There has been an interesting yet unfortunate phenomenon that has been on the rise ever since the dawn of the recession. The number of uninsured motorists on the road has seen a steady increase. This is indicated by the increasing number of Uninsured Motorist insurance claims that have been surfacing. However, it took a while for the reason to be found out. The Insurance Research Council, in its report based on its study on the frequency of Uninsured Motorists insurance claims versus Bodily Injury insurance claims, claimed that the result showed a phenomenal increase in the former, and pointed towards the ongoing recession as the culprit.
One motorist among seven in the US was found to be uninsured in studies done by the Insurance Research Council. The number of uninsured motorists was showing a declining trend until 2008 when it sharply rose to 14.3 per cent and declined by a small amount to 13.8 per cent the following year. This trend coincided with the sharp recession and it has been proved that it is, indeed, recession that is the cause this increase in uninsured motorists.
The Culprit – Economic Recession?
The increasing number of uninsured motorists on the road is a by-product of the economic turn down and shows how everybody was affected by it. Apart from the serious miscarriage of law, which requires everybody to have a minimum level of insurance, the accidents by an uninsured motorist can lead to a lot of costs for him. IRC conducts timely and reliable research into matters affecting insurance companies and their customers and provides these results to all those involved in public policy issues related to insurance. IRC bases its results on its estimation of percentage of uninsured motorists across the country as well as in individual states. It does this by computing the ratio of frequency of Uninsured Motorist (UM) insurance claims to the frequency of Bodily Injury (BI) insurance claims. The former claims are made by those who have been injured in accidents in which the uninsured drivers are at fault while the latter claims are made by those injured in accidents in which the insured drivers are at fault.
IRC had previously anticipated a decline in the number of uninsured motorists. This anticipated decrease in the percentage of uninsured motorists across the country was based on historical relationship between the unemployment rate and the UM insurance claims to BI insurance claims ration. However, the recession which fell upon the country made this prediction invalid. The strength of this historical relationship was weakened by the economical factors affecting the country. The country saw a rise in the number of uninsured motorists as opposed to the predicted decrease.
The Insurance Research Council calculates the percentage of uninsured motorists in each state. As of 2009, the highest percentage of uninsured motorists were found in the states of Mississippi, new Mexico, Tennessee, Oklahoma and Florida and the lowest in the states of Massachusetts, Maine, New York, Pennsylvania and Vermont.
Latest posts by Raphael Locsin (see all)
- How Credit Affects Homeownership - August 1, 2016
- New Business Restrictions: Santa Clarita Fire - July 26, 2016
- 5 Things to Know Before Signing a Rental Agreement - July 16, 2016