Insurance researchers have expressed concern that the U.S. can expect to see more uninsured drivers in the coming months and years because of the volatile economy. According to a study conducted by the Insurance Research Council (IRC), more and more Americans are heading to the roads even without proper insurance protection. Worse still, the trend is expected to worsen with the unemployment rate expected to increase before the end of the year.
Experts say that the unemployment rate and the number of uninsured motorists in the U.S. have a strong correlation. Analysts have often used jobless figures to project expected numbers. Earlier this month, the federal government said that it expects to see more job losses even as the economy is starting to show signs of improvement. Economist believe that the ailing economy will take several more years before returning to its robust self.
According to Elizabeth Sprinkel, senior vice president of the IRC, the current economic environment makes it rife for car owners to cut back on expenses, including auto insurance. While most drivers think that they will be saving hundreds of dollars each month by avoiding insurance, Sprinkel and other analysts disagree. They point out that skimping on insurance will eventually place the lives of the motorists and their families at risk. If an uninsured driver gets involved in an accident, they can lose their personal assets.
Also, the higher numbers can have a significant effect on auto insurance rates. Many experts warn that more uninsured drivers on the road expose policyholders to higher risks. A higher risk would naturally mean higher premiums imposed by insurance providers. Analysts say that with more uninsured and underinsured motorists on the road, even law-abiding policyholders will have to take the brunt.
Penalties for driving without insurance vary from state to state. However, most states usually impose hefty fines to discourage future offenses. Failure to present proof of auto insurance can almost certainly mean losing the driver’s license or getting a vehicle impounded. Some states also have tougher regulations that require erring motorists to appear before court.
In many states, however, judges have the freedom to waive fees or penalties so long as the uninsured motorists purchase and maintain insurance policies. This does not however release them from any civil suits filed for damages or injuries if they were involved in an accident.
Despite the tougher laws on driving uninsured, experts believe that unless the economy turns around, the U.S. can expect to see more uninsured and underinsured motorists behind the wheel.