Casey Gerry Law Blog

As economic conditions worsen and unemployment rates soar, cash strapped consumers are making some serious cost-cutting choices.  Unfortunately, even though it is a social and legal responsibility, some consumers may opt to cut back by going without car insurance.

In fact, the estimated percentage of uninsured motorists is expected to shoot up to 16.1 this year because of the recession, according to the Insurance Research Council.

Quite simply, when people can't make ends meet, they drive without insurance. Indeed, this trend “illustrates how virtually everyone is affected by recent economic developments," said Elizabeth A. Sprinkel, Senior Vice President of the IRC, in a news release.

Tough insurance laws make it especially risky to drive uninsured in California. In fact, The California Vehicle Code requires that drivers have evidence of auto insurance if they are driving either their own car or one belonging to someone else.  Even those who own their own vehicle but do not drive it must still have auto insurance in California. A violation of this provision could result in fines up to $500.00 plus penalties, impounding of the vehicle and even suspension of one's driver's license.

Despite the strict laws, California still has the nation's seventh highest rate of uninsured drivers. Consumers should be aware that if they are in a car accident with an uninsured motorist, they run the very expensive risk of not having any medical expenses or property damages reimbursed.

How can consumers make sure they are protected -- especially in light of the surge in uninsured drivers?

It is both wise and legally responsible to have adequate uninsured (UM) and/or under-insured  (UIM) motorists coverage. UM coverage helps pay your bills if an uninsured driver strikes your car or if you're a victim of a hit-and-run, while UIM kicks in when someone else causes an accident but doesn't have enough insurance to cover all costs.  Such insurance can also cover lost wages if you have to stay home from work due to an injury. The costs of the insurance are minimal, but the benefits are huge - some states even mandate it.

The bottom line? UM/UIM coverage can help reduce the financial strain of being injured in an auto accident caused by an uninsured motorist.  And in today's erratic economic climate, this is an ever-increasing possibility!