Insurance Claims

The Effect of Expensive Insurance Policies to Millions of Drivers in the U.S.

According to the Insurance Research Council, an independent, nonprofit research organization, more than 29 million drivers and car owners in the U.S. continue to drive without insurance. This translates to one in every eight drivers on U.S. roads and highways. Car liability insurance is a document that drivers need to show whenever they renew their driver’s license, re-register their car, get pulled over by a traffic officer or when they cause an accident. Failure to prove that they are covered can result to suspension of their driver’s license and driving privileges and may be required by the court to file an SR-22, a certification of their purchase of a car insurance policy which, this time, will cost more expensive (the SR-22, by the way, usually lasts for three years and require an additional fee on top of the insurance premiums that drivers need to pay).

Carrying car liability insurance is mandated in all U.S. states (except in the state of New Hampshire where drivers may instead deposit securities or money with the state treasurer). If being insured is truly a mandate, however, then how is it that millions of uninsured drivers are able to renew their license and car registration?

What many of these drivers usually do is purchase a policy, but only for the purpose of re-registering their car and license. After having done these, they stop paying the premium which they consider is too costly to maintain. Auto insurance firms, on their part, will, of course, neither hesitate nor delay in canceling the coverage due to non-payment.

Well, affirming that insurance policies are expensive is not deviating from the truth. Millions of drivers and car owners are paying premiums that are actually twice as much as they need to pay. Despite the unnecessarily expensive coverage, no one from the insurance firm will voluntarily tell drivers about the possible reductions in their premium unless they ask.

Drivers and car owners, however, do not have to pay for a costly car insurance coverage and still get all their insurance needs. According to the website of Schuler, Halvorson, Weisser, Zoeller and Overbeck, P.A., free online car insurance quotes allow drivers to compare as many as a dozen quotes all at once.

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The Importance of Car Insurance

Being involved in a car accident is bad enough, but the added stress of having no or insufficient car insurance makes it worse. The main purpose of car insurance is to protect the driver from the consequences of an accident whether due to negligence or not.

Car insurance is required to drive legally in all states in the U.S. (except New Hampshire) although the requirements differ from state to state in terms of minimum amount and type of coverage. In general, third party liability (TPL) auto insurance is mandatory to operate a vehicle.  TPL coverage applies to property damage and/or bodily injury of the other vehicle and its occupants up to a prescribed maximum amount.

While most states only require TPL, 12 states and Puerto Rico have a no-fault scheme for automobile accidents which require motorists to apply to their own insurance for medical costs related to an accident. Aside from TPL, therefore, motorists are required to have Personal Injury Protection (PIP). Some states also require motorists to include Uninsured/Underinsured Motorist Coverage in case of a hit-and-run and where the at-fault uninsured driver is financially incapable of paying for the damages.

Habush Habush & Rottier S.C.® warn that uninsured, negligent drivers in most states are not only criminally liable and may see the inside of a jail but may also be sued for the medical expenses and property damages of the third party. Even when not at-fault, an uninsured motorist who sustains multiple injuries and acute emotional distress in a truck accident is generally barred from suing the other driver for non-economic damages i.e. pain and suffering.

Clearly, the importance of car insurance cannot be over-emphasized. Without coverage, the costs of property damage and bodily injury can run be very high, and may even force the driver to bankruptcy. If you or someone you know is operating vehicle without auto insurance, don’t take the risk; an accident can happen at any time, and the consequences for all involved can be grim.

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