Number of drivers without auto insurance may rise in these tough economic times
Lack of auto insurance is linked to the national unemployment rate, which is likely to increase
The rate of drivers who forego auto insurance is tied to the unemployment rate, the Insurance Research Council found, and more people may let their policies lapse as the employment picture continues to worsen.
Unemployment currently stands at 10 percent, but economists suggest that it’s likely to increase in the next few months before slowly improving. The real rate of unemployment is closer to 19 percent, New America Foundation chairman Leo Hindery, Jr. wrote recently in the Huffington Post.
The IRC’s research revealed that a one-percentage-point rise in unemployment is linked to a 75-basis-point increase in the rate of uninsured motorists. While the IRC did not find that unemployment and the uninsured rate were correlated, it’s likely that a causal relationship exists.
And, according to the group’s projections, the uninsured rate could spike in 2010. In 2007 – the year with the most recent data available – the rate of uninsured motorists was estimated at 13.8 percent. The rate could increase to 16.1 percent this year, though.
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Posted: January 20, 2010
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