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The bogus auto insurance comparison

Posted by Richard on March 28, 2012

In debates over Obamacare’s health insurance mandate, its defenders invariably trot out the comparison with mandatory auto insurance. I’m really getting tired of it. But I’m even more tired of what a crummy job Obamacare opponents do of countering that bogus argument. Inevitably, the first thing out of their mouths is something like “that’s a state mandate, not a federal mandate.” Next, they usually stammer that “driving on public roads is a privilege.” Talk about missing the key point!

No state mandates that you carry collision and comprehensive insurance on your car (or, for that matter, insure yourself against injury). Of course,  if you borrow money to buy a vehicle, your lender will require that you have collision and comprehensive insurance as a condition of making the loan; they have a legitimate interest in protecting the property that secures the loan.

But state mandatory auto insurance laws only require you to purchase liability insurance (and in five states, uninsured motorist coverage) in order to cover property damage or injury to someone else. The purpose is to indemnify others against damages you cause. In some states, in lieu of liability insurance you can post a bond or provide other evidence of financial responsibility. In a couple of states (South Carolina and Virginia), you can just pay an uninsured motorist fee (around $500) and be on your way.

Whether that’s a legitimate exercise of state power is arguable. I say it’s not. If I’m concerned about being hit by someone who’s not financially responsible, I can buy uninsured motorist coverage (I am and I do). If I choose not to, I’ve voluntarily assumed the risk that I’ll be unable to recover damages from someone who hits me. But I sure wouldn’t man the barricades over the issue. On the long, long list of examples of government overreach, that one has to rank very near the bottom.

In any case, mandatory automobile liability insurance is not analogous to a mandatory health care policy on yourself (whose prime purpose in Obamacare is to force healthy people to subsidize the less healthy) and is entirely irrelevant to the debate over Obamacare.

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