A recent report in the Charleston (West Virginia) Daily Mail says more and more American drivers are opting to let their car insurance lapse in order to save money in this period of economic downturn.
According to Sam Belden, vice president of Insurance.com, an online insurance agency representing several different insurance companies, says that the number of uninsured motorists has doubled in the past year, nationwide.
West Virginia is no exception to this trend, falling roughly in the middle of the pack with regard to the percentage of uninsured motorists. Steve Dale, deputy commissioner of West Virginia’s Division of Motor Vehicles, says, “There are states which have higher uninsured rates and states with lower, but DMV would like to do more. It doesn’t really matter what the percentage is if you are the one that meets the driver that is uninsured.”
also says that that the number of drivers in his state whose licenses are suspended for lack of insurance has remained fairly consistently between 7,000 and 9,000 a year, and that each of them poses a risk to other drivers on the road.
But while the numbers in West Virginia are fairly constant, across the country it’s a much different story. Sam Belden says that 20% of drivers are not covered this year – as opposed to only 10% last year, and money is the primary reason why.
“Money is a little tight with people, and they decide if they need to skip on something, they’ll let their insurance lapse,” Belden told reporters. He went on to explain that this trend is directly related to the economy, and that, “…it’s exacerbated by premiums also rising over the past year. When people are squeezed the most, the insurance rates are also going up.”
On average, insurance premiums increased by 6 to 7% during 2008, and there are more increases coming in 2009.
More data is expected later this month, when the Insurance Research Council, an organization funded by the insurance industry, is due to release a study supporting the fact that several hundred thousand drivers dropped their insurance in 2008 at least in part because of the jobless rate. In addition, the study is expected to show that roughly 40% of callers who followed up on online applications in 2008 let their policies lapse – up from 10% a few years ago.
David Corum, vice president of the council, explained that the study will also reveal that a single percentage point increase in unemployment causes a half-point increase in uninsured drivers.
The last such study by the Insurance Research Council was released based on data from June, 2006, and showed that the highest rates of uninsured motorists were found in Mississippi, Alabama, and California, while West Virginia came in at around 10%, against a national average of roughly 15%.
West Virginia is one of twenty states that requires drivers to include insurance for un- and underinsured motorists as part of their policies, which increases premiums by seven to nine percent. In order to recover costs, over and above insurance, the only option is to sue an uninsured motorist.
Belden cautions that even in hard times, maintaining your car insurance is crucial, as drivers who allow policies to lapse are generally hit for a 50% surcharge for new policies. He also suggests that drivers talk to their insurance companies about switching to monthly payments, stating, “If you pay once every three months, the amount may look absurd. You can move to monthly payments to even it out.”
He also advises that some insurance companies will take partial payments from time to time, and that the worst thing you can do is not ask about your options.
also says that that the number of drivers in his state whose licenses are suspended for lack of insurance has remained fairly consistently between 7,000 and 9,000 a year, and that each of them poses a risk to other drivers on the road.
But while the numbers in West Virginia are fairly constant, across the country it’s a much different story. Sam Belden says that 20% of drivers are not covered this year – as opposed to only 10% last year, and money is the primary reason why.
“Money is a little tight with people, and they decide if they need to skip on something, they’ll let their insurance lapse,” Belden told reporters. He went on to explain that this trend is directly related to the economy, and that, “…it’s exacerbated by premiums also rising over the past year. When people are squeezed the most, the insurance rates are also going up.”
On average, insurance premiums increased by 6 to 7% during 2008, and there are more increases coming in 2009.
More data is expected later this month, when the Insurance Research Council, an organization funded by the insurance industry, is due to release a study supporting the fact that several hundred thousand drivers dropped their insurance in 2008 at least in part because of the jobless rate. In addition, the study is expected to show that roughly 40% of callers who followed up on online applications in 2008 let their policies lapse – up from 10% a few years ago.
David Corum, vice president of the council, explained that the study will also reveal that a single percentage point increase in unemployment causes a half-point increase in uninsured drivers.
The last such study by the Insurance Research Council was released based on data from June, 2006, and showed that the highest rates of uninsured motorists were found in Mississippi, Alabama, and California, while West Virginia came in at around 10%, against a national average of roughly 15%.
West Virginia is one of twenty states that requires drivers to include insurance for un- and underinsured motorists as part of their policies, which increases premiums by seven to nine percent. In order to recover costs, over and above insurance, the only option is to sue an uninsured motorist.
Belden cautions that even in hard times, maintaining your car insurance is crucial, as drivers who allow policies to lapse are generally hit for a 50% surcharge for new policies. He also suggests that drivers talk to their insurance companies about switching to monthly payments, stating, “If you pay once every three months, the amount may look absurd. You can move to monthly payments to even it out.”
He also advises that some insurance companies will take partial payments from time to time, and that the worst thing you can do is not ask about your options.
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