Uninsured motorists can lead to financial black holes

When a person in New York is injured in a car accident as the result of someone else’s negligence, it is often appropriate and necessary to sue the at-fault driver for damages. Depending on that driver’s insurance coverage, this can be problematic. Many people do not carry required car insurance even though they are required by law to do so. And since the average person who has no insurance can generally be expected to have little or no personal assets, this means that people who are injured in this type of situation might be left to deal with the financial fallout themselves.

In response, some states are trying to crack down on uninsured motorists. However in many cases, the fines for being caught without car insurance are less than what it would cost to have a policy. This leads people to calculate that even if they are caught, the out-of-pocket expenses would be less than having to pay for insurance.

While this might help a driver who can’t afford insurance — until an accident happens, anyway — it makes it difficult to encourage people to be insured. According to some estimates, about 14 percent of U.S. drivers are uninsured. This means that the likelihood of getting into an accident with one of them is relatively high — and few people can afford to pay huge medical bills out-of-pocket.

This is why it’s important for people who do have insurance on their car to make sure that they buy additional “Uninsured and Underinsured” insurance protection.

What this means is that in the event that you are unlucky enough to be involved in an auto accident with an uninsured driver, your own insurance company provides coverage as if they covered the uninsured driver themselves, up to the amount of coverage you have paid for.

In addition, if you are involved in an accident with a driver who has a minimum policy (in New York State it would be $25,000) and you have a $100,000 liability policy on your car, your own insurance company will pay you and/or your passengers the additional $75,000 if your injuries and expenses warrant it.

Especially if you have family that you regularly drive around in your car, it would be an important addition to your insurance that would come in handy and sometimes be urgently needed if and when this serious event came to pass.

Source: The Wall Street Journal, “Uninsured-Driver Dilemma,” Leslie Scism, Dec. 1, 2013

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