PEER Report #302

A REVIEW OF ISSUES RELATED TO COMPULSORY AUTOMOBILE LIABILITY INSURANCE, September 7, 1993, 18 pages

PEER addressed three issues related to compulsory automobile liability insurance:

• Can it be determined by empirical data whether compulsory liability insurance causes insurance premiums to increase? Little evidence exists to show that compulsory liability insurance drives rates up.
• Does compulsory liability insurance necessitate the creation of a large enforcement bureaucracy? Imposition of compulsory liability insurance does not require the creation of an expensive enforcement mechanism.
• What impact does compulsory insurance have on drivers in low socioeconomic groups? Persons who live at or near the poverty line must pay a high percentage of their incomes to acquire insurance.

The problems suggested by the three questions, therefore, do not constitute a sound basis for opposing compulsory liability insurance. Furthermore, Mississippi requires drivers to be financially responsible and to show either proof of insurance or post bond if they inflict damages on another as a result of careless driving. All drivers, regardless of income and resources, are legally responsible to make restitution to those they injure.

For a paper copy of this report, contact PEER by telephone at 601-359-1226 or by e-mail at reports@peer.ms.gov.