The worsening recession and mounting job losses are causing an unexpected increase in uninsured motorists. Hundreds of thousands of people all over North America are canceling their car insurance or requiring the policies to lapse. One reason is the increasing unemployment rate. As people lose their income, they begin to cut back on their expenses. Tragically, one of the things that cut is their car insurance policies.
However, some drivers are just trimming their coverage, lowering their coverage to the minimum liability level that keeps them legal drivers.
Even in good times, insurance studies show that about 15% of drivers nationwide are driving without insurance. In states that have a large immigrant population, it can be as high as 25% uninsured drivers.
What happens to you if you are in an accident with an uninsured driver? If the accident is the uninsured driver's fault, you will not have his insurance to pay for your damages or injuries. Statistically, those who drive without insurance have very few assets. So, even if you file a lawsuit to recover damages, the uninsured driver is probably not collectible.
What can you do to protect yourself and your family? Make sure that your car insurance policy includes Uninsured Motorist AND Underinsured Motorist coverage. Choose the highest liability limits available through your agent. UM coverage also protects you from hit-and-run accidents and injuries if you are a pedestrian. And Underinsured Motorist coverage protects you from those drivers who have chosen minimum coverage.
If you are thinking about dropping your car insurance, know that people who allow their policies to cancel for any reason can face surcharges of 25% to 50% when they try to buy insurance again. The companies consider them to be high risk drivers, which they are!
Many states require drivers to buy Uninsured and Underinsured Motorist coverage. Driving without insurance is illegal in 48 states. Only Wisconsin and New Hampshire will allow drivers to file a financial responsibility form with the state to drive legally.