[toast0]

Car insurance isn't mandatory; proof of financial responsibility is. In California, you can get a compliant insurance policy, deposit $35k with the DMV, setup a compliant $35k bond, or a self-insurance certificate which requires a larger deposit and is really for commercial motor vehicle carriers. I don't think it's unreasonable to require means to pay for damages when operating a motor vehicle; it doesn't take much to cause damages well in excess of California's deposit amount; washington state requires $60k.

For home insurance, usually it's a mortgage requirement, which is not by law. In condominiums, the community may require it of individual owners, and then it's not really law either.

[tptacek]

Side note here on how ludicrous it is that you can substitute a $35,000 bond for a real insurance policy, given the likelihood that any driver is going to cause losses far in excess of $35,000.

[toast0]

Minimum insurance in California only covers the same $35,000. $15,000 for injuries to one person, $30,000 for injuries to multiple people, and $5,000 for property damage.

It's completely insufficient, but it's not nothing. A reasonable person would carry much more insurance.

[creato]

The 35k bond doesn’t preclude getting sued for an unbounded amount. Presumably the idea is that a 35k bond demonstrates you have more available in case of a judgment.

That said, that seems like a risky idea in a world full of LLCs, trusts, etc.

[dragonwriter]

No. it demonstrates exactly the same minimum ability to pay as the alternative minimum deposit or insurance coverage, which are also $35k.

[tptacek]

Not having any insurance coverage at all doesn't preclude you from getting sued for an unbounded amount.

[dragonwriter]

$35,000 is also the minimum liability coverage ($30,000 for death or injury to multiple people plus $5,000 for property damage.)

In either the bond, deposit, or liability insurance scenario, the responsible party remains on the hook for whatever is not covered in advance.

[j45]

Fair, but there are lots of places, like Canada which require some types of insurance by law.

[toast0]

I'm unfamiliar with Canadian law, can you provide an example jurisdiction and required coverage?

[cldellow]

In Ontario, the Compulsory Automobile Insurance Act [1] requires that all owners/lessees of vehicles take out insurance policies. The Insurance Act [2] sets out that the minimum amount should be $200,000.

$200,000 is a much better floor than, for example, Ohio's $25,000. An Ohioan friend was injured by a motorist who had the minimum coverage. Her care cost more than that. The motorist who caused the injuries didn't have a lot of assets and she was unable to recover the excess from the motorist.

Still, there are some perhaps unintended downsides. Canadian rental car companies, as the owners of the vehicles, are obliged to provide $200,000 insurance as part of every contract. As a result, it seems there's not much market for them to sell excess liability insurance, and none do that I'm aware of. I, as someone who has plenty of assets to lose if I injured someone, would happily buy a higher liability insurance. Doubly so when I rent a car to travel to the US, since the terms of the contract are often "the rental car company will provide the minimum insurance required in the jurisdiction where the claim is incurred".

[1]: https://www.ontario.ca/laws/statute/90c25 [2]: https://www.ontario.ca/laws/statute/90i08

[toast0]

Thanks! That is mandatory insurance.

I agree that 200k is a much better minimum. Although I would think a deposit of $200k should be just as good as a policy of $200k... But the Ontario law doesn't allow for a deposit.

I wonder if there's a speciality business available in Ontario for single customer insurance, so individuals or businesses can self-insure without risk pooling.

[halostatue]

https://duckduckgo.com/?q=ontario+minimum+automobile+insuran...

https://www.ontario.ca/document/official-mto-drivers-handboo...

https://www.ibc.ca/insurance-basics/auto/types-of-auto-cover...

For the US:

https://www.forbes.com/advisor/car-insurance/minimum-require...

[j45]

The links below beat me to it.

Auto insurance is mandatory, and it can be government run, or private.

Other areas of insurance can be indirectly required, say one side of renting, etc. Effectively lenders can set the conditions they desire.