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Rising Risk from Uninsured Motorists
One of the lesser-known consequences of the current economic downturn is an increase in the number of uninsured drivers – and a corresponding increase in risk for insured drivers involved in a collision with someone who has too little insurance or none at all.
A recent report by the Insurance Research Council (IRC) finds a correlation between the unemployment rate and the rate of uninsured motorists. According to the IRC, every 1 percent increase in the unemployment rate brings an increase of more than three-fourths of 1 percent in the rate of uninsured drivers nationwide. Based on unemployment rate projections, that means that the number of uninsured drivers is expected to rise to more than 16 percent of all drivers by 2010.
The IRC report also says Illinois ranks in the top third of states, with 16 percent uninsured drivers; the state of Illinois questions the methods used by the IRC, and puts the number of uninsured drivers in the state much lower – at about 5 percent. The state uses random sampling, such as comparing the number of tickets given to insured and uninsured drivers, and the IRC based its rates on a comparison of the insurance claims filed by people injured by uninsured drivers and the claims filed by people injured by insured drivers. What that means is that, even if the percentage cited by the IRC is high, the IRC study clearly shows that uninsured drivers are responsible for higher claims than are insured drivers.
Additional research, from the National Association of Insurance Commissioners, shows that the average uninsured motorist claim nationwide was $1,481 for property damage and $19,650 for bodily injury in 2005, the most recent year for which statistics are available. In 2008, according to the National Highway Traffic Safety Administration, one in five pedestrian deaths was the result of a hit-and-run accident.
In addition to the increasing risk from uninsured drivers, there is risk from drivers who have not dropped their insurance altogether, but have cut their liability limits in an attempt to save money on their premiums.
So what does this mean for you? It means that you need to be especially careful to have adequate limits for uninsured and under-insured motorist coverage. If you are concerned that you might not have adequate coverage – or if you are unsure about what your coverage limits are – just give us a call at 847-572-0800 or email me at firstname.lastname@example.org.