PUBLIC POLICY

In many countries it is compulsory to purchase auto insurance before driving on public roads. This is to protect third parties against the financial consequences of loss, damage or injury caused by a vehicle. Typically, coverage against loss of or damage to the driver's own vehicle is optional - one notable exception to this is in Saskatchewan, where SGI provides collision coverage (less a $700 deductible) as part of its basic insurance policy. In South Australia Third Party Personal insurance from the State Government Insurance Corporation (SGIC) is included in the license registration fee. Most countries relate insurance to both the car and the driver, however the degree of each varies greatly.

Source: http://en.wikipedia.org/wiki/Car_insurance