Which type of insurance is required by law in many states?

Compulsory insurance is required by law in many states because it serves as a protection mechanism for the public and ensures that individuals carry a minimum level of coverage in certain situations. This type of insurance typically includes auto liability coverage, which guards against financial responsibility in the event of accidents. By mandating that individuals obtain this insurance, states aim to reduce the number of uninsured drivers on the road, thereby promoting greater safety and financial accountability.

In contrast, life insurance, voluntary health insurance, and general property insurance are not mandated by law. Life insurance is often viewed as a personal choice to secure financial protection for beneficiaries; voluntary health insurance provides options for medical coverage based on individual needs rather than legal requirements; and general property insurance, while important for safeguarding assets, also remains optional and subject to personal discretion and risk assessment. Therefore, the emphasis on compulsory insurance is rooted in its necessity for public safety and welfare.