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March 18th, 2009 by admin

Forced to cut costs, some families are dropping their car insurance or letting their payments slide, but that cost-cutting measure could end up costing you. State law requires drivers to have insurance behind the wheel but many are driving without it anyway.

All American Insurance owner Chris Pringle has been in the business for 16 years and says about 15 to 20% of his clients have dropped their car insurance or have let their payments slide.

“It’s been a shock. I thought we were somewhat in a recession-proof business because it’s required for everyone to have,” Pringle said.

Little Rock Police say uninsured drivers are an ongoing issue for the department. So far this year they’ve issued 713 tickets for no proof of insurance. This time last year they had issued 720.

“That’s only the people we’ve caught. A lot of people who drive without insurance we don’t catch because a lot of times they don’t violate any other law. There’s nothing on your vehicle that says ‘I don’t have insurance,’” Lt. Terry Hastings said.

Hastings says those trying to pinch pennies could end up costing you in higher premiums.

“It’s really unfair to the person involved in an accident. You have insurance to protect you from civil liability. That leaves a person who wasn’t at fault holding the bag, you might say,” he said.

Pringle’s clients who are trying to save money to put food on the table are affecting Pringle’s ability to do the same.

“I think ‘08 snuck up on a lot of people. I think as we closed out the numbers, it shocked a lot of people that we were down 25 to 28%,” he said.

Pringle said that many of his clients are shopping around for better rates to save money and many are also adding uninsured motorist coverage. He said insurance carriers are required to report to the state the VIN numbers of vehicles when the owners fail to make insurance payments for three consecutive months. However, he said many of his clients will let their payments slide for a month or two, then pick back up again to avoid having their car reported to the state.

This entry was posted on Wednesday, March 18th, 2009 at 1:57 pm and is filed under Insurance News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.