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eLearning Series:
Your Most Popular Insurance Questions
Answers For Health and Home
Insurance
( 50 articles
in this series )
Uninsured Motorist
Coverage:
Is It Really Worth It?
According to the Insurance Research Council,
approximately 15% - 17% all drivers in the United
States are uninsured. Despite all the fines and penalties they could suffer,
millions of drivers either cannot afford coverage or just do
not care about the potential consequences. This leaves the
insured drivers in a precarious position. Do they buy uninsured
motorists coverage on the off chance that one of these irresponsible
drivers will collide with them or do they simply pray it never
happens? The entire situation along with the consequences of
a wrong decision can lead to overwhelming financial burden
for the insured driver, especially for those who can barely
afford the state required insurance minimums.
So,
what can be done to decrease the number of uninsured motorists
on the road? The truth is, barring imprisonment, there is very
little that state agencies can do to enforce the minimum insurance
requirements until an accident occurs. Even then, fines and
penalties may not be enough to keep the determined uninsured
motorist off the road. U.S. states are trying, though, to do
what they can to help solve the problem.
U.S. State Responses to the Uninsured Motorist Problem
Most U.S. states have tried to address the problem of uninsured
motorists by requiring that each driver obtain a specified
minimum amount of auto insurance coverage in case he or she
is the cause of an accident that results in injury and/or damages
to another. Although every state differs in its minimum requirements,
all require three elements to the coverage: a guaranteed minimum
amount that will be paid per person, per accident; a guaranteed
minimum amount that will be paid out per accident, total; and,
a guaranteed minimum amount that will be paid out for property
damage, per accident.
For example, if you are a driver in Arizona, you must carry
insurance that will pay a guaranteed minimum of $15,000 per
person injured, with a guaranteed minimum of $30,000 total
coverage for the accident. So, if two people were injured in
an accident that you caused, and each of those people sustained
injuries that totaled $25,000, the minimum insurance would
not cover their total damages. Each would only receive $15,000.
In Arizona, the required minimum for property damage is $10,000
(on an insurance policy, the coverage limits would be shorthanded
as 15/30/10).
In addition to requiring minimum amounts of auto insurance,
most states have some sort of fine or penalty system
for those who do not adhere to the law. Arkansas, Connecticut, Delaware,
Florida, Louisiana, Pennsylvania and Rhode Island will confiscate
a first-time offender’s license plate. Alaska, Georgia, Illinois,
Indiana, Maine, Minnesota, Missouri, Nebraska, New Jersey,
New York, North Dakota, South Dakota, Texas, Utah, West Virginia,
Wisconsin and other states will suspend or revoke an offender’s
license and/or registration. Just about every state in the
union imposes some sort of fine – from $50 to over $5000.
Despite the various punishments doled out by the states, uninsured
motorists continue to roam the highways of America. State penalties
and minimum requirements help, but no state has the resources
necessary to track down every uninsured motorist on the road
today.
What Drivers Can Do to Protect Against the Uninsured Motorist
The
only real weapon a law-abiding driver has against the uninsured
motorist comes in the form of additional insurance–
the uninsured motorist coverage. This coverage will protect
the driver who is not at fault in an accident by paying for
injury and damages that would have otherwise been covered by
the uninsured driver. In more than half of the U.S. states,
this coverage is optional. The following states, however, mandate
uninsured motorist coverage: Connecticut, the District of Columbia,
Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota,
New Jersey, New York, North Dakota, Oregon, Rhode Island, South
Carolina, South Dakota, Vermont, Virginia, West Virginia and
Wisconsin. A similar coverage, underinsured motorist coverage,
is also required in some of these states. This coverage protects
the policyholder (if not the cause of an accident) by supplementing
the inadequate insurance of a driver who is at fault in an
accident.
While trying to determine whether or not uninsured motorist
coverage is really worth the cost, consider what a devastating
automobile accident could mean for you and your family. Are
you financially able to pay for the outcome of a devastating
automobile accident? Would any of your current insurance policies
help cover resulting medical costs, lost wages, etc.? If the
answer to these questions is “no”, then perhaps uninsured motorist
coverage would be worth the cost.
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SolveYourProblem.com : 2005
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