[cucumber3732842]

>There's nothing fairer than user-pays, especially when users can choose to pay less by changing their behavior.

If user pays is so fair why does anyone who could access credit or liquid assets in excess of their state's minimums have to pay hundreds to thousands per year for auto insurance?

[AlotOfReading]

Most states allow you to go without insurance by fronting the cash. It's called self-insurance. You put up some minimum amount, file a form with the state DMV, and keep the approval certificate in the vehicle like normal.

It's relatively unknown for individuals because most people have no desire to lock up tens or hundreds of thousands of spare dollars just to avoid car insurance. As far as I'm aware it's primarily used by rich collectors who need to insure large collections that don't fit more traditional insurance profiles. Much more useful for businesses.

[cucumber3732842]

>Most states allow you to go without insurance by fronting the cash.

That's BS on it's face. Most states don't allow it or they restrict it to big business and government agencies.

>because most people have no desire to lock up tens or hundreds of thousands of spare dollars just to avoid car insurance.

Most people's money isn't making a return greater than what insurance would cost them.

Second, this completely ignores my point about credit. I can easily get hundreds of thousands of dollars in credit secured against my house or tens of thousands in unsecured credit (credit card). Why must I pay to keep the lights on at some insurance firm?

And I'm not particularly rich. If the numbers pencil out for me then surely they must pencil out for millions of people.

[AlotOfReading]

    That's BS on it's face. Most states don't allow it or they restrict it to big business and government agencies.

It's 11 states, covering roughly a third of the US population. There's a quite few more if you own significant numbers of vehicles. You can s/most/many/ if it makes you feel better.

    Most people's money isn't making a return greater than what insurance would cost them.

You wouldn't be making money on a self-insurance bond either. It's locked up with the state or in a surety account. You can also expect to pay a significant fraction of your regular insurance costs to maintain a surety bond.

    Second, this completely ignores my point about credit.

Credit lines expire when you die (say in an accident), they're not guaranteed to pay out the full amount at any particular time, and the courts probably shouldn't go around binding third parties to pay out on your behalf.

States' interest here is in guaranteeing that there will always be a minimum amount of money to compensate victims, regardless of what other financial shenanigans you have going on in your life. That's not a standard that lines of credit and investment accounts meet. Self-insurance is simply a terrible option for most consumers, so no one does it.

[chad_oliver]

That's an entirely separate issue, isn't it? In my country (New Zealand) there are no requirements to have auto insurance. If you don't have insurance and you hit a million-dollar car you're gonna be in an awkward situation, but that's a risk you're allowed to take.

Note that you _are_ legally required to pay your annual ACC levies, which fund no-fault cover for injuries. However that doesn't cover property damage.