Drivers Should Obtain Uninsured/Underinsured Motorist Coverage to Protect Themselves Financially
INSURANCE INFORMATION INSTITUTE
NEW YORK, February 5, 2009 — To protect yourself financially against damage or injury from an uninsured (UI) or underinsured motorist (UIM), you must buy adequate amounts of UI/UIM coverage, according to the Insurance Information Institute (I.I.I.).
A new study by the Insurance Research Council (IRC) indicates that there is a strong correlation between the percentage of uninsured motorists and the unemployment rate. Based on current unemployment rate projections, the IRC forecasts that the percentage of uninsured motorists will likely rise from 13.8 percent in 2007 (latest data available) to 16.1 percent in 2010.
“Most people don’t think about the uninsured or underinsured motorist coverage portion of their auto insurance policy until they are the victim of a hit and run accident, or are involved in a crash with a driver who either does not have auto insurance or has very minimal insurance,” pointed out Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I.
Uninsured/underinsured motorist coverage provides a very important financial safety net for drivers and their passengers. It even provides protection if you are hit by a car as a pedestrian. UI/UIM coverage is one of the six basic components of a typical auto insurance policy.
“Consumers should consider purchasing the same amount of uninsured/underinsured motorist coverage that they purchase for their liability to others,” Salvatore stated. “This will help to make drivers financially whole in case they are unable to collect if they get into a crash with an at-fault driver who has little or no insurance.
Drivers who properly protect themselves with UI/UIM motorist coverage can submit the loss directly to their insurance company. Some insurers may even offer an endorsement to a policyholder’s umbrella or excess liability policy that allows the higher limits to come into play, if necessary.
According to the most recent data from the National Association of Insurance Commissioners, the average uninsured motorist coverage claim was $1,481 for property damage and $19,650 for bodily injury in 2005. The National Highway Traffic Safety Administration reported in 2008, that one in five of all pedestrian deaths were the result of a hit and run accident.
While uninsured/underinsured insurance coverage is available nationwide, it is only required by law in 21 states and the District of Columbia. These are: Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Vermont, Virginia, West Virginia and Wisconsin.
The IRC study found substantial variation among the states when assessing the number of uninsured drivers. The highest percentages in 2007 were in New Mexico (29 percent), Mississippi (28 percent) and Alabama (24 percent). The states with the lowest percentage of uninsured drivers in 2007 were Massachusetts (1 percent), Maine (4 percent) and New York and North Dakota (5 percent).
Penalties for driving without insurance include fines, which can be as high as $5,000 for a subsequent offense, to license or registration suspension or revocation. Some states impose jail time, confiscate license plates and impound vehicles.
For additional information on this subject, go to Facts and Statistics: Uninsured Motorists.
For a related audio file, go to Drivers Should Obtain Uninsured/Underinsured Motorist Coverage to Protect Themselves Financially.
For additional information about insurance, go to the I.I.I. Web site.
The I.I.I. is a nonprofit, communications organization supported by the insurance industry.