Recession Has Created More Uninsured Drivers

By: Shannon Brown, Car Insurance Analyst
CheaperCarInsurance.com

The recession has had a tremendous impact on the average American over the past few years. It has created an unprecedented unemployment problem, caused people to file bankruptcy and developed more financial problems than any time in recent history.

The economic turmoil is also to blame for the rising number of uninsured drivers on the roads. According to a recent study released by the Insurance Research Council, one in six drivers today are driving without car insurance. The increase is attributed to the economy in general, as well as the rising number of unemployed Americans.

According to the Insurance Research Council, based on current unemployment rates, we can expect to see an increase in uninsured drivers from 13.8% in 2007 to 16.1% in 2010.

Who’s Affected by Uninsured Drivers

Of course, not having car insurance can create problems for the uninsured driver. Should she get into an accident, she will have no protection from car insurance to pay for medical expenses or car repairs. Without money to get her car fixed, she may be unable to drive, and therefore unable to work.

People involved in accidents with uninsured drivers are also affected. If they are the victims in the accident, they cannot rely on the other driver’s car insurance to pay for their medical and repair expenses. If they carry uninsured or underinsured motorist coverage on their policy, their own car insurance company can pay for the expenses, but filing a claim may increase their policy rate long term as a result.

Because car insurance companies have to pay more for uninsured drivers’ claims, they may have to pass their expenses on to other policyholders in the form of a policy rate increase. It’s unfair for all involved.

Concentrated Areas of Uninsured Drivers

According to the report, each state has varying numbers of uninsured drivers. The states with the highest levels are:

• Mississippi
• Florida
• Oklahoma
• New Mexico
• Alabama

And the states with the lowest number of uninsured drivers are:

• Massachusetts
• North Dakota
• Maine
• New York
• Vermont

The report did not explain why the concentration of uninsured drivers was in the states where it was. It may correlate to the state’s unemployment levels, or the higher cost for car insurance in these states.

Protect Yourself and Your Car

The best way to protect yourself when driving is to have car insurance. Also, carrying uninsured and underinsured car insurance is a way to make sure your own medical and auto repair expenses are paid for in the event you are involved in a car accident with an uninsured driver.

It’s not necessary to get the top of the line coverage on your car insurance if you can’t afford it. Buying basic coverage and cutting out unnecessary expenses, like rental car reimbursement and tow truck service can help you save money on auto insurance. You can also raise your deductible to save money on your policy. And don’t forget to ask your insurance agent about discounts you may qualify for that can reduce your rate by as much as 20%.

Also, comparing rates is the best way to find the auto insurance company that will help you get the lowest rate for car insurance. Use CheaperCarInsurance.com’s easy Quote Generator to compare car insurance rates among the top car insurance companies. With a little information, you can get instant quotes delivered to your inbox from quality providers that can help you save on car insurance.

Remember: being an uninsured driver is dangerous, not only for yourself but also for other drivers. Be smart and stay covered.

Posted: February 24, 2010