The Expert Podcast

Okay, even though 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 uninsured motorist.

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 uninsured motorist.

It's much more important now than it was even five years ago. 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 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.

So make sure that that 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 it, 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 uninsured motorist because if somebody crashes into you without insurance, that's going to be a big deal.