Ethical Dilemma. You teach Personal Finance at a local community college. The state in which you teach requires proof of liability insurance in order to renew your license plates. During the discussion of this topic in class, several students admit that they obtain a liability policy just prior to the renewal of their license plates and then cancel it immediately thereafter.

They do this because they know that the state has no system for following up on the cancellation of the liability policies once the license plates are issued. These students, who are out of work as a result of a local plant shutdown, indicate that they cannot afford to maintain the insurance, but they must have access to cars for transportation.

a. Discuss whether you consider the conduct of the students to be unethical.

b. How does the conduct of these students potentially impact other members of the class who maintain liability insurance on their vehicles?