There are a lot of things we can go without. The latest and greatest fill-in-the-blank might very well be one of them, along with that unused gym membership are a couple examples of useless things we waste money on. Car insurance is not one of those things. In fact, it is required by law in Washington to carry a policy if you drive a car, even though the minimum amounts the law names are very low. Here are the facts on the likelihood of you being in a car accident and the costs you may incur to help convince you of the importance of buying an insurance policy.
In 2010, the National Highway Traffic Safety Administration compiled data on how many drivers fill US roads, and how many crashes they get into. 210 million drivers took part in approximately 5,419,000 crashes that police took reports on. In those crashes, nearly 33,000 people died. 2,239,000 were injured. That’s a lot of people. Just by those numbers alone, you probably know someone who was in a car crash, and maybe that person was you.
Put another way, for every 100,000 licensed drivers, there were 1,066 injuries.
An average of 90 people died each day in motor vehicle crashes in 2010—one every 16 minutes. Your odds of dying in a motor vehicle crash are 1 in 112. The good news is the risk of dying in a car crash have gone down, because modern cars and trucks have a lot more safety features than ever before. However, due to the propensity of drivers to drive distracted or drunk, your risk of getting into a car crash have increased.
So let’s say you survive, but you got hurt. How much do these accidents cost? About 5 percent of bodily injury claims in 2010 were for more than $100,000 while about 2 percent reached $300,000.
Now let’s factor in a couple more statistics to see if the person who hits you is likely to carry enough insurance to cover those costs. The odds of running into people with no insurance at all to pay for your claims against them are probably higher than you think, unfortunately. The Insurance Research Council’s most recent estimate, from 2009, is that 13.8 percent of all United States drivers have no insurance at all. Washington state drivers are estimated to come in a little higher than that rate, at 16% uninsured.
Remember, it’s state law to carry bodily injury insurance, but not much of it. If the at-fault driver carries only the minimum amounts, you could be looking at a big deficit. Here’s a real-life example from this New York Times story about a victim of a driver who carried just the minimum coverage:
Insurance Services Office (ISO) estimates that about 20 percent of people who do have insurance purchase just the minimum liability coverage in case they hurt someone else. Their policies may pay out as little as $25,000 in many states. That’s why Kirby Francis remains glad six years later that his parents had $500,000 in underinsured motorist coverage back when someone crossed a highway line in Oregon and plowed into him head-on while he was driving home from college.
The other driver, who ended up dead in a canyon 200 feet below the road, had just $50,000 in coverage. By the time Mr. Francis punched his way out of his burning vehicle, with a lacerated spleen, a broken tibia, and his elbow in six pieces, he was in need of $130,000 in operations and other medical care, including radiation treatments for his arm that his health insurer wasn’t going to pay for. He also said that he received a $200,000 settlement for his troubles, beyond the reimbursement for medical costs that mostly went to his health insurance company.
Mistakes happen. More than 90% of car accidents happen because of human error. Insurance coverage will make or break what happens next, so make sure you have adequate coverage for you and your family.