Feds: Millions Live Where Car Insurance Not Affordable

Uninsured motorists are a serious problem in North Carolina. The Insurance Research Council reports approximately 14 percent of those on the roads in this state (and 11 percent in South Carolina) drive without the state-mandated insurance. An even larger percentage only drive with the state-mandated minimum coverage, which often does not cover the full extent of injuries and losses sustained in serious car accidents.driver

Now, the Federal Insurance Office, a branch of the U.S. Department of Treasury, has released a report showing millions of Americans live in areas where insurance is unaffordable. Whether insurance is affordable or not is measured by whether the cost of insurance exceeds 2 percent of household income. Congress has already recognized that minorities and low-and-moderate income people and communities are at higher risk of financial instability, and yet are often deprived of affordable, accessible consumer products. The affordability of insurance is directly related to how many people actually buy it and are covered – and that has a direct impact on all of us.

In North Carolina, state officials require $30,000 for bodily injury liability per person and $60,000 worth of bodily injury liability per accident, plus $25,000 in property damage liability. As most car accident lawyers know, this will not go far in the event of a serious crash. That’s why it’s imperative for drivers to carry uninsured/ underinsured motorist coverage. This too is required by the state (with the same minimum limits), but even this is often not enough.

It’s why we typically recommend drivers, if possible, carry more than that, to ensure their injuries and losses will be covered in the event of a car accident.

Unfortunately, even affording the minimum is tough in some areas.

Federal researchers looked at affordability within some 9,000 ZIP codes that are identified as having high levels of consumers who are “underserved” – those minority and low-to-moderate income individuals. What was discovered was that of those 9,000, auto insurance rates were not affordable in 845 of them. That’s roughly 9 percent, which equates to 19 million people.

The Consumer Federation of American noted that affordable rates were a substantial factor in economic mobility because owning and having the legal ability to drive a car allows people to have access to a wider range of employment opportunities.

Areas in which more than half the ZIP codes analyzed were underserved occurred in New York, New Jersey, Delaware, Michigan and Rhode Island.

Some insurance industry groups have taken aim at the study, arguing that it fails to look at the fact that individual driving records pay a large role in how much insurance costs an individual.

An editor with Consumer Reports told The New York Times that finding affordable insurance often means shopping around. One shouldn’t assume that their current provider is offering the best rate, and it’s typically a good idea to at least shop around on quotes every two to three years. Those who can meld an auto insurance policy with, say a homeowner insurance or renter’s policy, can often receive some type of discount. Additionally, drivers may consider that a driver’s education course can take some type of driver’s education course.

Contact the Carolina injury lawyers at the Lee Law Offices by calling 800-887-1965.

Additional Resources:

Millions Live Where Car Insurance Is Unaffordable, Study Says, Jan. 25, 2017, By Ann Carrns, The New York Times

More Blog Entries:

Hilyer v. Fortier – Default Judgment in Crash Case Reversed, Jan. 25, 2017, Charlotte Car Accident Lawyer Blog

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