Why is Auto Insurance Mandatory? Is This Unconstitutional?

Mandatory automobile insurance is not unconstitutional either because driving is a privilege and not a right. You can always risk driving without auto insurance. Still, you will subject to heavy fines and be personally liable for any and all damage or bodily injury you cause in a motor vehicle accident. To find affordable auto insurance coverage near you, enter your ZIP code below.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Jul 20, 2021

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The United States Constitution guarantees certain freedoms for American citizens. Some people feel that car insurance is unconstitutional: does it violate the Constitution to require drivers to have car insurance? Why is car insurance mandatory in the first place?

Today, we’re explaining everything you need to know about the United States Constitution and how it relates to car insurance.

Courts Have Repeatedly Rejected Claims that Car Insurance is Unconstitutional

First, let’s get something out of the way: you’re not the first person to believe that mandatory car insurance requirements are unconstitutional. Many drivers have challenged various courts across the United States to argue that a car insurance requirement are unconstitutional.In the vast majority of these cases, courts have rejected the claim that mandatory car insurance laws are unconstitutional.

In October 1987, for example, the California Supreme Court issued a landmark verdict upholding the 1984 state mandatory auto insurance law. That law requires California motorists to prove they have liability insurance when stopped for traffic violations.

In this case, it was argued that the new law was unconstitutional because it effectively requires low-income motorists or vehicle owners to carry compulsory insurance without guaranteeing that insurance will be available at an affordable rate.

The Supreme Court of California, however, rejected this claim because all drivers can still obtain coverage through state-backed “assigned risk” program that all private insurers are required to participate in. This assigned risk program provides more affordable rates to low income drivers.

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Why is Car Insurance Mandatory?

Car insurance coverage first became mandatory in the 1920s. In the 1920s, municipalities across the country were dealing with a significant problem: we had this amazing new technology called the automobile, and a growing number of people of all income levels were purchasing automobiles.

However, these automobiles were also dangerous. People were driving these large, dangerous automobiles at high speeds around other people, property, and vehicles. When a car accident occurred, it caused far more damage than, say, a wagon accident had caused in previous years.

That’s when we developed mandatory auto insurance. Auto insurance was one of the most cost-efficient ways to protect the driver from driver license suspension and to do the right thing in the event of a car insurance accident causing serious consequences.

Without car insurance, only a certain number of drivers would be able to financially cover the damages caused by their car accident. However, those damages – like medical expenses and property damages – still need to be covered by someone. If neither driver or vehicle owner can afford to pay, say, $1 million in medical bills out of pocket, then society needs to incur those costs. Without comprehensive insurance, society would be absorbing huge costs from every auto accident.

New Hampshire is the Only State That Doesn’t Require Auto Insurance

Ultimately, every state in America requires you to prove you have an automobile insurance policy – except one. That state is New Hampshire, which was founded under the motto, “Live Free or Die.”

Today, New Hampshire drivers are not required to prove they have auto insurance. They are, however, required to prove they have the financial means to cover a collision they cause. If you have enough money to pay for the medical expenses and property damages incurred in a collision you cause, for example, then you can safely avoid buying motorist coverage in New Hampshire (assuming you’re willing to accept that risk).

Driving Is Not a Requirement

There’s another reason why a mandatory car insurance policy isn’t a violation of the US Constitution: driving is a privilege and not a right. You don’t need to drive a motor vehicle.

Every state has individual car insurance requirement you need to meet to enjoy the privilege of driving a vehicle.

Picture it like this: a company requires you to take a drug test in order to work for their company. That drug test is a requirement of working at the business. You’re not required to accept the job. The same thing applies to car insurance and the car insurance company, at least from a Constitutional perspective.

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Conclusion: Mandatory Car Insurance Doesn’t Have to Be Expensive

Car insurance in the United States is more affordable than a car insurance policy in virtually any other developed country. That’s because the United States has some of the lowest liability requirements. Drivers in some states are required to have just $10,000 of liability coverage. That means drivers on a bare minimum plan might pay just $40 to $80 per month for car insurance.

The fact that car insurance is affordable is important. The affordability of comprehensive insurance makes it a legal requirement according to the US Constitution. If the liability car insurance was unaffordable, then it would exclude certain low-income individuals.

It’s also important to remember that driving is a privilege, not a right.

Ultimately, if you genuinely believe your Constitutional rights are being violated by mandatory car insurance requirements, then schedule a consultation with a lawyer. However, most cases have upheld the idea that mandatory car insurance is Constitutionally acceptable.

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