Bad Economy Leads to More Uninsured Drivers

As the economy sours, more drivers are abandoning their car insurance to save money.

The unemployment rate and the uninsured rate have a direct relationship, according to the Insurance Research Council. A 1% increase in unemployment is worth a half-percent increase in uninsured drivers. As of November, the unemployment rate was up 2% from last year.

In a study to be released next month, the council also says that several hundred thousand drivers have dropped their insurance or let it lapse in the past year. The last metric taken for the number of uninsured nationally was in 2006, which put it at 15% of all drivers. Expect that number to have leapt significantly for 2008.

This means your odds of being hit by an uninsured driver have risen dramatically, and, predictably, the uninsured tend to not have a lot of assets if you want to sue them for damages.

For those who can afford it, coverage for being hit by uninsured (or underinsured) drivers has become an important protection even though it adds 7% to 9% to your premium. Also, it's important to not let your insurance lapse because insurance companies tend to charge a 25% to 50% surcharge for a new policy. That’s because they consider drivers who allow their policies to do so irresponsible.

Road Risks Rise as More Drivers Drop Insurance (The Wall Street Journal)

Comments

The "good" news just keeps on coming, eh?

First we got those feathering the gas pedal in the fast lane in their quest for an extra couple of MPGs. Now we also have to deal with an increasing number of uninsured drivers with their eyes peeled for the police instead of on the road. The insanity goes on.

A while ago I was involved in a hit-and-run by a driver who was later apprehended and proved to have no insurance, so I can definitely relate to your warning.

PS: And since winter is here, how about those that skipped on car maintenance or buying new/winter tires, and are now clogging the roads?

I think under-insured drivers is just as much of a problem.

And thus, our rates for uninsured and underinsured motorist protection will increase. If I get hit by an uninsured motorist, I want their car impounded, parted out, then sold for scrap metal and that money applied to my deductible.

How come the underinsured or uninsured always drive most dangerously, too? I mean, I don't care if you don't value your own life, but don't threaten mine.

For one thing, not all underinsured/uninsured motorists are terrible, unsafe drivers - there are many people on the road who have EXCELLENT insurance that should have never even considered driving.

As someone who has had to struggle to pay bills, insurance, and other expenses, yes - insurance seems to be a little closer to the bottom of the list compared to say, food, or electricity. (For shame.)

At any rate, I bet you wouldn't be saying the same thing if you were in the same desperate situation the rest of the middle-class/middle-lower-class/proletariat is in.

And before I get any flames - yes, I do pay insurance - I got the best deal I could find with Progressive - and if I hadn't, I WOULD NOT have insurance because the rest of these companies seem to want everything but your first born. It's only because I got a six month policy before my employer decided to kick me in the ass that I even HAVE insurance - otherwise I'd be right back to square one, driving uninsured and trying to make enough to pay that and everything else off - and when you're already stretched to the limit and trying to get ANOTHER job and such, yes - food and gas and electricity DO take precedence.

I'm sorry I'm such a horrible, irresponsible person.

At any rate though, let me know if you wish - if you were practically starving and struggling with about a month behind worth of bills due to this lovely little depression we've fallen into, would you pay a bunch of people to sit in a cozy office all day and HOPE that nothing happens to you, or would you try to keep your lights on and feed your face?

I've been having serious trouble doing all three and I get out and work my ass off every day, anything I can get essentially - and I've put in about sixty applications over the past four or five weeks. Whether or not my resume is attractive, or my references solid, or even my qualifications valid, is a moot point - the point is that the American dream is dead, the time when a person could go out and work to support themselves and their families is in danger, and the most people can do when a topic like this is brought up is bash the people who are struggling the most right now.

I don't want any sympathy or any condolences or anything of the sort - I just read this column and I couldn't hold back. We have a voice, too.

Steve-O's got his priorities straight. Just drive defensively, say a prayer and in most cases you will do all right.

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Deborah

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Are you uninsured in America? You should check out the website http://UninsuredAmerica.blogspot.com - John Mayer, California

Are you uninsured in America? You should check out the website http://UninsuredAmerica.blogspot.com - John Mayer, California