If the Government Ran Auto Insurance

As much as it irritates me the way that insurance companies seem to rule the world, I will grudgingly give them credit -- they operate in the realm of reality, and they respond to real-world market forces.

For example, if you are a careful driver with a long accident-free record, you get discounts and pay some of the lowest insurance rates.

If you are a mad-dog lead-foot with 8 points against your license and a couple of accidents on your record, you are in the high-risk category, and you are going to pay much higher insurance premiums that reflect the consequences of your behavior.

This is as it should be. Good behavior is rewarded. Bad behavior is penalized.

Because each driver pays a rate that reflects an accurate cost of their insurance risk, the auto insurance industry exemplifies a sustainable business model that serves the customers' needs and returns a profit to its shareholders.

This is a perfect example of free-market capitalism. It is a win-win situation that is based upon personal accountability and common sense.

If the government ever got involved in this, it would be a whole different story.

Liberal politicians would cry that it is unfair for the poor driver with the bad record to have to pay such high rates while others, who were fortunate enough to have good driving records, refused to pay their "fair share" so that everyone could have insurance at an equal cost.

So the liberals would implement a program to make all auto insurance premiums the same, regardless of the driving records of anyone in the program. This would make auto insurance "fair." Then everyone would be treated "equally." And once again, our government would have removed personal responsibility from the equation.

The results would be predictable: Insurance rates would rise for all the good drivers, while rates for bad drivers would decline to whatever mandated "average" rate the government established.

Minus the punitive disincentive of higher rates, bad drivers would become worse drivers. Good drivers would worry less about their driving records, since there was no longer any penalty for bad behavior.

Accident rates would increase. More drivers would speed. Insurance rates would have to rise to reflect the growing risk exposure of the insurance companies. Before long, EVERYONE would be paying a rate that was as high as the highest punitive rates that bad drivers used to pay under the original insurance system.

And if the government refused to let insurance companies raise their rates? Companies would begin to go out of business. Auto insurance would become more difficult to obtain.

If the government continued to smother the ability of insurance companies to make a profit, they would cease to operate, and the government would step in and become the auto-insurer for the nation.

Since a government program is NEVER as efficient as a private business, insurance costs would continue to rise. If you thought the private insurance companies (that had to compete with each other) were gouging you, wait until you have to do business with the monopoly of a government bureaucracy.

This is the problem with socialism. It sounds good. It sounds compassionate. But the results are always the same: Socialism eventually ensures that everyone is equally miserable, equally poor, and equally powerless.

Socialism turns responsible free citizens into dependent wards of the state.

That is not the kind of world I want to live in.