In the US state of Virginia, like in most countries/states in the world, liability insurance is mandatory for (drivers of) motor vehicles. However, unlike other countries, it is allowed to drive without liability insurance by paying an Uninsured Motor Vehicle fee of $500 per year:
Uninsured Motor Vehicle Fee
The Virginia Uninsured Motor Vehicle (UMV) fee allows a motor vehicle owner to register an uninsured motor vehicle. At the time of registration, the motor vehicle owner must certify whether the vehicle is insured or uninsured.
If the vehicle is uninsured, the motor vehicle owner is required to pay to DMV a $500 uninsured motor vehicle fee in addition to normal registration fees. Payment of the $500 fee does not provide the motorist with any insurance coverage. [...]
Note that the payment is not just a penalty for being uninsured - after paying it, you are actually allowed to drive without liability insurance (though you will have to pay any accident damages yourself).
This does not make sense to me. Why would one require liability insurance, but then allow people to opt out? The goal of mandatory insurance is that accident victims get their compensation - if you allow opt-outs chances are that drivers who opt out are mostly drivers with little money or high accident risk, so precisely those where having insurance is most important.
I can understand not requiring insurance at all (based on the idea that government should not interfere), but requiring insurance and allowing an opt-out seems pointless.
So what is the rationale / background for this policy? Did any lawmaker go on record explaining the motivation?