Wednesday, December 17, 2008

How Bad Are Things When You Stop Paying Insurance?

I was stunned by this article that shows the number of uninsured drivers is on the rise. I'm not sure if I'm surprised by the fact that people have cancelled their insurance, but perhaps I'm more surprised by the statistics on the number of uninsured drivers on the road.

"I am seeing a lot more canceled policies than ever, especially in the last couple of months, usually due to job loss," said Christine Williams, a licensed agent at's call center outside Cleveland.

The trend is bad news for everybody on the road. If you're hit by an uninsured motorist, you may have to sue to recover costs, and many uninsured motorists have few assets. You can protect yourself by carrying uninsured-motorist coverage -- almost half of states require the added coverage -- but this may boost your premium.

Even in good times, many Americans drive without insurance. The Insurance Research Council's previous study, released in 2006, found that nearly 15% of drivers nationally were uninsured in 2004, up from about 13% in 1999. In some states, including Mississippi, California and Arizona, roughly a quarter of drivers weren't insured."

Up to a quarter of all drivers in California or Arizona may not have insurance? How is that possible? This seems like there should be an easy fix to this problem - have insurance companies merge their data with state DMVs, if someone cancels insurance and doesn't renew they get a letter from the state asking them to surrender their plates. If the plates aren't surrendered, the police could take a break from ticketing people* to pay a visit to the car's owner and seize the plates. Uninsured motorists cost all of us money and taking them off the road is a good first step toward putting more $$$ in your pocket (well, in reality, the insurance companies would keep 99% of the savings and cut your rates by $0.82/year).

* I'm thankful for the many hardworking police that protect and serve. However, I think it is clear to anyone that has driven in NYS recently that the current budget crunch has law enforcement looking to pad budgets with a year-end ticket blitz. Remember to use that handy little cruise control button even on short trips into town.


1 comment:

Anonymous said...

There are three good websites on the effect of mandatory auto insurance on the poor (and insurance opposition to mandatory auto insurance.) (44%said said they were unable to buy food due to mand auto insurance.) (insurance industry opposition to mand auto insuance) (12 of 96 food stamp applicants said auto insurance was a reason for needing food stamps). Someday, hopefully, we can get a total of all the people forced onto food stamps due to mandatory auto insurance. Don Birkholz, Broadus, MT