Dangers of Driving with Little Insurance

Attorney Ron Kramer explains how this can be unwise for a number of reasons.

I do know that our accident and injury law office is getting more calls from people who tell us that they themselves were driving without insurance. The problem is made worse, of course, if the person that hits them likewise had no insurance.

Why You Don’t Want to Drive Without Insurance. Driving without insurance might save you money in the short term, but is unwise for a number of reasons:

-No protection from an uninsured or underinsured motorist. In a serious crash, even if the other person has average policy limits, you will need to tap into the “under-insured” component of your own insurance. So, if you don’t have any coverage, you are in a really bad position. This situation is naturally worse if the at-fault driver was also driving without insurance.

-No coverage for medical bills, lost wages, household services. If you were hit by someone else, or even if you helped cause the crash, your own insurance will provide a minimum of $3,000 for your medical bills, $250 per week for one full year for lost wages, and $20 per day for one year if someone needs to help you with your activities of daily living.

If you don’t have health insurance and you were not insured, you may have a difficult time paying for medical bills. As a practical matter, it’s almost impossible to get into a specialist or have a special test done that has been recommended unless you pay cash for the visits. A normal “MRI” exam of your neck or back could cost in the neighborhood of $1,500. Seeing a specialist may be in the $300 range.

-It’s illegal! Of course, there are laws that require motorists to carry insurance. So, if you are pulled over and you can’t prove you have insurance, you will get a ticket. You will also have to prove to the court that you remedied the situation by going out and purchasing insurance.

-Harder to get insurance. If you have looked for car insurance in the past, you know that they will ask you if you currently have insurance.
You are seen as a bigger risk if you have been driving around without it. So, when you do voluntarily, or by “order of the court” go out and get car insurance, you can expect to pay more for it and have limited options as to who you can insure through.

Solution: Get MORE Insurance. In a world of uncertainty and increased numbers of people driving around without adequate insurance coverage, my opinion is that it is best to move toward actually buying MORE coverage.
I tell my clients that buying more coverage is actually cheap disability insurance for those crashes that can disable you or keep you from working.

About a year ago I was called to the intensive care unit of LDS Hospital to meet with the husband of a woman that had been involved in a serious car accident and who was in a coma due to a traumatic brain injury she received in the crash. It turns out the other driver who had been at fault had no insurance. The husband reported that he had only carried the Utah minimum uninsured motorist coverage of $25,000. I knew that her medical treatment and future care expenses would easily be over $500,000. After confirming that the at-fault driver had no real assets, I had to turn the case down since they didn’t need me to collect the $25,000 on their own policy. This story illustrates an important point:
It is good to be prepared and make sure you carry enough insurance to help you when unexpected actually happens.

Sample Insurance Rates Providing Additional Coverage. I consulted with a local State Farm Insurance agency and found out that the cost to double or triple your coverage doesn’t require you pay double or triple in premiums. The additional cost is actually quite modest for the extra coverage you get. To get the best rates, however, you will need to increase your deductible to $1,000.

So I asked my local State Farm agent to prepare an auto insurance quote for me and my wife, both in our forties, on a fictitious two-year old Honda minivan for the south Salt Lake County area. The first quote is for the minimum of what Utah law requires: a policy of $25,000 maximum coverage per person for bodily injury and $65,000 maximum per incident (written 25/65). I received quotes all the way up to 250/500 (the maximum they will write). I was told that at least with State Farm, that there is a 17% discount if you insure both your car and home/condo through them. These quotes do include this discount. Here are the results and the monthly payments:

Uninsured and Under-insured Coverage with $500 deductible:

25/65: $67.72

50/100: $72.64

Uninsured and Under-insured Coverage with $1,000 deductible:

100/300: $71.99

250/500: $87.21

Conclusion: In this example, by paying an extra $20 a month, or 29 percent, you can actually increase your uninsured and under-insured motorist coverage by a whopping 1,000 percent! It’s really a no-brainer that this is the thing to do to provide significantly extra coverage for yourself and your family for a relatively small up-charge.

Insurance quote provided by:

Dan Rodriguez State Farm Agency

(801) 254-4441

Ron Kramer is an accident and injury attorney at the Kramer Law Group with offices in Draper, Provo, Bountiful and St. George. You can reach him at his Salt Lake County office by calling (801) 553-8840. You can find him on the web at http://www.RonKramerLaw.com , where you can order– for FREE — the Utah Accident Book, a 90+ page resource that will help you avoid the mistakes that many make after an auto accident.

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