When it comes to car insurance there are two extremes that are rarely used, but are important to understand in order to grasp how insurance policies are made. These two are known as the ballpark model and the Disneyland model, describing insurance coverage that relies mostly on insurers and coverage that relies mostly on individuals. As the vast majority of states adhere to an insurance philosophy somewhere in between these two options, it may seem fruitless to look at outliers. However, by understanding how system extremes work, a person can better understand the ranges in the middle.
The ballpark model, championed prior to the standard illegality of auto insurance, places the onus of insurance burdens on motorists. Under this system, predominately used in only one state currently, a lack of insurance requirements means that drivers are free to not protect themselves on the road. Without universal liability coverage, the cost of insurance for each accident can be prohibitively expensive for drivers.
On the other hand, the Disneyland model stands as the opposite to the ballpark model. According to this standard, being experimented with in another state, auto insurers take full responsibility for claims. This can make premiums higher, as insurance companies will want to cover the cost of automatic coverage. However, the costs of repairing a vehicle are significantly lower for drivers.
In the execution of the ballpark model, besides optional insurance, there are little changes to the current industry. On the other hand, the Disneyland model requires significant overhaul of the current system in order to regularize the execution of this model. Proponents of this kind of insurance argue that license plates could be privatized in order to facilitate full insurance company liability.
To learn more about insurance philosophies and how they affect you, as well as the insurance options available in your area, contact a car insurance expert.