This article discusses the evidence that substantial proportions of cars in the USA are uninsured or underinsured, and argues that privatising vehicle registrations might solve this problem that costs the victims of accidents at least $5000M a year. A 1989 survey estimated that 8% of US households admitted to operating at least one uninsured vehicle. As this survey relied on self-reporting, it produced an underestimate of the true proportion. A more recent survey estimated that about 20% of vehicles in Arizona are uninsured. Many other vehicles are grossly underinsured, because many US jurisdictions allow vehicles to be operated with liability coverage as low as up to $15,000 for a single victim, $30,000 for multiple victims, and $10,000 for property damage including car damage. In practice, legitimate claims by accident victims often greatly exceed these amounts. The author considers that the most coherent solution is to privatise the issuing of vehicle registrations and drivers' licences, so that companies take over this responsibility from governments. A privatisation law would state that vehicle registrations and drivers' licences would be issued by those companies, normally insurance companies, which would be willing to assume full responsibility for any damage caused by the vehicle and its driver.
Abstract