Auto Insurance

Auto insurance occupies a unique status within the U.S. economy. Consider:

  • Auto insurance is the only example of a product that most Americans are required by law to purchase, but is provided exclusively by private industry on a for-profit basis.
  • Most of the time, those who pay for the product will not have to use it.

The involuntary nature of the relationship between motorists and their insurance companies is a source of major frustration, particularly in communities where the cost of vehicle insurance exceeds the ability of residents to purchase it.

Further, there is the conflict between the insurance companies' principal mission - making money - and their responsibility to offer policies to those who must buy insurance and to pay legitimate claims.

Insurance companies make money by avoiding risks through the process of underwriting-a form of lawful discrimination. Their goal: obtain customers least likely to make claims. The same financial imperative also provides incentives for insurance companies to avoid paying claims, or at least delay claims as much as possible, creating an inherently adversarial relationship with consumers. Add the record profits achieved by the auto insurance industry in recent years, and the result is an incendiary pocketbook issue fraught with billions of dollars in consequences for both the nation's consumers and its insurance industry.

No wonder that in recent years, auto insurance has become an issue with enormous political implications. Each year elected officials throughout the nation wrestle with this complex and controversial issue. If you're mad as hell about auto insurance, you've come to the right place to learn about it, and about what you can do to stop price-gouging and other abuses by insurance companies.

More Information

History of Auto Insurance
Read a brief history of auto insurance in the United States.

California's Low Cost Auto Insurance Policy
A California law crafted by FTCR makes a low-cost automobile insurance policy available to low-income drivers in Los Angeles and San Francisco counties.

No Fault Insurance
Insurance companies oppose consumer reforms that limit their profits, premiums and abusive practice. As an alternative, they vigorously promote "no fault" auto insurance throughout the nation. Click here for FTCR's analysis of the effect of no fault on auto insurance rates and on consumer rights.

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