Unemployment Likely to Cause Uninsured Driving

February 18th, 2009 by Brad C

As millions of Americans hold tight to their jobs and corporate America continuesBuying Auto Insurance During A Recession to downsize, we can all feel the ripples of the recession affecting our lives, finances and families.

In fact, as household budgets tighten and salaries shrink or disappear completely, a new study by the Insurance Research Council (IRC) shows that many people may drop their auto insurance policies altogether due to unemployment, resulting in millions more uninsured drivers hitting the road over the next year.

Uninsured motorist coverage provides a financial safety net for many drivers, their passengers and even the pedestrians they encounter while behind the wheel. In the event they’re involved in an accident with an uninsured driver, those holding this type of coverage can easily submit a loss directly to their insurance company and get reimbursed for any loss suffered.

But without uninsured motorist insurance, dealing with damage, medical bills and other types of loss can be financially and emotionally devastating.

According to the National Association of Insurance Commissioners (NAIC), the average uninsured motorist claim runs in the vicinity of $1,500 for property damage and nearly $20,000 for bodily injury. That’s enough to wipe out any family’s savings account—if they have one.

The unemployed have even fewer resources to draw on in times of need.

As the percentage of uninsured drivers is expected to stretch to 16.1 percent by 2010 as a direct result of unemployment—an increase of almost two-and-a-half percent over 2007—we can each only hope and pray we’re never touched personally by unemployment and uninsured driving.

The penalties imposed by law may not be enough to keep many drivers insured—especially when forced to choose between putting food on the table and insuring the family vehicle.

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