Thursday, August 27, 2009


Unfortunately, many United States residents have been impacted negatively by the downturn of the economy often leading to the unwise decision of either lowering or cancelling automobile insurance coverage to save money. The serious risks and consequences of such decisions are often not realized, turning out to be more costly in the long run.

Failure to Maintain Mandatory Insurance Coverage

All but two states make having some kind of protection mandatory in order to operate vehicles legally. Driving without proof of financial responsibility may result in citations and even the impounding of vehicles. Some states may even suspend driving privileges and vehicle registrations and the penalties and fines incurred will most likely turn out to be far more costly than having maintained coverage in effect.

Furthermore, a person financing a vehicle is usually required by their lien holder to have "Comprehensive and Collision" coverage in order to protect their automobile for physical damage and theft. Failure to maintain such coverage may lead to the forced placement of a policy by the financing institution where the premium is usually much higher than what an individual would normally pay, resulting in an increased financial burden.

The Dangers of Uninsured or Underinsured Driving

Various types of coverage are designed to protect an insured's investment in their vehicle, pay medical damages and cover legal liability to other's injury or damages as a result of an accident. Without a policy in force or without the proper coverage, a person would have to bear the entire cost in the event of an accident, leading to a crippling financial loss.

It's far too expensive and dangerous to cancel or lower coverage. As advised by most government-issued consumer guides, comparison shopping for the right insurer increases the chances of finding affordable premiums without having to compromise the desired protection.

  • Small business owners are struggling to provide health insurance for their staff and do not feel confident in determining the health insurance that best fits their employees’ needs, according to a new survey by the National Association of Insurance Commissioners (NAIC). The finding highlights the need for more insurance education, even as the debate over national health care reform continues around the country.

  • In the NAIC survey, conducted July 22-31, among a participant sample of 500 small business decision makers, 64 percent of small business owners responded that they are not confident picking a health insurance policy that fits their budgets and their employees’ needs. One-third admitted that they cannot afford to provide health insurance to their employees.

  • Additionally, the study found a clear gap in understanding the fiscal responsibilities associated with offering health insurance. Of the small business owners surveyed, 60 percent said they are not confident they understand the tax implications of paying for a portion of their employees’ health insurance premiums. Only 27 percent say they understand all the factors that can affect their small group health premiums.

  • “In this economic environment, small business owners need to be especially mindful of any decision that will affect their financial future,” said NAIC President and New Hampshire Insurance Commissioner Roger Sevigny. “Now, more than ever, it is important they get smart about their choices and consider the implications that making a bad decision could have on their business and their employees’ future.”

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