Mandatory car insurance requirements exist for a reason. Most people do not have the money in savings or income required to pay major collision costs out of pocket. If they total someone else’s vehicle or put people in the hospital, they may be unable to cover those expenses, especially if they sustain injuries in the crash.
Liability car insurance helps cover the cost of other parties when someone causes a collision with major consequences for others. Unfortunately, people never know until after a crash occurs if the motorist at fault has adequate coverage or carries insurance the way that the law requires.
Many people end up struggling to cover their costs when uninsured and underinsured drivers cause collisions. People injured by uninsured and underinsured drivers often have limited options for covering their post-collision losses.
How many drivers are uninsured?
A shocking percentage of drivers do not carry the insurance required by law. According to statewide insurance claims data from 2022, approximately 16.3% of drivers do not have the policies required by state statutes. When those drivers cause collisions, other people pay the price. Frequently, collisions caused by uninsured drivers force people to use supplemental coverage from their own policies if they paid for it in advance. Without that extra coverage, they may need to file civil lawsuits.
What does it mean to be underinsured?
Plenty of people comply with state law but do not carry enough coverage to actually reimburse those affected by collisions. Current state law only requires $20,000 in property damage coverage. That may not be enough to replace a totaled vehicle, especially a newer vehicle.
The current bodily injury requirements are even more concerning. State law requires that drivers carry $25,000 in bodily injury liability coverage if a crash hurts one person. Requirement rules increase to $50,000 in situations where drivers at fault for crashes injured two or more people in a single incident.
Medical bills alone could exceed that baseline coverage requirement. Bodily injury coverage is also what helps reimburse people for lost income after a car crash injury. Many people simply carry the insurance amounts required by the state, which means that they don’t have enough to fully compensate injured people.
Reviewing insurance coverage and other possible options for compensation with a skilled legal team can be critical for those with motor vehicle collision expenses. Underinsured and uninsured drivers create financial risk for everyone on the road.
