This article first appeared in the St. Louis Beacon: Should the law continue to require all drivers to carry liability insurance?
I think this requirement is one of our silliest and most damaging. Let’s look at the issue from both sides: the side of a person who has assets to protect and who carries insurance, and the side of a working poor person who has enough money for a car to get to a job, but not enough money for insurance.
The person with insurance is always worried about being hit by someone without insurance. Such an accident would cause a claim on the insured driver’s “uninsured motorist coverage” and perhaps an accompanying rate increase. (“Uninsured motorist coverage” is the coverage for a situation in which someone with insurance is hit by someone without insurance, and the insured party makes a claim on his own carrier.)
With that analysis, one must address two connected truths. The first truth is that regardless of the law, many, many drivers lack liability insurance. The second truth is that because of that first truth virtually all drivers with insurance are paying for uninsured motorist coverage anyway.
Let us now look at the issue from the perspective of the poor person with a job, that is, from the perspective of the person with enough money to own a car and drive it to work, but without enough money to buy insurance. I suggest that this person is critical in our society. A person with this profile has the prospect of escaping poverty and entering the middle class. If things go well, the person will have successively better jobs, and then home ownership, and then financial stability. At that point, America will have another success story, and the newly stable family will take care of itself.
But let’s consider that person’s situation in the early stages of emerging from poverty. The person has limited income and so may have to choose between buying food or paying rent and buying automobile liability insurance. Gee, that is a hard decision. Does anyone actually think that that person is going to buy insurance? Of course not. Instead, the driver is going to run the lottery every day and hope he isn’t pulled over for speeding, only to pick up an extra “no insurance” ticket.
If he gets such a ticket, our potentially upwardly mobile family suffers a major setback. Money has to go to the court system, and if the family cannot divert resources to get insurance the person’s driver’s license will be suspended. At that point, because the driver wants and needs to work, he or she will probably just keep on driving. Ultimately, however, he will get caught, probably lose his license, and maybe even go to jail for a time. At that point, the requirement to carry liability insurance will have destroyed the upward path and the rest of us may end up paying for this family’s basic needs via the safety net.
We thus have a law that doesn’t even work and that damages the path of those with a limited income but a place to live and a job into the mainstream.
This would be one of the easiest laws to change. If the state representatives who represent lower-income areas stood up in the capitol and asserted that their constituents would have a significantly better chance of achieving social mobility if we changed this law, I think the other legislators would go along.
And if the proposal meets political gridlock, I offer a compromise: Add a provision limiting financial recovery in an accident for any person not carrying liability insurance, regardless of fault, to actual out-of-pocket expenses. With that provision in place the objections of those who carry insurance ought to be mitigated.
About the authorBevis Schock is an attorney in private practice in Clayton. He serves on the Boards of the Show-Me Institute, a free market think tank, and Shakespeare Festival St. Louis, which produces Shakespeare plays in Forest Park free to the public.