Slow Economy Sees Rise in Uninsured Drivers

The Wall Street Journal

More drivers own car insurance lapse because of the sour economy, putting themselves and others at risk.

Some one hundred thousand drivers dropped their insurance last year as the unemployment rate increased, the estimated study, to be delivered shortly by the Insurance Research Council, the industry-funded group.

The trend is bad news for everyone on the road. If hit by an uninsured driver, you may have to sue to recover the costs of uninsured drivers, and many have few assets. You can defend themselves by carrying uninsured-motorist coverage - almost half the states require the coverage - but may increase the premium.

Insurance Research Council the previous study, published in 2006, it was found that almost 15 percent of drivers are uninsured nationally in 2004, compared with about 13 percent in 1999.

Preliminary figures from councils show that a single percentage point increase in the unemployment rate is linked to the half-point increase in the percentage of uninsured drivers, "said David Corum Council Vice President.

Nation of unemployed was up 2 percentage points to 6.7 percent in November from the previous year. The group estimates the number of uninsured drivers on the basis of insurance claims.

Possibly adding to this problem is the fact that auto-insurance rates have increased 3.8 percent in November from a year ago, according to the Department of Labor consumer price index.

Agents say the growing numbers of customers are stripping their auto-insurance policies, with an absolute minimum level of accountability required by law to drive.

"A good proportion of people living on the road are uninsured , and so you have to defend it," said Robert Hartwig, president of the Insurance Information Institute, non-profit groups. "Your chances of being in an accident with uninsured drivers are significant."

Drivers driving without insurance may lose regardless of their assets in the sentence. Also, driving without insurance is illegal in 48 states and District of Columbia. New Hampshire and Wisconsin do not require insurance.

Drivers who allow their policies expire often have to pay an initial 25 to 50 per cent surcharge for the new policy. Insurance companies charge them more, because they consider it irresponsible: unlicensed and uninsured drivers are disproportionately involved in fatal accidents.

Without a net

A slumping economy is the introduction of more uninsured drivers on the road. Here's how to protect yourself:

Make sure that compensates for the additional insurance if you are hit by an uninsured driver.

Set your own liability insurance commensurate with the amount of assets. This amount also helps determine your limit uninsured driver coverage