As unemployment rises, so does the number of uninsured drivers in Georgia

When hard times hit, consumers often go into survival mode. For many, that means making tough decisions and possibly eliminating what at any other time would be considered essentials.

One example: car insurance.

According to the Insurance Research Council, the number of uninsured drivers rises most dramatically during economic difficulty. While Georgia’s percentage of uninsured drivers held relatively steady from 2005 at 11.9 percent to 2007 when it was 11.6 percent, that number has likely rocketed since. The results of national research show that for every 1 percent rise in unemployment, uninsured drivers rise by0.75 percent.

If that trend holds true in Georgia, where according to the Georgia Department of Labor unemployment from November 2007 to June 2010 has spiraled from 4.2 percent to 10 percent, then 15.95 percent of people on the rode are driving around with no coverage. The IRC anticipates the national average for uninsured will be 16.1 percent when its next report is released.

“There’s no doubt we’ve seen big spikes whenever there is a recession,” said Patrick Schmid, IRC director of research. “People decide in a lot of cases to either cut back or not pay. It’s not only harmful to the uninsured, but to other drivers as well.”

In fact, almost one million people were injured in Georgia in car crashes from 2000 through 2006, according to the latest Georgia Department of Transportation data. Over the seven year period, crashes resulted in 2,500 injuries on average each week.

“State law says you have to have it and if you don’t, you’re putting yourself at risk,” said David Colmans from Georgia Insurance Information Service.

Before canceling an insurance policy, drivers should consider taking steps to lower the bill:

– Increase your deductible to drive down the cost of the policy. An increase of $1,000 and you could decrease your cost by as much as 40 percent.

– Many insurance plans come with towing options. Eliminating that from your policy will make a small difference.

– If you have an older car, you may be able to drop collision or comprehensive coverage.

– If you already have suitable medical insurance, you can save by only carrying on your vehicle policy the minimum required in the state.

– Drive less. Carpooling and using public transportation will decrease the number of miles you drive. If it decreases significantly enough, let your insurance company know because your rate is based in part on how much you drive.

27 comments Add your comment

TallMom

July 29th, 2010
8:34 am

Unfortunately, if you car is financed most finance companies will not allow you to up your deductible from $500. Decreasing the number of miles you drive MAY bring your premium down a few dollars…seriously, maybe $5-$10 per YEAR. And as far as medical coverage…some health insurance companies may refuse to pay claims from a car wreck if you don’t have coverage through your insurance policy.

None of the above listed ideas are actual solutions…they don’t work for most people. The best thing to do…don’t drive a car whose insurance you can’t afford. Park it, drop insurance down to collateral coverage ONLY and take public transportation or carpool. If that’s not an option, sell the financed car, buy a cheaper car for cash and have only liability insurance.

The fact is, most people driving around without insurance don’t care that they are uninsured. they have no license, suspended license. too many traffic violations to afford insurance, extremely poor, etc…insurance is their last concern.

john

July 29th, 2010
8:46 am

TallMom:

I have to agree with you. Most of the options listed will only save you a minimal amount. However, any savings does help.

However, Rana I would correct you on one thing. The health insurance angle doesn’t really make sense. Your bodily injury limits don’t have anything to do with your health insurance. The state mandated 25,000/50,000 limits is YOUR liability if you injury someone else in an accident and you are at fault.

Rick

July 29th, 2010
8:48 am

How many illegal aliens are getting vehicle insurance? None!

mark

July 29th, 2010
9:23 am

tallmom how tall are you?

Tinytam

July 29th, 2010
9:36 am

@Rick – what’s your point? I think I missed it. What do illegals have to do with unemployment and the choice to drop car insurance?

bbb

July 29th, 2010
9:50 am

before anyone drops their insurance totally, they would be better to go to state minimums and not drive a leased or financed car with requirements like that.
and of course- shop rates every year. The old days of staying with an insurer for 20 years are over. Rates change annually in GA and your company will continue to increase your policy or keep the same rate while you car decreases in value and payout on a claim.
Health Insurance doesn’t affect liability and medical payments can be helpful in ER and back and neck centers after an accident.
With this information I feel like I need to up my UM to 100/300/50!

ATL

July 29th, 2010
9:56 am

As previously stated having good medical insurance DOES NOT justify carrying state mins. If your inclined it DOES reason you could reduce or eliminate your uninsured motorist coverage.

