Many drivers believe they can save money on car insurance by either skating around the duty of having a car insurance policy or by choosing a policy with minimum coverage. What those drivers do not realize is their scheme to save some cash may not outweigh the costs of a major car accident. Proper car insurance liability coverage can be the difference between having and not having a major financial disaster when bad luck strikes.
The lack of proper car insurance does not deter many drivers from getting behind the wheel. According to the Insurance Research Council, about one in seven drivers across the country do not have car insurance even though it is illegal not to have some form of car insurance in every state except one.
Drivers tend to forego car insurance when the economy is in the doldrums and when the unemployment rate is high. The states with the largest percent of uninsured motorists are Florida, New Mexico, Tennessee and Oklahoma. The percent of uninsured motorists in those states is almost 30 percent. The states with the fewest percent of uninsured drivers include Massachusetts, Maine and New York. Only 5 percent of drivers in those states do not have car insurance. The state of Colorado lies in between both extremes.
Since a significant number of drivers on the road drive without car insurance, it is crucial to have uninsured and underinsured motorist coverage as a part of your car insurance policy. If a driver does not have car insurance, then he or she is financially responsible to cover the costs of an accident by paying out of pocket. The driver at fault who does not have insurance or proper insurance may not have enough assets to cover the cost of your injuries. Uninsured and underinsured motorist coverage will protect you if you are in a car accident and the other driver cannot afford to pay.
Drivers should also have sufficient coverage to protect themselves in accidents when they make a mistake. Some drivers only purchase minimum coverage which will likely protect the driver from damage they inflict on others, but it may not also cover the damage the driver suffers in a serious car accident.
Depending on the state, drivers without car insurance can face fines from $100 to $5,000 as well as the loss of license, vehicle and assets. They can also face jail time. Drivers without adequate car insurance also face substantially more financial risk than drivers who do.