Several hundred thousand drivers nationwide dropped their auto insurance in 2008 but continue to drive their cars, according to a newly released report by the Insurance Research Council (IRC), a group funded by the insurance industry. This dangerous and unlawful practice, known as "going bare," is mainly due to the economic hard times our country is going through.
The report, Uninsured Motorists, 2008 Edition, noted a "strong correlation" between the percent of uninsured motorists and unemployment: a one-percentage point increase in unemployment is associated with an increase of more than three-quarters of a percentage point in the rate of uninsured drivers. The report forecast that the current percentage of uninsured drivers in the U.S. is expected to rise from 13.7 percent in 2007 to 16.1 percent in 2010.
Carinsurance.com, which sells directly to consumers via the Internet, reported that states are also seeing increases in license and vehicle registration suspensions because of drivers with no insurance. Several states have added mandatory uninsured/underinsured coverage requirements to policies issued by companies issuing policies within their states.
Car insurance shoppers are desperately looking for ways to cut their expenses in these difficult economic times. The unfortunate fact is, "Responsible drivers who purchase insurance end up paying for injuries caused by uninsured drivers," said Elizabeth A. Sprinkel, senior vice president of the IRC.
Considering the need to pinch pennies nowadays, how can you improve your chances of getting that better deal?
It's worth your time and effort to look for the best deals. But don't stop there.
Insurance companies can also look more closely at the type of car you drive and such key factors as your credit history and occupation. Call it the "new math" of auto insurance: insurers now have the computing power to pinpoint risk and match it to specific car prices.
No driver need invite disaster by remaining underinsured or uninsured. This is an excellent time of year to find a better deal. "If you're a better driver, your rates are likely to fall," says Bob Hartwig, president of the Insurance Information Institute.
Insurance Research Council, Economic Downturn May Push Percentage of Uninsured Motorists to All-time High
Kiplinger's Personal Finance Magazine, Reprinted on MSN Money, The New Math of Car Insurance
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