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These days, many state legislatures across the country seem to be looking into ways in which they can increase the number of residents who have auto insurance, typically by striving to make coverage more affordable. However, it seems as if another way of doing so - mandating that all drivers have coverage - might not do as much as one might think to encourage this kind of action, and that is something of which insurance agents have to be aware.

Being required by state law to buy auto insurance apparently has very little impact on whether people actually do so, according to a report from the Heartland Institute. Currently, all but three of the 50 states and District of Columbia mandate that drivers have to be covered by some sort of car insurance policy, but as of 2004, nearly 15 percent of U.S. drivers still went without this type of coverage. That same year, while no states required that residents had health insurance, just 17.2 percent of people nationwide didn't have any. In fact, in 17 states nationwide, the cost of having auto insurance exceeded that of having health care coverage.

Where is the problem most pervasive?
These statistics come despite the fact that state legislatures have tried extremely hard to encourage people to buy coverage by levying potentially weighty punishments against those who do not do so, the report said. For instance, both Kentucky and Wyoming hit drivers found to be without insurance with sizable fines - $1,000 and $750, respectively - and jail time of either a year or six months. And yet, in the former state, some 12 percent of drivers still went without, and 11 percent did so in the latter. In Louisiana, drivers can have their cars impounded for failure to be insured, but nonetheless 10 percent of residents don't buy these policies.

The state with the largest number of uninsured drivers as of 2004 was Mississippi, where 26 percent of people did not have such coverage, the report said. However, at the same time both Alabama and California weren't far behind, at 25 percent.

For these reasons, insurance agents will need to do more to highlight the actual benefits of having auto insurance to drivers, beyond the fact that they are required to do so by law. If the threat of fines and jail don't entice them, the requirement won't either, meaning that this is not coverage that sells itself in all cases.

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