Long Island, Manhattan Accident Attorney Blog

More Drivers Are Uninsured As Recession Grows Deeper

Chances are increasing that the next fender bender you are involved
in could be with someone without car insurance. As the recession
leaves millions of workers unemployed and pressures family budgets,
one place many are cutting is their insurance coverage.

The Insurance Research Council (IRC) estimates that by next year
nearly one in six motorists may be driving without insurance. That’s 3
million more uninsured drivers than just five years ago.

For every 1 percent increase in unemployment nationwide, the
percentage of uninsured motorists increases three-quarters of a
percentage point, IRC Vice President David Corum said. That could
result in a total of 16.1 percent by next year, an all-time high. The
rate was 13.8 percent in 2007. Based on current unemployment rate
projections, the percentage of uninsured motorists is expected to rise
to 16.1 percent in 2010.

The group examined data collected from nine insurance companies,
representing approximately 50 percent of the U.S. private passenger
auto insurance market. According to the IRC, the estimates for
uninsured motorist activity were based on a ratio of insurance claims
made by individuals who were injured by uninsured drivers to claims
made by individuals who were injured by insured drivers. The study
contains recent statistics by state on uninsured motorists claim
frequency, bodily injury liability claim frequency, and the ratio of
uninsured motorists to bodily injury claim frequencies.

New York is not in as dire shape when it comes to car insurance as it
is with the economy. The Empire State is tied for the third lowest
uninsured motorist rate at 5 percent, 4 percent behind Massachusetts. New Mexico led all states with a 29 percent uninsured motorist rate.

Travelers Cos. Inc. reports that there has recently been a mild
increase in uninsured claims and warns against dropping insurance as a
way to save money. William Pearse, the St. Paul, Minnesota company’s
vice president of product strategy and design notes that it’s equally
important to carry liability insurance that covers people in the other
car and to have uninsured motorist coverage on your policy, which
protects you if the other car is not insured. The average cost for
liability insurance in the United States is about $40 to $50 a month.
Although costs can vary, uninsured motorist coverage typically adds
from 7 percent to 10 percent to an insurance premium. Drivers without
at least liability insurance are breaking the law in all but two
states.

Defective Car Cases

When attempting to show a car manufacturer or seller’s liability for
a car defect, you do not need to show that they were careless. Unlike
personal injury claims that are based on negligence, liability in car
defect cases is controlled by strict liability. Regardless of the
steps a manufacturer says it takes in creating or handling a car, you
can make a strict liability claim based on a car defect if certain
conditions are present:

1) The car had an unreasonably dangerous defect that harmed you. The
defect may arise from either the car’s design, during handling,
manufacture, shipment, or through a failure to warn consumers of a
dangerous aspect of the car.

2) An injury arose from the defect, while the car was being used properly.

3) There were no substantial alterations to the car from its
original condition when sold.

Manufacturer Defenses

The car manufacturer and the seller may have a defense to your strict
liability claims, particularly if you have owned the car for some
time, if it can be shown that you knew about the defect but continued
to use the car anyway. This can be established through either the
car’s condition or from your description of the use of your car. In
some states, a manufacturer or seller may also be able to defend
against your lawsuit under the theory that your contributory or
comparative negligence was the cause of your injuries.

Punitive Damages

There has been an increasing trend in car liability of
awarding more punitive damages for those who have successfully brought
a claim against a manufacturer or seller. These punitive damages
awards are above and beyond damages to compensate a plaintiff for his
or her injuries, and can range into tens of millions of dollars in
certain instances. Punitive damages are intended to punish
manufacturers and encourage them to fix defects that have resulted in
injury. Traditionally, car manufacturers have engaged in what is known
as a “cost-benefit” analysis when deciding whether to change a
potentially defective design. In this process, the manufacturer will
calculate the cost of implementing a design change, and weigh that
cost against the potential cost of litigation and settlement after the
defect causes injuries. Punitive damages are often awarded in order to
add to the potential costs a manufacturer will face if it decides not
to fix a design defect, thus shifting the cost-benefit analysis toward
the elimination of defects.

Worst Insurance Companies of 2008

The American Association of Justice has put together a list of the 10 worst insurance companies in America.

They base their rankings on which companies practice the "deny, delay and defend" doctrine, which basically means that they do whatever it takes to avoid paying out claims.

It is a fascinating report, and we highly reccomend taking a look. At the very least you should see if your insuranc company made the list.