How to Find General Auto Insurance In Your State

How to make sure insurance is available for every driver?

Many people believe that the involuntary market is principally populated by “clean risks” (people with no high risk characteristics); that it includes a disproportionate number of young drivers placed there only because of their age; that a disproportionate number of urban drivers are placed in the involuntary market; that certain occupational groups (military, students, retired people) are found in the involuntary market in disproportionately large numbers; and many people are placed in the involuntary market by insurance agents who have no access to the voluntary market.

However, a study of more than 19,000 applications for involuntary market coverage in Virginia, Florida, California, Kansas and Pennsylvania failed to substantiate any of these perceptions. The study found that, with two exceptions, the involuntary market population in these states was fairly representative of the population as a whole. The exceptions were that on average 91 percent of those in the involuntary market were high risk drivers and that people insured in the involuntary market tended to be more mobile than other people. Compare general auto insurance policies now!

Indications are that if allowed to operate without government interference, the free market would make insurance available to the vast majority of drivers. There are hundreds of auto insurance companies in America, and entering the business is not difficult for entrepreneurs who wish to do so. Wherever insurers are permitted to charge a fair, competitive price for auto insurance, they will make insurance available, because it is good business to do so.

Thus, in terms of the essential question posed in this article – how to make sure insurance is available for every driver—the answer is that if the free market is allowed to operate without undue restraint an involuntary market is needed for only a very few drivers, probably on average one percent or less of the drivers in any given state. These are the truly poor drivers.

In states where the involuntary market is large and operates at a considerable deficit, a combination of factors has contributed to the problem.

The dynamic force driving all aspects of the involuntary market problem is compulsory auto insurance. Once the legislature has passed a law requiring drivers to purchase auto insurance, they feel under an obligation to make sure auto insurance is both available and affordable to all drivers. The state then must find a way to make it available. Inevitably pressure also is brought to bear to keep auto insurance rates down. Get General Auto Insurance now.

When auto insurance rates are not allowed to rise to the point where they are commensurate with cost—a situation that often develops in states with cities built before the advent of the automobile where poor driving conditions contribute to high accident rates—the marketplace reacts in several ways. Insurers place restrictions on the amount of business they will write in the voluntary market in an effort to limit losses; the non-standard market vanishes; and both the good and not-so-good drivers are forced to obtain insurance coverage in the involuntary market. As the involuntary market swells, more pressure is exerted to keep rates “affordable.” As a result, deficits rise and increasingly drivers in the voluntary market are required to subsidize drivers in the involuntary market.

Widespread opinion in the auto insurance industry is that if involuntary markets are to be subsidized, such subsidies should be minimal, and clearly identified to policyholders. Find General Auto Insurance online.


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