The reason for the mandate on car insurance is easy to justify. No one is forced to drive, but if all those who decide to drive carry valid insurance, the cost of insurance will be low. Should too many people drive without valid insurance, rates rise. Worse it becomes prudent to carry uninsured driver insurance. This is why the cost of insurance is significantly higher than it should be for drivers that are honest.
What should be done?
From a technology perspective, it's easy to link the databases used by insurance companies and the local Department of Motor Vehicles. Whenever anyone seeks to register a vehicle or to renew a driver's license, it should be the work of seconds to confirm whether this person has a valid policy of insurance in place. As a good example of the benefits that come from this link, the experience in Michigan points the way forward. Every year, the state DMV is required to register slightly more than seven million passenger vehicles. Up to this point, drivers have been able to present a paper certificate as evidence of a valid policy of insurance. 16% of the paper certificates presented were found to be fake in a test run for the new computer system in July. With over four thousand vehicles registrations suspended due to them having no valid insurance cover this has been a great success as a trial.
Fraud reduction should be the priority
The fake paper or card certificates are openly advertised online, e.g. on Craiglist (obviously they come with disclaimers). Some of the forgeries are quite sophisticated with the fraudsters running proper telephone lines so that if anyone calls to query the validity of the certificates, they can make reassuring noises. Others have a joke quality as if they are never intended to be used in a real world situation. But every person who does produce one, whether it's at a DMV office or the scene of an accident, is causing harm. The more people avoid paying, the more difficult it is for all the honest drivers to find cheap car insurance.
Michigan is now moving to confirm the link between all the databases. With up to 20% of all vehicles on American roads being without insurance, the use of computers to combat the fraud is essential. This should apply not only to the DMV offices around each state. There's no reason why the insurers' database should not be available to all police officers while on patrol. If you tie in the license plate reading systems with the database, the police officer would be able to pull up any uninsured vehicles on the road. The more quickly these vehicles are removed, the greater the incentive for drivers to buy the relevant insurance. Only then can everyone else expect their car insurance quotes to start falling. Is that not what we pay out police officers to do when they are out on mobile patrol?