Basic Insurance Coverage May Not Be Sufficient to Cover Expenses That Become the Insured Victim's Responsibility
INSURANCE INFORMATION INSTITUTE
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March 2008, Washington, DC - Even though the total number of non-fatal crashes declined steadily from 6.3 million to 5.9 million from 2003 to 2006, the ratio of hit-and-run accidents remained unchanged, according to the National Highway Traffic Safety Administration (NHTSA)(1). During that four-year period, one of every 8 accidents nationwide was a hit-and-run.
But there were significant regional variations. For example, with more than one million hit-and-run crashes, the South had nearly three times as many hit-and-run incidents as the Northeast (366,000) and nearly twice as many as the West (650,000), despite California having one of the highest rates of hit-and-run accidents in the nation. The Midwest ranked second nationwide with more than 835,000 reported hit-and-run incidents.
"Many drivers are unprepared for the consequences of becoming the victim of a hit-and-run crash when the other driver cannot be identified," said Steve Cox, Vice President of the Council of Better Business Bureaus. "Instead of the at-fault driver's auto insurance policy covering the victim's costs for medical expenses, vehicle repairs and a replacement rental car, it ends up being the victim's responsibility to pay the deductible, as well as all other expenses."
According to the Insurance Information Institute, a non-profit consumer education organization, consumers can protect themselves from the financial consequences of a hit-and-run accident. For example, not being able to identify the other driver is the same as being involved in an accident with an uninsured driver. But, uninsured motorist coverage, which pays for injury and damages caused by an uninsured or hit-and-run driver, is not obligatory in every state. Therefore, some insured drivers are not covered. Uninsured motorist coverage can easily be added to an auto insurance policy.
In addition, some auto insurance companies do not automatically cover the cost of a temporary replacement rental car while a car is being repaired, even if it was caused by a hit-and-run driver. Most cars are in a repair shop for two weeks after an accident. Considering that the average daily rate for a rental car is $50, it can end up costing more for a one-day rental car than for one full-year of replacement rental car coverage, which is only a couple of dollars a month.
According to the data from the NHTSA, 80 percent of hit-and-run accidents cause vehicle damage only. Therefore, the victim's largest expenses usually are for repairs and a replacement rental car.
To help insured drivers become better prepared for any type of motor vehicle accident, a Web site at http://www.wiserdrivers.com has been developed with information from the Insurance Information Institute and Council of Better Business Bureaus, both non-profit organizations. In addition to tips, the Web site encourages drivers to review their auto insurance policy annually to make sure they have adequate coverage for various types of crashes - those that are their fault, those that are not their fault, and hit-and-run.
"Many of us think that we're well prepared to deal with an accident, but people often don't take the time to read and understand their policy," says Carolyn Gorman, Vice President of the Insurance Information Institute. Most policies are very specific and provide detailed explanations about what is automatically included and what additional low cost options are available." For more details, go to What is covered by a basic auto policy?
The Council of Better Business Bureaus agrees. "Comparison shopping for price is important, but even more importantly, consumers need to ensure they have appropriate coverage because a few dollars saved in the short run can cost consumers a fortune in the end," said Cox.
About the Insurance Information Institute
The Insurance Information Institute is a non-profit, communications organization supported by the property/casualty insurance industry.
About the Council of Better Business Bureaus
The Council of Better Business Bureaus, based in Arlington, VA, is the umbrella organization for Better Business Bureaus (BBBs). The BBB system is dedicated to advancing trust between businesses and consumers in both the traditional and online marketplace. The first BBB was founded in 1912 - today, the BBB system is comprised of 129 local Better Business Bureaus (BBBs) across the US and Canada, and serves millions of consumers, nearly 400,000 small and medium business members, and several hundred national and multi-national corporations based in North America. The BBB system has grown to become the most recognized name and advocate for promoting trust in the marketplace. In support of voluntary self-regulation, consumer and business education, and service excellence, the BBB System maintains a database with reports on almost three million businesses and provided nearly 100 million instances of service to consumers and businesses in 2006. For more information on the BBB system, visit www.bbb.org.
(1) General Estimate System (GES) data is used by NHTSA for traffic safety analysis.
Editor's Note: NHTSA's GES regions are comprised of the following states:
Northeast: PA, NJ, NY, NH, VT, RI, MA, ME, CT
Midwest: OH, IN, IL, MI, WI, MN, ND, SD, NE, IA, MO, KS
South: MD, DE, DC, WV, VA, KY, TN, NC, SC, GA, FL, AL, MS, LA, AR, OK, TX
West: MT, ID, WA, OR, CA, NV, NM, AZ, UT, CO, WY, AK, HI