15 January 2005
Splitting the difference
Last year the Oklahoma legislature more than doubled the mandatory minimum auto insurance in this state: the long-standing requirement of 10/20/10 ($10,000 for a single death, $20,000 for multiple deaths, $10,000 for property damage) was increased to 25/50/25.
This perturbed Rep. Jerry Shoemake (D-Morris), who is trying to roll back the increase, at least partially. Shoemake says the increase will create a hardship on agricultural and oil interests, who are likely to own motor vehicles that are seldom operated on the public roads but aren't exempt from liability coverage. And what's more, says Shoemake, we're discouraging uninsured motorists from buying insurance by jacking up the cost.
Shoemake's alternative proposal, 15/30/15, wins no points from Mike at Okiedoke:
Using Shoemake's logic, his proposal will still increase the number of uninsured motorists. And I doubt the few bucks saved with Shoemake's new minimum coverage will make any difference to already uninsured motorists. If that were actually the case, perhaps he should be thinking about lowering the requirement to 1/2/1 and then everyone would buy insurance.
I suspect that people go without auto insurance because they figure it's an acceptable risk. In Oklahoma City, the fine for failure to produce proof of insurance is $202. If the chance of getting busted is, say, one in twenty, the expected opportunity cost of driving uninsured is barely over ten bucks. Compare that to a thousand dollars or so in annual insurance premiums, and it's something of a miracle that only twenty or thirty percent of our drivers are uninsured. And it's not likely the city will raise the fine to $20,000 to compensate, either.
This measure affects me only peripherally, since I carry more than the new legal minimum anyway, but it's still an irritant, another example of the state's tradition of trying to micromanage everything possible. (The state Constitution is huge to the point of preposterousness; for example, its Bill of Rights contains, not a mere ten, but thirty-four items.) And I have to wonder just how much of the high cost of insurance is due simply to the fact that it's required by law.Posted at 12:03 AM to Soonerland
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