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What's Wrong with Car Insurance?

Mandatory car insurance is a criminal fraud.

By Gregory Allan

Mandatory Liability Insurance for a Car?

We all know that cars must be regulated, and insured, right? After all, they are big heavy chunks of metal, flying down the road at fast speeds. Cars are dangerous, and we need protection from them.

Ever skeptical, I decided to test this theory. I stood in front of my car, and asked it to try and hit me. I was surprised when the car ignored my request; I've always suspected it secretly doesn't like me. Then I realized the keys were in my pocket. Perhaps I should start the car? So I did, and tried again. The car just sat there. Inspired by a sudden idea, I ordered the car to run me down, immediately, where I stood. It was a risky move. The car, after all, is mine; it must do what I say. Nothing. Disillusioned now, I begged; I pleaded. Finally I concluded the car would do nothing without me, or someone, behind the wheel.

To the best of my knowledge, every State in the united States of America now mandates that if we drive a car on the public roads, that car must be insured against personal liability and property damage. Insurance companies are heavily regulated (perhaps they too are dangerous?), and offer their policies within the strict guidelines placed upon them by government. I have it on good authority that insurance executives wrote those guidelines, but legislatures across the country must have liked them.

This means your car is probably insured. If it runs out and injures someone, or damages property, then (it?) you are covered. Right? Well, not exactly.

If I am out driving my car, and it breaks down, I can call the AAA motor club, and they will provide me with road service at no additional charge over and above my membership (or premium). They will tow the car, fix a flat, jump the battery; any number of things. If I need a new tire I'll have to pay for it, but the service is free. If I am riding in my friend's car, and he has a flat, I can call my AAA motor club and get exactly the same service. Even though it's not my car.

Insurance policies are different. They require us to name the people who will drive our car. We pay an additional charge for each name we add to the list. If there is an accident, and someone was driving who is not on the list, the insurance company will not pay. Wait a minute-- if it's the car that's insured, what difference does it make who's driving? It matters, because that's what the policy says.

If you have more than one car, you must insure them all. When was the last time you tried to drive more than one car at the same time?

Let's say you have two cars, both insured, and you are the only one who drives them. While you are driving the first, the insurance company is at-risk that you... uh, sorry, the car will hurt someone or break something. All the while, your second car is sitting at home, minding its own business, oblivious that it is insured against the impossible-- causing a damage or injury with no one behind the wheel. You pay the insurance company for this service, during which time their risk is zero. The insurance company makes twice the money for half the risk. Pretty good odds, huh?

If you have an accident while you are out in your first car, the insurance company will pay according to the policy. Later, when your premium cost inevitably goes up because of the accident, you will only be paying more for your first car, right? The one involved in the accident? No. We all know your premium will go up for all the cars you own and insure.

So what is really insured, the car, or you?

All evidence points to it: insurance policies really insure people, not cars. Then why must we buy insurance for every car we own, when we can only drive one at a time?

Money. That, and the fact that we've all been gullible enough to do it. Not only that, we've been gullible enough to allow the law to force us to do it. We are victims of criminal fraud.

A more honest system would be to insure the person (man, woman, corporate entity), regardless of what car he is driving. The insurance company would still get to spread their risk, as there would be plenty of times when several people, all with their own insurance, would be riding as passengers in someone else's car. This way, liability would be placed where it should be-- with the driver.

Policies could still be purchased for cars, if the owner desired, for replacement value, or liability from equipment failure. Premiums would likely be much lower.

Freedom to Contract

Mandatory insurance conveniently ignores a man's free right to contract. In the first paragraph of Article 1, Section 10 of the Constitution for the united States of America, it says in part,

"No State shall... pass any... Law impairing the Obligation of Contracts..."

The right to contract is identical with the right to not contract. Whenever someone says I "must sign here," my first instinct is to say "If I must sign, then why do you need my signature? Just do to me whatever you think you can do, but let's not pretend I agree to this."


As I've already outlined above, the insurance companies are conspirators in criminal fraud. Mandating we buy their product is no different than forcing us to participate in organized crime. It's a protection racket. But there are more important issues at stake.

We are forced to purchase insurance if we want to operate a car on the public roads. If we are found to be traveling without insurance, we will be fined, and if we don't pay the fine we will go to jail. But what if we have a claim, and the insurance company is unable to pay? Are they fined? Do their stockholders go to jail? No, instead they are offered protection under the Federal Bankruptcy laws. In such circumstances, policy holders with claims may be paid pennies on the dollar, or not at all. I once knew a man who had been ticketed for no insurance. He made an offer to the judge:

"Your honor, I hereby offer to purchase insurance as you have directed, on the condition that you will personally indemnify me against the full amount of the policy, in the event I have a claim, and the insurance company should default on their obligations."

After thinking on it a bit, the judge dismissed the case. This was a few years ago, and your mileage may vary.


Speaking of years ago, from the very beginning in this country, common rights-of-way have been provided for the purpose of freedom of travel. It was recognized that people must have food and other supplies, and must have a means of earning a living. Therefore they must be able to travel. To deprive them of the right to travel is to take their livelihood, and even their lives.

At the time, most people lived closer to trade centers, blacksmiths, and other tradesmen, simply because travel was more difficult. But even then, stealing a man's horse was a crime often punishable by death. This was no arbitrary punishment. It was well recognized that without his horse, a man might not be able to travel to where he could obtain food, shelter, and security. A man could die without his horse, so the punishment fit the crime.

These days, principally because of the automobile, people have spread out. Although thanks to the automobile people spend less time traveling than in the past, still, they must travel farther distances to get what they need. Take away a man's car, or his right to use it, and you take away his ability to hold down a job. He can't get to a grocery store to buy food, even if he had money, which he doesn't because he has no work. Without money he will soon lose his shelter, and everything that goes with it.

When government requires a man to have a license to travel; pay a fee for the privilege; registers and taxes his means of travel, and forces him to contract with others against his will-- or else to give up his right to travel-- then that government has seized that man's very life. That government now controls whether the man prospers, or fails; lives, or dies. If they do it to one man, it amounts to murder. And if they do it to all their citizen / subjects? Call it genocide, because that's what it is. Such a government is no better than a horsethief, and deserves the same end.

In Conclusion

I would have no problem with insurance companies, if they would return to honest business practices.

Like it or not, a man has the God-given right of self-determination. He cannot be lawfully forced to purchase insurance. He has the right to refuse. That is not to say he has the right to damage others without compensation. If he does not choose to purchase insurance, then he puts all his property, and even his freedom at risk. That is an issue best reserved for a later date.

America has now handed their healthcare system over to these same petty criminals. The result will be higher prices, and scarcity of services. People, on the average, will get less healthcare not more; worse treatment not better. In open discussions between government and insurance executives, they have already begun discussing death panels. Call it genocide, because that's what it is.

Americans are becoming professional victims, and it will only get worse until they learn to stand up. Are you ready to stand up yet?

(Isaiah 33:22) For the Lord is our judge, the Lord is our lawgiver, the Lord is our king; he will save us.

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Copyright 1996, 2014, by Gregory Allan; All rights reserved.