Auto insurance-Pay the Price

It is a hard option—car insurance or markets, school,dress or the house payment. Millions of Americans faces this conclusions each day, and rising acts of drivers are choosing to drive without insurance when finances get tight. In point of fact, the Insurance Research Council sounds out that 13.8% of drivers nationally are uninsured today, and that's projected to increase to over 16% by 2010—an increase that's directly correlated with the rise in the unemployment rate.

We think that number is even higher. Sam Belden, Insurance.com Vice chairman of Strategic Alliances, says that the number of callers without insurance has nearly doubled in recent months. "Close to 40% of callers who contacted our call center recently to follow up on an online application were uninsured. Many of these people let their policy lapse ascribable the financial crisis, because rising car insurance rates squeezed already thin budgets."

As layoffs continue, there will be more uninsurable drivers on the road, which represents a financial risk to everyone. Unfortunately, you can't avoid uninsured motorists unless you move to Massachusetts or Maine, where almost everyone buys coverage, but you can take these simple steps to protect yourself, your car and your passengers.


Don't drop UM/UIM coverage. Uninsured and Underinsured Motorists coverage (UM/UIM) is not mandatory in every state, but you should always buy it. If you're injured by a driver who's uninsured or underinsured, that person will be held personally liable for the accident—but it could take years for you to collect from them. If you have UM/UIM coverage on your policy, your insurance company will pay you and and so collect from the other driver. Car insurance you're legally required to buy protects other citizenry from you. UM/UIM protects you from other folks, which is why it's so important to have.

Buy as much coverage as you are able to afford. UM/UIM is relatively inexpensive, so consider matching your liability limits. For example, if you have Bodily Injury Liability limits of 50/100 (which means you've coverage up to $50,000 per person and $hundred thousand per accident), you should buy the same amount of UM/UIM coverage.

Get UMPD coverage if you don't have Collision coverage. Uninsured Motorists Property Damage coverage (UMPD) is available in many states but isn't always mandatory. UMPD pays for repairs to your car if it's struck by an uninsured or underinsured driver. If you drive an older car and choose not buy Collision coverage, the small extra cost of UMPD coverage will be well worth it if your car is hit by an uninsured driver. But, remember, if you cause an accident yourself, or are involved in a hit-and-run accident, UMPD does not pay—that's why you need Collision coverage.

Drive defensively especially if you live in New Mexico, Mississippi, Alabama, Oklahoma or Florida where more than 20% of all drivers are uninsured, according to the Insurance Research Council. While almost all states require car owners to buy insurance, mandatory insurance laws are not strictly enforced in every state, leading to problem states like these. The best places to drive are Massachusetts, Maine, North Dakota, New York and Vermont where the uninsured number ranges from 1% to 6%. And, if you take a Defensive Driving course, you might qualify for a discount on your car insurance.

If you're in an accident, report it ASAP. Even a relatively minor fender-bender deserves a police report (unless you're in area where law enforcement will not respond). In either case, be sure to write down the details for every car involved (driver's registration number, numberplate, and telephone number*—and ask to see an Insurance ID Card). If you don't have a police report, it will be harder to file a claim with your own company. And, law enforcement officers will check for proper insurance.