This is a complicated question, but it basically boils down to people being responsible for their actions. The best way to illustrate this is through an example. So let’s imagine a world where there is no mandatory car insurance.
You are driving down the road and are hit by another car who ran a red light going 90 miles per hour. Your car is destroyed and you are seriously injured. You have suffered serious economic damage, because you lost the value of your car and you have tens of thousands of dollars of medical bills.
But the driver of the car is belligerent and doesn’t take responsibility for his reckless driving. Your only option is to sue him in court. Suing him costs you thousands of dollars in lawyer fees, and then even if you get a judgement against him he can’t afford to pay it. So you’re stuck with this huge loss that was no fault of yours.
Now imagine that there are 16,438 auto accidents in the US EVERY DAY. Not only would people constantly be suffering huge economic hardship due to car accidents all over the country, but the courts would be overwhelmed with people suing each other on recovering the damages.
In short, driving cars would be almost impossible for everyone but the very rich because the risk becomes too great to be on the road. Most people can’t afford to lose the value of their car, plus have to pay for medical bills caused by accidents that weren’t their fault.
The only way to fix this situation is to force everyone in a particular state to have insurance to cover their responsibility for an accident they might cause.
If everyone is forced to carry insurance, the accident scenario above plays out much differently. The negligent driver’s insurance will pay to repair your car. It will also pay for your medical bills. So instead of you losing a huge amount of money, you are made whole again (economically at least). The negligent driver benefits because he isn’t forced into bankruptcy to pay for your damages. And the court isn’t bogged down with the lawsuit. It’s a win-win-win for society as a whole.
Now that doesn’t mean you’re stuck with your insurance company! When you go to the big brand stores, you have to shop around with multiple companies to get multiple quotes. When you come to us, we are independent and can shop several companies at once. And when one company starts raising rates, we’ll shop your renewal to find you a lower rate with a top company.
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