Why is auto insurance mandatory?

College Confidential Community
1

<p>After all - as according to <a href=“http://en.wikipedia.org/wiki/Risk_homeostasis[/url]”>http://en.wikipedia.org/wiki/Risk_homeostasis&lt;/a&gt; - people tend to take fewer risks when they know that the effects of taking risks would be more devastating to them - and those risks would be more devastating to people who have auto insurance.</p>

<p>So then how would it benefit the government for auto insurance to be mandatory? It it due to third party injuries?</p>

2

<p>for me at least, dying or being seriously injured would be much more devastating than any dollar amount could be.</p>

3

<p>yes but most accidents don’t result in fatalities</p>

4

<p>its so that if you cause an accident, whether or not you “tend to take fewer risks”, their will be available compensation for your incident.</p>

5

<p>I guess auto insurance is necessary to provide people with a way to pay for damages when they are responsible for an accident and do not have enough personal savings to bail themselves out. It’s probably true that, given that people realize they will be held solely responsible for financial recuperation, the number of accidents would go down. However, accidents would not completely disappear. I think it’s better to have all people prepared, rather than have some be able to pay thousands of dollars in damages and the rest sent to jail or left to live in a financial nightmare scenario for the rest of their lives.</p>

6

<p>because if you’re ever in an accident (even a small one) you and the victim (yes you caused the accident!!!) could exchange insurance and get it over with. that’s the car.
Is there also life insurance as well? well. that’s just to make money because alot of accidents don’t kill (yes i know some do, but not all)</p>

7

<p>The reason why auto insurance is mandatory is in order to protect you and any other drivers in case you have a car accident. If you’re in an accident caused by a person with no insurance then it’s up to you to pay out of pocket for the damages to your car which can range from hundreds to tens of thousands(if your car is totaled) of dollars to repair.</p>