There’s a fundamental principle of law. Ignorance of the law is no defense. No matter who you are. No matter what you are doing. You are supposed to stay within the law. If you do not, you will be convicted. If it was an honest oversight, you will get a lighter punishment. Because of this, all laws must be published and available to all. You can’t punish people for not knowing the law if they can’t easily get hold of it. So, all the laws in your state are available, often online. Now it’s up to you to read those that apply to you. Take liability insurance for drivers. In all but three states, this is mandatory. How come? Well, your decision whether to drive triggers the obligation. There’s no obligation to drive. This makes it different from the health insurance policies you may be obliged to buy. But that’s a different article.

Why is liability insurance mandatory? Well, you have probably seen a lot of words attacking attorneys. They sue people. That’s their job. So, if you drive badly and this causes loss or damage to someone else, you should pay them compensation to cover their medical bills or repair their property. So every time you bend a fender, this could land you in court. Except this is not practical. There are too many cases in court as it is. So all but three states have imposed liability insurance requirements on all drivers to cover a basic minimum of the cost of repairing the damage you have caused. Should you have caused major damage, you can still be sued for the difference between the basic minimum and the actual amount of loss caused. But at least the courts are not overrun by claims against drivers.

Why is this a problem? Most of the states introduced these laws forty or fifty years ago. The minimum amounts written into the law then were significant. Now they are far too low. Cases are building up in the courts again. States are talking about increasing the mandatory minimums. But take Wisconsin as an example of the problem. This February, the state finally decided to increase the minimums for both liability and uninsured/underinsured drivers. This seemed a good idea except, if you expect insurance companies to start paying out more to satisfy each claim, the premium rates will have to rise. And that’s exactly what has happened. So now the Republicans are out to repeal the law. You will understand, they think there are more votes from drivers than from victims of drivers. The other statistic of interest is that about 14% of those driving in Wisconsin are not insured.

There’s no doubt the auto insurance liability minimums are too low. Medical and repair shop costs have been rising steeply over the last forty years. At some point, all states will have to review these minimum amounts. Perhaps the timing in Wisconsin is wrong. This is a recession. More drivers feel the pinch when the premium rates rise. But the principle of being able to compensate innocent victims is the right one. That’s one of the reasons why auto insurance has been so popular. Given Wisconsin’s political upset, it will be interesting to see when other states move on this.