A Pennsylvania group, supported by the insurance industry, is predicting that the number of uninsured motorists will increase by 2010. In a study released by the Insurance Research Council, the fall in the economy and the unemployment rate increasing has begun to effect then number of uninsured drivers on the road. This could lead to more expensive accidents.
The dangers of uninsured motorists
Many are opting to drop all of their coverage or scaling back to the minimum protection. This is dangerous. If you are a driver and scale your coverage down and do not purchase uninsured/underinsured motorist coverage, you could be in trouble. With minimum coverage, you may not be protecting yourself and your family. If you are in an accident caused by another party, get hurt, damage your car and the other driver doesn't have insurance, you may not be adequately compensated for your injuries. Hospital and doctor bills along with lost wages and car repairs can add up quickly. With adequate coverage, including uninsured/underinsured motorist coverage, under that same scenario, in most circumstances, you would not have to pay money out of your own pocket.
Related: Is The Insurance Company Really My Friend?
Dropping your insurance
The problem of decreasing and dropping coverage is its financial ripple effect. Insurance providers are forced to cover more damage caused by uninsured drivers. This causes rates to go up. The increase in rates may cause drivers to lessen their coverage putting them at risk for financial hardship if they are in an accident. The Property Casualty Insurers Association of America created a list of ways to keep insurance costs down. These include:
- No Pay/No Play – An approach that provides an incentive to purchase insurance is simple: either motorists obtain automobile liability insurance coverage or they lose the right to sue for non-economic damages.
- Mandatory Fines for Driving without Insurance – In many states, the fines for driving without insurance can be lowered by a judge.
- More Efficient Enforcement – In lieu of uninsured motorist and verification database systems that can misidentify insured drivers, PCI supports enforcement measures that target drivers who are most likely to drive uninsured.
In my book, “What You Don’t know About Buying Car Insurance Can Hurt You” I have outlined the different coverages and what they really mean. I have also included a chapter that outlines questions you need to ask your car insurance agent that may give you better coverage. You want to know what your insurance will cover in the event of an accident. You don't want to think you have a certain coverage when it turns out that you don't. You can call your insurance agent for more details about your coverage.