Published on:

UNINSURED MOTORIST RATES PREDICTED TO INCREASE IN TOUGH ECONOMIC TIMES

Posted by Jonathan A. Barash

In a recent study, the Insurance Research Council (“IRC”) predicted that the recent economic downtown will trigger a sharp rise in the number of uninsured motorists nationwide. In its Uninsured Motorist, 2008 Edition report, IRC predicted a rise from an estimated 13.8% uninsured drivers in 2007 to 16.1% in 2010.

The report also included state-by-state comparisons of 2007 uninsured motorist rates. The highest percentage of uninsured motorists in 2007 were in New Mexico (29%), Mississippi (28%), Alabama (26%), Oklahoma (24%), and Florida (23%), while Massachusetts (1%), Maine (4%), North Dakota (5%), New York (5%), and Vermont (6%) had the lowest rates. Georgia was better than average with only 12% of its drivers uninsured.

Not surprisingly, the report found a strong correlation between the percent of uninsured motorists and unemployment rates. The predicted increase in uninsured motorists was based on current unemployment rate projections.

In a January 20, 2009 post, we reported on a recent change to uninsured/underinsured motorist coverage law in Georgia. Effective January 1, 2009, automobile insurers are now required to offer Georgia drivers the option to purchase “stackable” uninsured/underinsured motorist coverage. (Stackable coverage would mean that a UM carrier cannot set off the amount of coverage provided by the at-fault driver’s liability insurer.) In that post, we noted that although the law gave added protection to insureds that chose the stackable option, it also significantly increased the UM carrier’s risk in serious accident cases. Given the IRC’s projections that more drivers will be uninsured (and presumably also underinsured) in the near future, Georgia’s new law may have an even more profound effect.