The auto industry journalist Eric Peters raises the above interesting question on his website Eric Peters Autos:

Before the 1980s, in most states, you could legally drive without insurance - and many people did. Understandably. Insurance is expensive and if you think about it, you rarely need it. Maybe never. Why pay several hundred dollars a year (thousands, over a period of ten or twenty years) to some insurance company when the odds are very highly favorable, if you're not irresponsible or inept, that you will never be involved in anything worse than a minor fender bender? A fender bender which you could easily just pay for out of pocket - if you hadn't forked over all that money to the insurance company.

Today, we are pretty much forced to buy insurance, whether we think it's a good investment or not - and whether we're good drivers or terrible ones.

The worst part of this is because we're all forced to buy insurance, insurance costs a fortune. We are captive "customers" whose only choice is Company A or Company B - no third option to just say "no thanks" to both of them. That virtually eliminates any real pressure to tamp down costs, because, well, what are you gonna do?

Insurance companies today are as much a cartel as Big Oil - only worse, because Big Oil, at least, does give us the option of riding a bicycle or moving close to the train station and walking. You don't have to buy gas.

But you do have to buy insurance.

Again, why?

Eric Peters' answer:

the unlicensed, uninsured and often drunk as a loon illegal alien. It is a huge problem in states all over the country that have been flooded with Third World peasants who do not share the American hyper-caution about alcohol consumption and driving or respect for "the law" (remember: they are here illegally) and who often drive $800 rolling wrecks that should have gone on to better things (like recycled beer cans) years ago.

So, Captain Corona, high as a July sun, breezes through a red and plows right into your brand-new $50,000 BMW in his $800 hooptie. And he has no driver's license, let alone insurance - or more than the $5.73 change he's got in his wallet after splitting that $20 for the 12-pack he just drank before creaming you.

Of course, Brenda Walker has documented this phenomenon compellingly. But Peters makes a connection that hadn't really occurred to me:

The government, naturally, won't do a thing about him. But it'll make sure you pay through the nose to have top-flight coverage that takes the presence of him into account. Cost of doing business - charged directly to us.

I like this because it's another example of the phenomenon I wrote about last year: "Immigration Is The Viagra Of The State"—A Libertarian Case Against Immigration.

But you just can't get the Libertarian Establishment to think about the problem. There is absolutely no mention of immigration in the Cato Institute's premier educational event, scheduled for late July, "Economic Crisis, War, And The Rise of the State". It looks very worthy, yawn — but stuck in the 1970s.

Tell Cato (Ed Crane, Lider Maximo) to wake up. (Contact link over in left column of Cato site)