now you’re being forced to pay for no coverage at all! Any accident damage is solely your responsibility – which is as it ought to be, of course. But – wait – you haven’t caused any damage. You are being made to pay for “damages” you might cause.

There might be some degree of moral acceptability in that if the money you’re forced to hand over to the state were placed into an account of some kind that would “cover” damages in the event you actually do cause them.

Hey, that would be . . . insurance! 

But in fact the UMF is just a fine – imposed for the “offense” of having caused no harm to anyone.

So it’s a lose-lose situation. Pay the UMF and over say ten years you’ve been mulcted of $5,000. Or pay even more for “coverage” . . . despite you’re not having cost anyone else a penny in damages.

The one benefit, if that word can be used, would be in the event that actual “coverage” is substantially more than the UMF and you’re not someone who is likely to have a claim filed against you. In that case, you might “save” some money – i.e., be forced to hand over less to these gangsters.

People sometimes ask me why I use such terminology. I do so because it’s apt terminology. Insurance, as such, is a perfectly legitimate service. It becomes illegitimate when you are forced to pay for it. It becomes the same thing as having a gangster come into your store and say, “nice place  you have here; it’d be a shame if something were to happen to it…”

Some say it’s different altogether. That mandatory insurance is simply protecting the public against the irresponsible. That sounds reasonable if not deconstructed. Who is “irresponsible”? The driver who hasn’t caused an accident? Well, he might. Fair enough – deal with him when he does. To hold him “responsible” before the fact is a truly outrageous thing – and a dangerous thing, which by now ought to be apparent to people. If you can lawfully force people to pay for harms they have not caused in one case, then why not in others? It has just been proposed in CA that people who own guns be required to carry insurance; I’ve warned for years this was coming – because mandatory car insurance came. It’s the same principle, applied generally.

Tragically, insurance would almost certainly be much more affordable – and thus, more people would freely choose to buy coverage – were it not mandatory. If the insurance companies were obliged to price their product reasonably – no greasy “surcharges” based on nothing more than a trumped-up traffic ticket, for instance – and they knew drivers could refuse to pay if they attempted to charge exorbitant rates – most people could easily afford the small cost of a liability policy, which most people (me, certainly) would probably buy because it would make sense to do so.

And because we wouldn’t feel like we were being shaken down by gangsters.

. . .

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