DON’T Cancel This Insurance Coverage

  • June 22, 2024
  • 3 min read

Okay, even though auto insurance, your car insurance, has gone up quite a bit in the last year or two, one thing you should never, never get rid of if you have it, and always get it if you don’t have it, is what’s called UM or uninsured motorist.

Importance of Uninsured Motorist Coverage
Why is that important? It’s an optional coverage that protects you if you’re crashed into basically by somebody who does not have insurance. You may have some basic coverages on your policy for damages to your car, but you may not have the higher limits of coverage. You may not have medical coverage, you may not have other types of protection if you don’t have UM. It’s much more important now than it was even five years ago.

Increasing Number of Uninsured Drivers
Here’s why: the percentage of people who do not have car insurance is going up, partially because of how expensive it has become. Many people are just not paying their insurance bill, and their insurance gets canceled, and their registration is canceled, their license plate is canceled, but they keep driving. Also, because of the economy and inflation, and even because of the moral hazard of people’s values and honor is saying, “Well, if I can get away with not having insurance, it doesn’t affect me any. I have an old beat-up car; it’s not going to really affect my finances if I crash my car.” They don’t care about the other people that they might damage their vehicle or injure them.

High Risks of Uninsured Drivers
So, there’s been some cities that have found that 40% of the people on the road do not have car insurance. If you’re run into by one of them, or if they’re not eligible to drive, or if they have a suspended license, or even if they don’t know they’re driving somebody else’s car and they crash into you without insurance, if you don’t have uninsured motorist coverage, your out-of-pocket might be incredibly high—tens of thousands of dollars, if not more.

Keeping Uninsured Motorist Coverage
So make sure that that UM coverage is not one of the things you get rid of to try to lower your insurance bill. Usually, it’s not a lot of money, but make sure you understand what you’d be giving up and what the higher risk now is. Look, 10 years ago you might make the argument maybe you don’t need UM, but in 2024, 25, and beyond, the percentage of people that are out there driving with no insurance and also maybe driving badly is much higher, which your risk of having uncovered damages or injuries is not probably a risk you want to take on yourself. So check into the coverage if you don’t have it. Find out how much it is. If you do have it, don’t make that one of the things that you get rid of to lower your rate. Maybe look at deductibles or other factors, but don’t get rid of UM because if somebody crashes into you without insurance, that’s going to be a big deal.

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