As the Economy Drops, So Does the Number of Valid Insurance Policies

By: Sarah Snyder
NewsWest 9

That luxury car passing you on the freeway may look nice, but the driver may not have insurance. A growing number of West Texans are letting their insurance policies lapse and it's got agencies and auto repair centers trying to pick up the pieces.

"We're seeing a lot of cars come in where the other driver that was the cause of the accident doesn't have insurance," All-Star Collision Owner, Allen Frasier, said.

There's a rising number of drivers who carry insurance cards, but they've let their policies lapse after losing their jobs.

"I have seen a lot more of my clients go on a cancelation notice here lately probably because of the economy and trying to cut back where you can," Farmers Insurance Agent Tiffany Blakely, said.

They usually see more policies slip during the holidays, but this year, it didn't bounce back right away, clients have continued dropping.

"A lot of the oil companies are laying people off," Blakely said. "And you've got to have your electricity over insurance."

About 10-15 percent of the cars at All-Star Collision have inadequate or no insurance. The damaged cars will continue to sit on the lot until the owner can make up the difference, sometimes totaling thousands of dollars.

Auto shops are finding that drivers are also purchasing the cheapest policy they can find which sometimes is like having no insurance at all.

And with so many expensive cars hitting the Midland highways often times the car that gets damaged is worth more than the insurance policy covers.

"Mercedes, Lexus, the cars aren't cheap and neither are the parts or service or labor to repair them, so you can have insurance but be totally inadequate," Frasier said.

Agencies say the best thing drivers can do is to get uninsured motorist protection. It adds a few extra dollars each month, but may save you from paying thousands if you hit someone with no insurance.

"It's definitely a way to pay $5-$10, it can vary, much more a month," Blakely said. "But I'd rather pay that much more each month to protect myself against someone who could hit me with no insurance."