The whole idea of purchasing the cheapest car insurance is a two edged sword. On one side you purchase the cheapest insurance you can so you keep your premium down to a bare minimum while on the other side you get clobbered by someone carrying just the minimum amounts required by law and you have exorbitant expenses to pay due to injuries relating to an accident. You rationalize carrying just minimums since that is all the law requires but feel “put upon” by someone else using the same logic.
Extent of Problem
Heather Shyler of www.supermoney.com 2/9/19, Association for Safe International Road Travels, claims nearly 1.3 million lives are lost every year with 20 to 50 million injured or disabled. The average cost of a disabling injury caused by a crash was $78,900, while average cost of an accident involving property damage and non-disabling injuries was $8900. The U.S. alone accounts for over 37,000 fatalities and 2.35 million injuries. Car accidents cost the U.S. 230.6 billion every year, which is an average of $820 per person. With these staggering costs in mind, one can see the need for addressing the dilemma of just purchasing cheapest insurance.
We live in a society which requires some of our individual freedoms to be forfeited or curtailed for the good of the whole society. For example, there are stretches of road in the West which go for miles without a turn–no hills, no gullies, no bridges to cross, just flat land for as far as you can see. You may drive for long periods of time without seeing another driver or any other living creature. The hum of your 850 hp Corvette is whispering in your ear, “Let me show you what I got. Sit back and enjoy the ride. I was born for this day!!!” Looking in your rearview mirror and seeing no one and looking through your windshield and seeing no one, your foot slams the gas pedal to the floor and the g force nearly drives you through the driver seat. Clocking yourself at well over 140, you finally let off and join the human race again. No harm done other than your breaking the law and getting away with it.
Scene changes to downtown Seattle sitting on Interstate 5 in congested traffic your 850 hp Corvette starts talking to you again. You look in the rearview mirror and see nothing but miles of traffic behind you. Same scene in front of you and to your right, but to the left is a HOV lane. Freedom!! You yank the steering wheel to the left, punch the gas pedal and the 850 hp Corvette jumps to life; from the HOV lane cars to your right look like a picket fence. Exhilarating, but the flashing red and blue lights behind and the handcuffs brings you back to the human race.
Social and Economic Dilemma
With our mobile society we have created a social and economical dilemma. Socially, we want the freedom afforded and some of the challenges brought on by this mobility. We have agreed socially to abide by rules which are intended to keep up safe from our unbridled urges i.e., speed limits and zones, traffic control devices, etc. We have submitted to the idea that my freedoms end where your nose begins. In other words, I have no right to infringe on your wellbeing. I have no right to deprive you of life, liberty, and the pursuit of happiness. If I do, I have committed in the least a tort while in the extreme a criminal offense.
Economically, we have established laws and regulations which impose on us financial obligations when we fail to abide by these socially accepted mores. Legislation has codified financial minimums for meeting requirements of the law, and insurance companies have established premiums commensurate to minimums required with also optional amounts if a consumer desires to surpass minimums.
Cheapest Insurance Mentality
Here is where the social and economic dilemma of cheapest insurance mentality grind hard against each other.
The consumer seeing minimums meet the legal requirements and insurance companies vying for consumer dollars, aggressively advertising cheapest insurance, sets the bar way below the economic loss amounts occurring in real life.
The statistics quoted above show a huge disparity between most states’ minimums and the amounts actually incurred.
I can see why insurance companies still sell to minimums required by law because of competition, but I can’t see why legislatures which establish those minimums can remain complicit. If financial responsibility is required then it must have some blush of reality. It can’t just have a sideways glance to say the requirement is being met. Though not criminal or illegal, the states establishing these unrealistic minimums should be held complicit when a person becomes a paraplegic when injured by an uninsured or underinsured motorist. The family of that person should not have to bear the expense incurred when it was no fault of their own.
I am normally not in favor of government intervention, but when a person will not accept the consequences of his or her own action then someone who has authority to amend a problem needs to step forward and do it. Our legislators can go a long way of alleviating this social and economic issue by updating the minimums now required. Department of Insurance could play a major role in helping these elected officials determine what coverages are reasonable and equitable. If we have any social conscience then we need to pay a premium equal to the amount of potential injury we may cause. We cannot just expect someone else to pick up the slack for our ineptness.
In the meantime, you may not be able to change the purchasing habits of others, but you can protect yourself against an uninsured motorist or underinsured motorist by making sure your agent provides you with the options for purchasing those coverages, probably the best premium dollars you will ever spend. Drive and insure responsibly.