Alternatives to mandatory auto insurance

As has already been pointed out, there are grave public dangers involved in making automobile liability insurance universal by compulsion; and there are large numbers of eminently responsible automobile owners who plainly do not want to insure and upon whom an obligation to insure would be an imposition entirely useless for the purpose intended. Auto insurance comparison online is free.

Clearly such an imposition would be arbitrary, paternalistic and bureaucratic. All that a government based upon principles of liberty can rightly exact is that each owner shall put up security or a guaranty of responsibility in whichever best suits him of all practicable forms that will affect the purpose above specified.

Few of the measures now pending or proposed satisfy this condition. The majority of such measures prescribe that, as optional alternatives to insurance, the automobile owner must either (a) file a surety company bond, or (b) deposit cash or securities with a public official. But neither of these two promises to be a satisfactory alternative to insurance in many cases.

Corporate surety bonds without a deposit of cash or similar collateral are not available to a majority of automobile owners. And the expenses, difficulties and delays incident to the recovery of funds that once get into the hands of public officials will deter all but the most optimistic from having recourse to the other alternative. Consequently a law which would permit only these two alternatives to insurance, would practically be neither more nor less than compulsory insurance for the vast majority.

Even with their splendid nation-wide organizations it is difficult for the stock casualty companies to check up accidents reported by the small percentage of car owners now insured by them. There are many Cases every day involving gross fraud on the part of claimants, collusion between claimants and the assured and the like. Visit this page to see best rates in your area.

The number of cases where members of a family seek indemnity when the insured head of the family is said to be responsible for the injuries complained of, is becoming quite alarming from an underwriting standpoint. The guest hazard also is growing. Any insurance adjustor can tell you how claims quickly mature and grow in size when it is discovered that the car owner carries insurance.

Companies writing workmen’s compensation insurance report not only a steady increase in accident frequency in many industries, but also an alarming increase in malingering. A minor scratch is often an excuse for a week’s lay off at the expense of the insurance company. And I might say in passing that there is no statistical foundation for Judge Marx’s assumption that the workmen’s compensation laws have decreased accidents.

One need not be possessed of a gifted imagination to picture the happy hunting ground which would be provided for claimants under the Marx wholesale indemnification plan.

Automobile accidents are widely scattered

Indeed, if the State is to enforce contributions from automobile owners for the relief of highway traffic victims I see no reason why the same paternalistic theory should not be applied in all accident cases. This might be accomplished through a general tax levy. In other words, the state might just as well underwrite both accident and health insurance for all of its citizens. Taxpayers might grumble, of course, but taxpayers always grumble and no one pays much attention to them nowadays. Look up auto insurance rates by zip code.

It ought not be necessary for me to spend much time in discussing the many dangers incident to opening in any state capitol such a pork-barrel as the Marx plan provides. I will, however, state a few of them.

As all victims would be paid regardless of fault, all that the claimant would have to do would be to file proof of the accident and show the extent of his injury. In most cases the evidence would be entirely within his control. The fraud possibilities of such a situation are tremendous. That political considerations would weigh heavily in the distribution of such a fund need hardly be argued.

An army of officers and investigators would be needed to check up every accident if the grossest kind of frauds on the part of claimants were to be avoided. And perhaps even more officials might be needed to check up some of the investigators. Unlike industrial accidents, automobile accidents are widely scattered and often occur in out of the way places. Imagine how many state job holders it would require to make proper inquiry into every highway accident that occurred in Ohio this year!

Automobile accidents and insurance claims procedure

Mr. and Mrs. Harvey Willis and two children live on the fourth floor of a tenament apartment. The parents are burned to death in a fire caused by a cigarette carelessly thrown into a pile of rubbish carelessly accumulated in the basement. Is a state fund jack-pot contemplated to pay these children the $13,000 they would receive under the Marx plan if their parents had been hit by a train while on a joy ride? It is not. Interested to learn more about car insurance basics?

Gordon Cole slips on an icy sidewalk and breaks a leg. He is a day laborer and sole support of a large family. Is there any state fund jack-pot to pay Gordon $4 a day while his leg is mending? There is not.

These illustrations also might be continued indefinitely, and all of you also can add to them from your own personal knowledge. What I am this time trying to impress on you is the fact that automobile accidents do not cause all of the suffering and distress which go to make up the uncertainties of life. And I also am trying to make you see that the principle of compensation regardless of fault as to one particular kind of accidents or to all classes of accidents is so glaringly and startlingly inequitable that it should be rejected on the ground of public policy, if for no other reason.

Claims and damages for injuries in automobile accidents

Moreover the powers of a state to burden or restrict “interstate commerce,” even where Congress has not exercised its power of regulation, are limited. Interstate commerce “consists in intercourse and traffic, including in these terms navigation and the transportation and transit of persons and property, as well as the purchase, sale and exchange coming in from other states.” And such cars may be subject to compulsion to carry insurance under the laws of their respective home states. But of the many measures for compulsory security yet proposed, nearly all would exempt automobiles coming in from other states (for reasons already indicated). Compare car insurance rates now!

That a compulsory security law would entail a large increase in the public forces now engaged in the registration of automobiles goes without saying. And an examination of the pending measures for compulsory security or insurance shows that under many of them other state departments would be similarly involved. The increase in public expenses and consequently in taxes from these causes would be considerable.

Moreover compulsory security would, as has been previously explained, result in a very large increase in litigation. In Boston, according to an estimate attributed to the Massachusetts Insurance Commissioner, about half the jury cases tried in the courts are for damages for injuries in automobile accidents. In Cincinnati the courts are so flooded with such cases, that one of the Judges of the Superior Court has made the suggestion that the courts should be relieved of this burden by providing for compensation, out of a state fund, to all persons injured in automobile accidents, regardless of fault.

