WHY IS CAR INSURANCE MANDATORY
The debate about compulsory car insurance in nigeria extends back more than 20 years, considering that the advent of the very first automobile. It was apparent very in early stages that cars would crash and these crashes would create damages and that the person responsible would often struggle to buy them. Around 1925 Massachusetts and Connecticut became the very first two states to write compulsory car insurance laws, in effect creating a pooled solution to simply help cover the expense of at-fault drivers so they really wouldn't default on their payouts. Since that time, virtually every state in the union has enacted mandatory car insurance liability laws.
New Hampshire is the only state that doesn't mandate car insurance for all drivers. Instead, drivers simply need to prove they have the ability to pay for damages in the event of an at-fault accident. Drivers in New Hampshire who opt out of the insurance system have to publish a bond or cash corresponding to the quantity of damage caused in the crash.
It has often been wondered why America mandates car insurance however not health insurance. And without wading too much to the political waters, it is essential to first differentiate between collision and liability insurance. Collision insurance protects the automobile from fire, theft, vandals, etc -- and isn't mandatory if/when the vehicle is paid off. In effect, collision insurance is protection for you, the car owner -- and it's not compulsory.
Liability insurance, on the other hand, is more often than not mandatory since it helps protect other folks and their property. The thinking is that other folks -- and concomitantly the economy in general -- would suffer as a result of at-fault drivers not having the ability compensate others for losses incurred.
And, again, without getting too deep in to the debate surrounding American health care coverage, the thinking is that health insurance is for one's self and one's family, i.e. not for others you might harm accidentally. It's therefore analogous to collision insurance, which can be not in fact mandated by the federal government.
Well there you've it: a factual, or even wholly-satisfying, break down of why car insurance is typically mandatory. There are indeed some instances where you do not strictly have to have car insurance -- but it will seem that it's safest for you personally and everybody else if you do choose to buy it.
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