Why Not Universal Car Insurance?

. . . . An insurance industry can only work to everybody's benefit if it is operating in a free market. Insurance companies must compete for clients, while the client must bear the fiscal responsibility of his actions. Making the individual liable and responsible gives an incentive to lower costs. It logically follows that government should not interfere in the market by disallowing certain suppliers to enter or by transferring responsibility from the consumer to the state. These distortions cause shortages of coverage, making those who suffer the consequences of those distortions that much poorer.

The concept of a universal car-insurance program is absolutely silly. But it is a great illustration of why social-insurance programs inevitably fail over the long run. The built-in free-market "regulations" that ultimately benefit the consumer simply do not exist outside of a free market, because the government has effectively nullified their relevance. . . .

Full article from Mises here.

I made a blog post on the subject in 2008.