As the New Year begins, I think it's a good time to remind people of a resolution everyone should make: to renew and review their car insurance. The Insurance Research Council has found that hundreds of thousands of drivers have dropped their insurance in the past year, mostly due to rising unemployment. I know that this may seem like a reasonable way to save money, but I have seen first-hand the problems that arise when a driver doesn't have coverage or doesn't have adequate coverage.
If you are driving without car insurance and you cause an accident, you can be sued for any of your assets. In addition, not having insurance coverage is illegal in 48 states and the District of Columbia. Finally, if you let your insurance lapse and try to restart your coverage, you will probably incur an initial 25 to 50 percent surcharge from the insurance company.
On the flipside, if you are hit by someone who doesn't have coverage, you may have to sue them for damages, and they might not have many assets. If you have uninsured or underinsured motorist coverage, however, you will be protected in this situation. These coverage options compensate policy holders and their families for injuries that occur in hit-and-run accidents and by drivers without insurance. In about 20 states this coverage is mandatory, and in the rest, like Pennsylvania, it is optional.
Another car insurance option you should examine is Full Tort coverage. Our law firm's website offers a detailed explanation of the difference between Limited and Full Tort coverage, but essentially, if you choose Limited Tort, you give up your right to sue for pain and suffering if you are injured in a car accident. And in many cases, adding Full Tort coverage will only increase your premium by a few dollars a month.
I can't stress enough how important car insurance is. While you may think you're saving money by reducing or eliminating your premium, having good coverage can save you hundreds of thousands of dollars if you are involved in an accident.