Unfortunately, the term “compulsory automobile insurance” is open to many interpretations, which has led to confusion. Although it is possible that a motorist may be required to insure his vehicle against fire, theft and collision, earthquake, or glass breaking, these types of insurance do not apply to the car. They are not directly connected to the problem that arises when an owner or operator injures or kills another person.
The controversy revolves around the meanings of “liability” or “compensation.” These two types of insurance can be diametrically opposite in certain ways. This is especially true for the injured person who seeks monetary compensation. These two types of insurance have different chances of success.
We can say that mandatory insurance is the insurance that requires car owners to pay an annual premium either to an insurance company, or to a fund that pays benefits to auto accident victims or their dependents.
If the court had any involvement in the case, fault would not be brought up. The injured person would receive compensation according to a predetermined table of benefits. A commission for automobile compensation would review each case and make awards according to the circumstances.
The whole issue of fault would thus be ignored. This is largely due to the fact that it is hard to determine fault in motor accidents and because such accidents create dependency social problems that can only be addressed by motorists collectively.
Contrary to car compensation insurance, compulsory auto liability insurance is not mandatory. It is based on the common law and doctrine of personal blame. As a condition of obtaining a license, every car owner must purchase a liability policy. The insurance company with which the driver is covered is responsible for paying any “damages” if the victim or his representative can get a verdict from a court. Thus, the policy protects the motorist within its limits.
Except for a few minor inconveniences, he is as healthy as if there had been no accident. As long as the court doesn’t give a verdict that exceeds the amount of the insurance, he will be just fine. To receive remuneration, the injured party must prevail in court. This means that the plaintiff must prove that he did not contribute to the accident and that the driver was a hundred percent at fault. The plaintiff cannot prove that he caused the accident and can therefore not receive any remuneration through the courts.
Despite the differences in the two aspects of auto insurance, the public does not see the difference. The same mistake is made in pamphlets, magazine articles, and newspaper editorials. The two principles are confusing even legislators. Unacquainted about the meanings of insurance terms, the average person who approves mandatory insurance believes he is authorizing a plan that will compensate all victims of motor vehicle accidents. When the speaker is talking about compensation insurance, the term liability insurance is frequently used. Although members of the insurance industry and others have tried to resolve this problem, most people still don’t get it.
