In a frail economy, families are surely looking for ways to cut costs. So drivers have downsized, changed vehicles, and tried cut their fuel budget by limiting their driving.
But there's one tempting solution that might just end up biting you hard in the end: Canceling your insurance.
More Americans this past year have been driving outside of the law. According to the Insurance Research Council's latest report, this past April, about 13.8 percent of U.S. motorists are without insurance.
And the situation could be getting worse. A survey from the National Association of Insurance Commissioners (NAIC) report, from earlier this summer, found that nearly one out of every five vehicle owners reported canceling or reducing their insurance coverage for immediate financial relief, while nearly 20 percent also reported trading in one of the household vehicles for a cheaper one, or getting ride of it completely.
But before you go cancel your policy, keep in mind that in the U.S., if you're driving uninsured, you're playing against some stacked odds. After an accident, you could have your vehicle seized, depending on the place, or you run the risk of penalties that most states structure so that they'll cost the driver a lot more than skipping out.
It's costing all of us
You're also driving up rates for everyone else. According to data from the National Association of Insurance Commissioners, uninsured motorists cost the rest of us about $10.8 billion a year (based on 2007 data), a figure that's reflected for most of us in the "uninsured motorist coverage" portion of our premium notice—and possibly due to rise because of the trend.
Massachusetts has the highest level of law-abiders (four percent), while in Mississippi—typically one of the most poverty-stricken states—more than one quarter of all drivers (28 percent) are uninsured. Maine is a close second place, while New York also has one of the lowest rates of uninsured drivers (despite being known for quite high premiums). Other states with high rates of uninsured drivers include New Mexico (26 percent), Tennessee (24%), Oklahoma (24%), and Florida (24%).
One of the key differences might simply be a paperwork check; as USA Today points out, Massachusetts requires drivers to show a proof of insurance before they can register a vehicle, while many other states only communicate the requirement for insurance.
All states except New Hampshire require drivers to carry insurance, although the type of insurance and minimum amounts vary greatly by state.
High-risk drivers: Skipping insurance is even riskier
And if you have a poor driving record (or live in a high-risk area, with a performance car, for instance) and can't find affordable coverage, there are other options. Most states run risk-pool systems, and some companies have non-standard policies with other exclusions that keep you legal and financially protected.
Curiously, Americans aren't the only ones bucking the law and driving uninsured in droves; the Telegraph today reported that in some areas of Great Britain, nearly a third of motorists are driving uninsured.
The U.S. rate of uninsured motorists fell from 2004 to 2007 and then spiked to nearly 15 percent in 2008, with the economic downturn.
For a useful state-by-state summary of how many motorists go uninsured in each state, take a look at this useful USA Today infographic.