Economic Hard Times Cause Many to Go Uninsured

We have seen many expenses cut, through this economic recession. Some are justified, while other expense cuts may be detrimental to consumers. Car insurance is one of these expenses.

With rising costs for health care, food, gas and housing, many Americans feel they simply cannot afford the $500 to $1500 every six months for car insurance. Rather than breaking the bank, they cancel their policies and drive without it.

This is a dangerous situation. Not just to the driver who doesn’t have car insurance. For the other millions of drivers on the road, this driver represents an extreme hazard that can cost them time and money.

Studies show that nearly half of the drivers who cancel their car insurance policy do so for financial reasons. The number of people without car insurance has seen a steady increase since the recession began. According to the Insurance Research Council, one in six drivers may be driving without auto insurance this year.

Where the Uninsured Motorists Are

Each state has a different number of drivers who are not carrying car insurance. The states with the most uninsured drivers are:
• New Mexico
• Mississippi
• Alabama
• Oklahoma
• Florida

It is unclear why these states have the most uninsured drivers. It may be that rates are higher here, or incomes are lower. There is, however, a correlation between uninsured drivers and unemployment rates. In states where unemployment rates have been high, it is expected that the number of uninsured motorists will rise.

Who Uninsured Motorists Hurt

While not carrying car insurance may seem like a good way to save money, it can cost you much more in the long run. If you were to get into a car accident without appropriate auto insurance, you could be held responsible for medical expenses and car repairs. If you are unable to pay these, you may be sued, causing you to have to file bankruptcy. This can be devastating, even during good economic times.

Consider it from the other side. If you are the victim of a car accident, and the at-fault driver does not carry car insurance, you have to rely on your own car insurance to pay for your expenses. Should your expenses exceed what your policy covers, you have to pay out of pocket. You may have to go through the process of suing the other party, but since he likely won’t have money to pay for your expense, you will have wasted time and money and get nothing in return.

Not having car insurance is dangerous and costly.

Don’t Cancel That Policy!

If you are having difficulty making ends meet, do not cancel your auto insurance. There are ways you can cut down on your insurance costs. Ask your auto insurer if there is a bare bones policy option you can take until you can afford more coverage. Lower your coverage levels and increase your deductible to save money. If your car is older, consider taking comprehensive and collision off of it.

As soon as you are able, increase your coverage to properly protect you and your vehicle. This will keep not only you and your loved ones safe, but also other drivers on the road.