More Drivers Going Uninsured During Recession

Posted & filed under Car Insurance News.

According to figures assembled by the Insurance Research Council, the number of drivers who are opting to drop their automotive insurance due to tough economic times is climbing, positioning 2010 to be a record year for uninsured motorists.

Statistics indicate that in about 20 percent of all accidents involving a fatality, at least one uninsured driver is involved. The average cost in damages of those crashes is about $11,000.

Every state in the union has laws requiring some degree of automotive insurance. First offenses for driving without coverage usually carry a fine, which increases incrementally until ultimately driving privileges are rescinded.

Regaining insurance coverage under those circumstances can be difficult at best and almost always results in increased premiums, the very situation cash-strapped drivers were trying to avoid in the first place.

The same study showed that about 28 percent of drivers report taking measures to lower their insurance costs during the year, ranging from altering their policy’s terms to changing carriers.

About 1/3 of drivers who cancelled their insurance policies last year reported selling their vehicles and seeking alternate forms of transportation. Similar trends were reported for homeowners and renters insurance policies.

The IRC recommended drivers use tools available to them, including online quote comparison utilities, rather than taking the risk of driving uninsured. An accident without proper coverage can not only result in a large repair bill, but costly litigation if a fatality is involved.