Remember, your liability coverage covers your liability to pay damage to other cars and medical costs + pain and suffering that you cause as a result of your actions/driving. Having state mins means they will sue you for the rest, garnish wages etc. An accident with multiple people will get very costly, especially with life changing injuries.

ATL

July 29th, 2010
9:59 am

Rana,

This is very bad info you posted. Be careful before posting stuff that is so inaccurate and could cost people in a big way. Insurance is a concept many people don’t grasp and to suggest this makes the problem worst. Please post a correct with an explanation of what liability insurance is and why the state requires it.

Gemmy The Geek

July 29th, 2010
10:04 am

Ga. has possibly the largest per capita population of illegal immigrants. Typically they pay cash for used vehicles and have no D.L. and thus no insurance. This is the major factor in Georgia’s uninsured drivers problem and has little to do with the econic situation.

GaInsurance Agent

July 29th, 2010
10:36 am

I sell auto insurance for a living. Most of what Rana said is absolutely correct. In regards to raising your comprehensive and collision deductible from 500 to 1000, it will usually save you 15%-40% per year. As far as having good health insurance, it’s worthwhile to lower or remove your medical payments coverage on your policy if you do have good health insurance. However, you can not afford to lower your liability limits on your policy to the state minimum. To be adaquetely covered, you should always carry 100/300/50 as a minimum for your liability limits.

moddyd

July 29th, 2010
10:40 am

I believe that Rana is suggesting not carrying medical payments on the policy, not lowering your liabilty insurance. At no point does she suggest that. With the headline you would expect her to at least mention raising your uninsured coverage. On to another point there may be some issue with this article entirely because unless Rana has her insurance license, she should not be giving advice on insurance matters.

Gemmy The Geek

July 29th, 2010
10:55 am

Re. her advise-She may have been quoting the Colmans guy although that matter is not clear.

desperado

July 29th, 2010
11:11 am

I am one of them. I decided it is a law I do not want to follow. So get over it.

hdhd

July 29th, 2010
11:19 am

It makes no sense at all to bump your deductible to $1000 unless you have $1000 in the bank to pay that. And most people that have $1000 in the bank can afford their car insurance. Funny how that works. Car insurance is not just some “fee” you have to pay to be able to drive, it is there to protect you.

If you have health insurance and it is an 80/20 plan you would be a fool to drop that coverage from your insurance. You know how much 20% of a ride to Grady and a night in the ICU cost. Hello Chapter 11. Not to mention the fact that if you have suitable health insurance, you probably have a good job and don’t need to be looking to save by skimping on insurance.

Rana Cash

July 29th, 2010
11:20 am

Thanks for the feedback everyone. Regarding health insurance, I’m speaking specifically about coverage for you, not the amount of liability in your policy that would come into play in the unfortunate event that someone else was injured and you’re at fault.

The primary point of this article is to point out the correlation between unemployment and the uninsured. Frightening numbers, actually. If you make changes that save you even a little money, it goes a long way for someone who is out of work.

Ellen

July 29th, 2010
11:25 am

If you have health insurance you can reduce or drop the med pay component of your car insurance.

Dekalb County taxpayer

July 29th, 2010
11:47 am

The number of illegal immigrants on the road is of huge importance to this issue. To talk about the people who have dropped their car insurance because they have lost their jobs and to ignore the issue of thousands of illegal drivers is nonsensical. Every person who drives without insurance increases the premiums paid by insured drivers. It’s just like going to the ER with your health insurance and paying a very high fee for services because the hospital is having to eat the costs incurred by all the patients who have no insurance and aren’t paying a penney.

desperado

July 29th, 2010
12:22 pm

Dekalb County taxpayer

July 29th, 2010
11:47 am
That is why I hate insurance companies. They say MY premiums is based on MY driving record. They should say it is based on how many claims we have to each month and your driving record. I am being penalized for being a good driver. I know it is distribute the wealth right. Well, I am not wealthy. Anyone associated with insurance and I know about it will never have my support. It may not mean anything except it makes me feel better.

desperado

July 29th, 2010
12:24 pm

Ellen

July 29th, 2010
11:25 am
So my dad who is a retired veteran of the armed forces should not have med on his insurance since he has tricare. Is that what you are implying?

ATL

July 29th, 2010
1:43 pm

Desperado — Thats the concept of insurance. Sharing the risk and the cost.

