Car insurance in America is too cheap
Car insurance minimums in much of the United States are so low that serious crashes routinely exhaust coverage, leaving victims and health insurers to absorb six‑figure medical bills. Commenters argue this isn’t just an auto‑insurance problem but a symptom of wider structural issues: extremely high healthcare costs, weak enforcement against uninsured drivers, lax driving standards, and vehicle design that makes modern crashes more severe. Many advocate sharply higher mandatory liability limits and broader use of uninsured/underinsured and umbrella coverage, while others warn that raising premiums without addressing healthcare and transport policy will further punish low‑income drivers.
Root cause: health costs vs auto coverage
- Many argue the “too cheap” framing misplaces blame; the core problem is extremely high U.S. medical costs and legal judgments, not low premiums.
- Others note that even in countries with cheaper healthcare (Europe, NZ, Canada) mandatory auto liability limits are much higher (often in the millions or effectively unlimited), so U.S. minimums are clearly low by comparison.
- Several point out that higher policy limits don’t automatically mean higher payouts; most claims are small, so the marginal cost of extra coverage is low.
Minimum limits, uninsured drivers, and regressivity
- Common view: state minimum liability limits (e.g., $15k–$50k) are obsolete and inadequate for serious injuries or deaths.
- Counterpoint: raising mandatory limits would make insurance unaffordable for poorer drivers, increasing the already high rate of uninsured/underinsured drivers and hit‑and‑runs.
- Many describe the concept of “judgment‑proof” drivers: people with no seizable assets, so suing them after a crash is usually futile.
Uninsured/underinsured & umbrella coverage
- Strong consensus: max out uninsured/underinsured motorist (UM/UIM) coverage; hit‑and‑runs and uninsured drivers are common.
- Numerous anecdotes of umbrella policies (often $1–5M) being relatively cheap “on top” of auto and home, and of liability limit increases costing only a few extra dollars per month.
- Some confusion and discussion about when health insurance pays vs. auto liability vs. UM/UIM, and about health insurers subrogating against auto policies.
Pricing, regulation, and market dynamics
- Multiple commenters note that insurers in many states (especially California) face political constraints on rate hikes and profit, leading to delayed approvals, soft‑market underpricing pre‑COVID, then sharp losses and pullbacks or delays in writing new policies.
- There is debate over price caps vs. profit caps, and how regulation, lack of competition, and vertical integration in healthcare can all distort incentives.
Driving risk trends and structural issues
- Many perceive drivers as worse post‑COVID: more speeding, distraction (phones/video), less enforcement, and more dangerous vehicle designs (larger SUVs, bright LED lights).
- Several argue that reliance on cars itself is the underlying problem; better land use and public transit would reduce exposure to auto risk and make stricter licensing and enforcement politically feasible.