Car insurance and fatal claims

In a bulletin dated December 30, 1924, the National Automobile Chamber of Commerce claims that already, as a result of organized efforts for prevention in certain localities, “the increase in motor fatalities has been checked.” According to reports received from various agencies in such localities, the number of fatal accidents in November, 1924 was reduced to 363, from 419 in November, 1923, in the face of a 16 per cent increase in the registration of automobiles. Check out auto insurance rates in your area.

Referring to accident prevention, the National Conference on Street and Highway Safety has pointed out that one of its most important phases “is the problem of securing uniformity of legislation, regulation, statistics and practices.”

The flow of street and highway traffic recognizes no political boundaries and cannot be hampered by changing principles of control, even though local conditions may dictate the necessity of local changes of detail, without creating that confusion and uncertainty which is in itself a menace to the safety of motorists and pedestrian alike.
The same observation applies to the problem of securing financial responsibility on the part of automobile operators. There are great practical difficulties in the way of procuring compliance with requirements for insurance or security imposed under a state law, by automobiles coming into such state from other states.

If such cars should be exempted from the application of the state law, manifestly the state would discriminate against its own citizens, besides which the law would fail to give protection to its citizens against injuries caused by such cars. On the other hand, if, by such requirements, automobiles from other states should be largely excluded, millions in trade would be lost to the state.

Measures for prevention automobile accident injuries

Opportunities for accident prevention are immense. And the field of prevention has as yet been comparatively neglected, though in some few states and cities beginnings have been made. Compare car insurance quotes online now!

To start with, it should be appreciated that we are not confronted with any general or growing disposition to recklessness. On the contrary, the ratio of injuries inflicted to the number of automobiles registered is steadily decreasing. That is convincingly indicated by the following data, from the “Bulletin of Safety Education,” February 1, 1925, published for the Education Section of the National Safety Council, by the National Bureau of Casualty and Surety Underwriters, relative to automobile accident death rates:

But by thorough measures for prevention the absolute number of automobile accident injuries can be largely reduced. That is shown by the following illustrations of what has already been done:
In Connecticut, according to “Bulletin No. 13,” of the Department of Motor Vehicles, dated November 18, 1924, the State Police were put on the roads in full force on May 1, 1924. The following comparative figures of fatal accidents show the results:

Total fatally injured, 1923 1924
January to April—both inclusive 37 88
May to October—both inclusive 185 140

And from the full figures, here epitomized, the Commissioner of Motor Vehicles deduces the conclusion: “It is apparent that police discipline and supervision . . . are producing results in Connecticut.”

In 1924 the Massachusetts Safety Council organized a special campaign in the cities of Cambridge and Somerville, which had shown the highest ratio of fatalities to children of any cities in the state. As a consequence there was a reduction of five in the number of children’s deaths in that area, during that year, as against an increase of forty children’s deaths in the state as a whole.

Ohio car insurance requirements

This much can be said of the Marx scheme, it is simple. Stripped of all garnishments, it provides:
First: That all automobile owners in Ohio as a prerequisite to obtaining a state license contribute a specified sum to a state insurance fund “jack-pot.” Visit this website to get free quotes.

Second: That every Ohio citizen injured in this state in an accident involving an Ohio owned car be paid a stipulated compensation out of this “jack-pot.”

Third: That the premium payment by the car owner relieves him of all civil liability for any accident in which he may be involved and the injured person must accept the state award in full settlement or go without.

That’s all there is to it. Nothing could be simpler. It is true some minor modifications have been added from time to time, but these are not material. Because of the criticism which has been hurled at the state insurance fund proposal, it is now suggested that perhaps private companies might be permitted to write this business. That I am sure is only a temporary concession by the author. His whole theory naturally revolves about the state fund idea. And in addition I am quite sure there are not many private liability companies which would want to underwrite business under this plan at any price.

Financial Responsibility for Automobile Accidents

Compulsory security for the establishment of financial responsibility for automobile accidents would be merely a palliative for the evil it is designed to remedy; for no money indemnity can really compensate for loss of life or limb. Auto insurance quotes comparison made easy! Enter your zip above to get a quote.

The Committee of Nine was organized to study the question of Financial Responsibility for Automobile Accidents. It was comprised of recognized leaders in the insurance field and expresses the consensus of opinion among members of the insurance profession. The entire report is printed in a 35 page pamphlet which may be obtained from the Committee at No. 1 Park Ave., New York City. Only selected parts of the report are given here.

The specific evil sought to be palliated is that often persons entitled to damages for injuries in automobile accidents are unable to collect because of the financial irresponsibility of the owners or operators of the automobiles at fault. Manifestly this is a consequence of a far greater and more fundamental evil, which is that accidents occur in the operation of automobiles through the faults of the operators.

A reduction of this fundamental evil would proportionately remedy—and not merely palliate—the secondary evil for which compulsory security is proposed as a remedy. Common sense, therefore, dictates that it is against this root evil that remedial efforts should be concentrated.

Insurance policies and types of coverages.

Let us consider a true analogy to the case of the motor vehicle. Fire-arms are owned by many. The criminal, the insane, the careless cause untold suffering by their misuse. Victims lack financial recourse a hundred times more frequently than in the case of those injured by motor vehicles. Should the state tax every weapon-owner in order that those victims be adequately recompensed from a central fund, irrespective of the circumstances involved? As yet there has been no pressing demand for such a measure. Ready to compare quotes? Click here.
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