Importance of Insurance Stressed


Insurance specialists have expressed alarm over the rising cases of uninsured drivers across the U.S. With the recession still enveloping the economy, jobs are increasingly becoming scarce. The unstable job market and rising unemployment figures are forcing many car owners to do without their car insurance. Experts warn that driving without insurance can result to serious legal consequences if the motorists are caught.

Importance of Insurance StressedRecent studies suggest that one out of seven drivers on American roads are uninsured. This is expected to rise in the next few months especially if the jobless figures remain unchanged or worsen. Experts say that there is a direct relation between the number of uninsured motorists and unemployment rates. Even with improving job numbers, analysts are cautioning against celebrating too early. They add that the economy is far from recovering its original strength before the slump set in.

Enforcement agencies across the nation are also stepping up measures to catch uninsured drivers. Some states have expressed concerns over ballooning figures with California admitting that an estimate 20 percent of its car owners currently do not have insurance. The state of New Mexico, on the other hand, posted a 29 percent rate. Even public perception about uninsured drivers have raised alarms among insurance experts. A recent survey found out that more than 40 percent of respondents believe that the number of uninsured motorists are on the climb.

Surveys are also showing record numbers of uninsured drivers by the end of the year or early next year. As a result of these findings, insurance companies are raising premiums in anticipation of more accidents and claims involving uninsured or underinsured motorists. This has caused many policyholders to express discontent over the proposed rate hikes, with many citing employment issues.

Uninsured motorists caught face varying penalties depending on state laws. For many states, however, these offenders will have to contend with costly fines, or vehicle confiscation. Aside from losing their vehicles, uninsured car owners can also have their driver’s license suspended for extended periods of time. Misdemeanor charges can also be bought up and offenders can even face jail time.

Most states require drivers to present “proof of insurance” when required by law enforcers during traffic stops. What many enforcement agencies are discovering is that there are more motorists who fail to present proof of their insurance. Worse, most of these drivers do not have any form of insurance at all.

Convicted uninsured drivers can also face hefty premiums after they are caught. Some insurers would even reject any applications if they discover that an applicant has been convicted of driving without insurance.