Smart Auto Insurance Blog

According to the Estrella Insurance website, uninsured motorist coverage protects you for bodily injuries made to you and your family members as well as certain others in the case of the other driver not having insurance.  It covers you when the at-fault driver has no liability insurance, or liability coverage with inadequate limits to cover the damage to you. 

Some states require this type of coverage, but many do not.  It’s normally relatively inexpensive to add this type of coverage to your policy and many specialists say that it’s very important to have, especially during these tough economic times where many do not have insurance, or have low coverage insurance policies.  If someone hits your car and legally is responsible for the damage but has no insurance, or inadequate insurance, you may get no money and will have to pay out of pocket if you are not protected under your own auto insurance policy. Get an Estrella Insurance quote and see if this coverage is for you.

A new study estimates that one in five drivers go without Tennessee auto insurance, and that the rate of uninsured motorists is set to rise. The Chatanooga Times Free Press’  Brian Lazemby writes that increasing joblessness in the state is to blame for the expected increase, as unemployed people have to choose between paying their auto insurance premiums and covering the cost of essentials like food and housing. Even more uninsured drivers could be on the road, if you count drivers from other states passing through Tennessee. 

While times are tough, the jump in uninsured drivers makes it even more important that you have auto insurance with uninsured motorist coverage. You can get auto insurance quotes to find an inexpensive policy you can afford, so you don’t drive without insurance.

Carla Castano from KXAN Austin recently reported on a new trend: police are pulling over drivers, and towing their cars if they lack Texas auto insurance. The ordinance came into effect last week in Dallas. Reportedly, Austin is planning to consider a similar ordinance. Texas’ Auto Insurance Verification Program, run by the state’s Department of Public Safety, is able to run a person’s license plate in order to tell if they have liability insurance.

These new laws may result in more defensive driving by the uninsured to avoid being pulled over in the first place, predicts Carla. Even though it already costs about $250 to pay a ticket for driving without insurance in Austin, almost a quarter of the population was still driving uninsured.

Insured drivers may need to have uninsured motorist coverage to protect themselves. The economy is making more drivers forgo car insurance in favor of other essential needs. Unfortunately, uninsured drivers often lead to higher auto insurance premiums for everyone; often, they also have to pay penalties once they reinstate their insurance. 

(Photo credit: qthrul under CC 2.0)

Today, I read a new article in the Wall Street Journal about the increase in uninsured motorists over the past few months. M.P McQueen reports that a recent survey by the Insurance Research Council found that several hundred thousand Americans have dropped their auto insurance over the past year, and that a 1% increase in the unemployment rate results in a 0.5% increase in the number of uninsured drivers.

Experts blame this issue on a perfect storm of higher unemployment and higher premiums hitting consumers at once. The U.S. Labor Department’s consumer price index indicates that auto insurance premiums have increased 3.8% over the past year. While I can’t blame drivers for trying to save money on auto insurance, dropping your insurance isn’t a good way to do it. Not only is driving with insurance illegal in 48 states and Washington, D.C.; but in the event of an accident, all of your assets could be wiped out in court. Also, you can be penalized with a 25-50% increase in premiums when you decide to buy auto insurance again.

A lot of people who have kept their auto insurance have downgraded to the bare minimum coverage, which may not be enough. If you get in an accident with an uninsured driver, uninsured motorist insurance will protect you and compensate your medical expenses. 20 states currently require this type of insurance by law; drivers in other states who don’t have this coverage would have to sue for compensation. Most uninsured drivers don’t have a lot of assets, so you’d be very unlikely to recoup any catastrophic medical expenses. Although uninsured and underinsured motorist coverage adds from 7% to 9% to your insurance premium, the increase in uninsured drivers on the road could make it valuable for drivers in every state.

Find out if your state auto insurance requirements include uninsured motorist coverage.