In many states and countries, auto owners insurance is mandated by law before a motorist could get to register his car. Otherwise, his car will not be allowed in the streets. Such a law is passed to protect the general public welfare in cases of street accidents. However, there are also a few reasons why getting auto owners insurance should not be imposed or held mandatory.
Imposing auto owners insurance is one way of forcing financial responsibility to drivers. It basically means that every owner or vehicle operator will be held responsible for any damage he causes to another car in case of an accident. To prevent the possibility that he would run away from this responsibility, he is then required to insure his car.
But there are financially capable individuals who do not see the need to insure their cars. In case of any car accident, he is ready to shoulder the expenses. It is his personal choice. This is often called self-insurance because a person declares his financial capacity to pay for damages.
At the end of the day, it is a personal decision to insure a car or not, depending on an individual’s capacity to pay. Some people are on a strict budget that could hardly afford monthly payments on an insurance premium. They should not be forced to get one if they could not afford it. This should not buy them out of their responsibility if they cause damage to another car. A good alternative to mandating car insurance is to let them sign a contract which declares that they will provide compensation for damages or injuries they have caused out of negligence.
Most car accidents are due to a driver’s carelessness. He could have been driving under the influence of alcohol or speeding up unnecessarily. In these cases, it is very likely that the driver will be held liable for his negligent actions. The damaged party will usually file of criminal or civil cases in court. The car insurance policy is therefore hardly needed because it is usually just limited to paying for damages incurred on the car itself.
There are other laws that protect injured parties. Drivers could not get away that easily if they refuse to pay for damages they caused. Their licenses could be revoked if they could not fulfill their responsibilities first. He could be imposed with other penalties if he continues to delay his duties as the guilty party in the accident.
Auto owners insurance is a way of transferring risk from the driver to the insurer. If drivers are made to feel that no insurance could protect them, they might learn to drive more safely.