Concerned About Uninsured Drivers? There Are Ways to Protect Yourself

One driver out of every seven in the U.S. is believed to have no auto insurance and that has broad repercussions for the 86 percent of drivers who do, according to the Insurance Information Institute (I.I.I.)

"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," said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I.

Uninsured motorist (UM) coverage will reimburse you, a member of your family, or a designated driver for bodily injuries caused by a hit-and-run driver or an uninsured motorist. Underinsured motorist (UIM) coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. UIM coverage will also protect you if you are hit by a car as a pedestrian.

In a January 2009 study, the Insurance Research Council estimated that 14 percent of all drivers in the U.S. were uninsured in 2007, but found substantial variation among the states. The states with the highest percentage of uninsured motorists were 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 each).

While auto insurance policies with both UM and UIM coverage are available nationwide, these are optional coverages in a majority of states.

Carrying UM coverage is required by law in 20 states and the District of Columbia. The states 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 and West Virginia. The price of uninsured motorist coverage varies considerably from state to state, depending in part on the percentage of drivers who are uninsured.

Only five of the states that insist their drivers carry UM coverage also mandate the purchase of UIM coverage; they are: Connecticut, Maine, Minnesota, North Carolina and Vermont.

There are some other ways drivers can receive protection. No-fault insurance laws, which are in effect in 12 states and Puerto Rico, provide some relief from uninsured motorists because accident victims are generally able to collect benefits from their own insurance companies, regardless of whether the other party has insurance coverage. Nevertheless, even if you live in a no-fault state, UM/UIM coverage is a cost-effective purchase because the policy provision provides an additional layer of financial protection.

Moreover, if you are in an accident caused by an uninsured motorist and you do not have UM coverage, your health insurance policy will usually pay medical bills related to that car accident. However, your health insurance will not pay for lost wages if you miss work, nor will a health insurance company seek redress for pain and suffering resulting from the crash. Lost wages and pain and suffering are paid for by the liability portion of the at-fault driver's auto insurance policy. But, if the at-fault driver has no or little coverage, the victim's UM or UIM policy provisions are accessed.

Every state, with the exception of New Hampshire and Wisconsin, requires its licensed drivers to purchase an auto insurance policy; Wisconsin has enacted a law that will mandate the purchase of an auto insurance policy in June 2010.
The IRC found the states with the highest percentage of uninsured motorists two years ago were 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).

Insurance Information Institute