ATL

July 29th, 2010
1:44 pm

Guys: The article Rana wrote was very misleading. There is no state min on medical payments. The cost of med payments is a small portion of your premium and its usually only a few thousand of coverage anyways.

Gemmy The Geek

July 29th, 2010
2:01 pm

Always know your material when writing an financial advice article. D.C. Taxpayer makes a good and valid point about Rana factoring in only unemployed citizens in the increase of uninsured motorist. Anyone who is aware of problems and issues with our huge illegal immigration population knows they drive illegally with regards to licensing and lack of insurance.

TinyTam

July 29th, 2010
10:29 pm

It’s incredible that somehow illegal immigration has found it’s way into this discussion when the IRC is the source providing stats on about the recession and increased uninsured motorist. I’m not minimizing how uninsured drivers (whether here legally or illegally) impact insurance premiums but that is not what this article discusses nor intends to evaluate in my opinion.

I believe that any questions about the stats should be directed to Patrick Schmid with IRC.

Jack Booted Thug

July 30th, 2010
9:09 am

The illegal alien issue has everything to do with this article and justifiably so. Attn Illegals…Im always on the alert for you. Tracking you down and seeing that you are tossed out of this Country is my PRIME DIRECTIVE.

You illegals have cost us American citizens untold billions in uninsured motorist claims, vandalism, theft of services, forged document verifications etc. I will find you and deport you myself if needed.

BE aware illegal…Im watching!

meagain

July 30th, 2010
8:07 pm

If you are unemployed & unable to afford car insurance then your credit has also been flushed & your car insurance is based on your credit. Your credit score means more than your driving record.

An ambulance trip anywhere is around $1000 & usually you don’t spend just one night in the ICU & if you’re sick enough to be in there then you’ve probably also had an operation. So there’d be surgeons, radiologists, ER docs, labs, anesthesiologists, etc. See where I’m going.

SS

July 31st, 2010
10:56 am

I work for an insurance company, that is one suggestion that we make to the policyholders, if they have comprehensive and collision coverage on a veh over ten years old, we recommend liability, actual cash value will only be paid for the veh if it is considered a total loss. Also if you are shopping for a car, check with your insurance company first before purchasing the veh. Many people are surprised to find out how much their insurance rate will raise and then can not afford the payments. A lot of factors are determined for the premium on the vehicles, year make model, where the veh is mainly located, the number of accidents and claims in the area, how the vehicle is driven.
In Georgia, if you do not have insurance on the veh and are pulled over by the police, the driver can be arrested and the car impounded. Georgia can also suspend your drivers license and the driver would also have to pay a hefty fine. Georgia does not play when it comes to car insurance.

Ole Guy

August 3rd, 2010
1:05 am

Tinytam, Rick has simply highlighted another issue which may or may not have direct ties to the broader issue of unemployment. If one suffers financial hardship due to negligence of an uninsured driver, it matters not whether the uninsured is illegal, unemployed, or whathaveyou. The illegal issue, yet another unfortunate social price with which we must contend, is simply another reality of uninsured drivers.

SS, obviously, mere license suspension of an uninsured motorist means nothing, for the driver will simply continue practicing one illegal means of driving after another. Jail time and fines, to, have little impact. Many simply have no means of paying fines; with no real property, the violator “has nothing to loose”. Jail, for many, would probably be a tax-supported blessing…”3 hots and a cot”, medical care, etc; sooner or later, they would be released into the very same situation from which they came.

The problem, sir/mam, lies in YOUR backyard. There should be an intertwined network of communication between insurance companys and licensing authority. As a policy lapses, the license authority would issue a notice to “get with the program” and acquire/reacquire financial responsibility. I am quite certain this monumental task could be managed, in the complete absence of human intervention, with technological oversight funded through enhanced fines for moving violations.

The bottom line, sir/mam, is that YOUR industry, in concert with the appropriate licensing authority, needs to get proactive in addressing this unfortunate reality. There is absolutely no reason why anyone should be able to operate a motor vehicle beyond a grace period without the appropriate governing body being alerted. Financial responsibility should not simply be legislated and mandated…it should, and can be monitored for adherence and enforced. Those who then refuse to accept this responsibility should be dealt with in the most-severe manner reserved for hardened criminals, for that is exactly what they are. STOP CRAPPING AROUND AND GET PROACTIVE…EARN YOUR SALARY!