More drivers are letting their car insurance lapse because of the sour economy, putting themselves and others at risk.
Several hundred thousand drivers dropped their insurance in the past year as the jobless rate climbed, estimates a study to be released next month by the Insurance Research Council, an industry-funded group. Online agency Insurance.com says it also is seeing evidence recently of more uninsured motorists. It says that as many as 40% of callers following up on online applications had let their previous policies lapse, up from less than 10% a couple years ago.
Associated Press
Police officers at the scene of an accident in Biloxi, Mississippi. A customer arriving for a haircut drove through the plate glass window of the barber shop.
"I am seeing a lot more canceled policies than ever, especially in the last couple of months, usually due to job loss," said Christine Williams, a licensed agent at Insurance.com's call center outside Cleveland.
The trend is bad news for everybody on the road. If you're hit by an uninsured motorist, you may have to sue to recover costs, and many uninsured motorists have few assets. You can protect yourself by carrying uninsured-motorist coverage—almost half of states require the added coverage—but this may boost your premium.
Even in good times, many Americans drive without insurance. The Insurance Research Council's previous study, released in 2006, found that nearly 15% of drivers nationally were uninsured in 2004, up from about 13% in 1999. In some states, including Mississippi, California and Arizona, roughly a quarter of drivers weren't insured.
Preliminary data from the council's forthcoming study "indicate that a single percentage point increase in the unemployment rate is associated with a half-point increase in the percentage of uninsured drivers," said David Corum, council vice president. The nation's jobless rate was up two percentage points to 6.7% in November from a year earlier. The group estimates the number of uninsured motorists based on data from insurance claims.
Possibly adding to the problem is the fact that auto-insurance rates are rising again after a couple of years of flat or declining premiums. Premiums nationally rose 3.8% in November from a year ago, according to the Labor Department's consumer price index.
Agents say a growing number of customers are stripping down their auto-insurance policies, taking the absolute minimum level of liability coverage legally required to drive in their state.
"A good proportion of people on the road are either uninsured or underinsured, and so you have to protect yourself," said Robert Hartwig, president of the Insurance Information Institute, a nonprofit group. "Your odds of being in an accident with an uninsured driver are substantial."
About 20 states require drivers to buy coverage for uninsured or underinsured motorists. The coverage compensates policy owners and their families for injuries, including if they are injured as pedestrians, caused by hit-and-run drivers and drivers without insurance. Uninsured and underinsured motorist coverage adds roughly 7% to 9% to an average auto premium, according to State Farm Mutual Automobile Insurance Co. and Allstate Corp.
Several hundred thousand drivers dropped their insurance in the past year as the jobless rate climbed, estimates a study to be released next month by the Insurance Research Council, an industry-funded group. Online agency Insurance.com says it also is seeing evidence recently of more uninsured motorists. It says that as many as 40% of callers following up on online applications had let their previous policies lapse, up from less than 10% a couple years ago.
Associated Press
Police officers at the scene of an accident in Biloxi, Mississippi. A customer arriving for a haircut drove through the plate glass window of the barber shop.
"I am seeing a lot more canceled policies than ever, especially in the last couple of months, usually due to job loss," said Christine Williams, a licensed agent at Insurance.com's call center outside Cleveland.
The trend is bad news for everybody on the road. If you're hit by an uninsured motorist, you may have to sue to recover costs, and many uninsured motorists have few assets. You can protect yourself by carrying uninsured-motorist coverage—almost half of states require the added coverage—but this may boost your premium.
Even in good times, many Americans drive without insurance. The Insurance Research Council's previous study, released in 2006, found that nearly 15% of drivers nationally were uninsured in 2004, up from about 13% in 1999. In some states, including Mississippi, California and Arizona, roughly a quarter of drivers weren't insured.
Preliminary data from the council's forthcoming study "indicate that a single percentage point increase in the unemployment rate is associated with a half-point increase in the percentage of uninsured drivers," said David Corum, council vice president. The nation's jobless rate was up two percentage points to 6.7% in November from a year earlier. The group estimates the number of uninsured motorists based on data from insurance claims.
Possibly adding to the problem is the fact that auto-insurance rates are rising again after a couple of years of flat or declining premiums. Premiums nationally rose 3.8% in November from a year ago, according to the Labor Department's consumer price index.
Agents say a growing number of customers are stripping down their auto-insurance policies, taking the absolute minimum level of liability coverage legally required to drive in their state.
"A good proportion of people on the road are either uninsured or underinsured, and so you have to protect yourself," said Robert Hartwig, president of the Insurance Information Institute, a nonprofit group. "Your odds of being in an accident with an uninsured driver are substantial."
About 20 states require drivers to buy coverage for uninsured or underinsured motorists. The coverage compensates policy owners and their families for injuries, including if they are injured as pedestrians, caused by hit-and-run drivers and drivers without insurance. Uninsured and underinsured motorist coverage adds roughly 7% to 9% to an average auto premium, according to State Farm Mutual Automobile Insurance Co. and Allstate Corp.
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