Insured but not covered

As if the lousy economy hasn’t done enough damage, here’s another thing to worry about: more people driving without automobile insurance.

State insurance officials say the number of drivers without legally required coverage rises in tandem with unemployment, which is now more than 12% in California.

About 18% of drivers didn’t have insurance in 2007, the most recent year for which data are available. Back then, the unemployment rate was just 5.4%.

“We’ve seen in the past that higher unemployment tracks with a higher rate of people being uninsured,” said Darrel Ng, a spokesman for the department. “So we suspect that the number of people without coverage has gone up.”

What happens if you get hit by an uninsured driver? Worse, what if that driver flees the scene rather than face the music for lacking coverage?

Pacific Palisades resident Jill Smith, 53, believes this is what happened to her after her Volvo got rear-ended this month while she was exiting the 101 Freeway in Agoura Hills. The driver of the other vehicle took off at top speed.

And because she was unable to get the vehicle’s license plate number, Smith is now stuck with the bill for $650 in repairs to her car.

“It seems so unfair,” she told me. “I’m the one with insurance. I’m the one who obeyed the law. And now I’m the one who has to pay for all the damage.”

What happened to Smith could happen to anyone. She said that she stopped at a red light at the bottom of the freeway offramp.

“Suddenly -- boom! -- a guy plowed into me from behind,” Smith recalled. “I turned around and saw a man and a woman in a white van. They looked horrified and shocked. They looked at me and then looked at each other.”

She said she drove to a nearby gas station, assuming the driver of the van would follow so they could exchange the necessary information.

“But as soon as I turned off my car and looked around, I saw that they were speeding off as fast as they could.”

Smith said she gave chase to try to get the van’s license number. She called 911 as she drove and was immediately told by a dispatcher to knock off the Steve McQueen stuff -- that’s a good way to get shot.

The dispatcher patched Smith through to the California Highway Patrol, which told her to park somewhere so a patrol car could find her. An officer pulled up about 45 minutes later to take an accident report.

Smith said her insurer, AAA, was sympathetic toward her situation and wasted no time in determining that the accident wasn’t her fault.

But it drew the line at paying for any repairs, which it said had to come out of Smith’s $1,000 deductible -- even though her policy says the deductible will be waived if she’s hit by an uninsured driver.

“They said this was because I didn’t get the van’s license plate number,” Smith noted, even though she was expressly told by the cops not to chase after the van to get it.

Talk about your Catch-22s.

“You have to be able to identify the other vehicle,” said Jeffrey Spring, a spokesman for the Automobile Club of Southern California. “That’s one of our defenses against fraud.”

In other words, AAA, like all insurers, wants to protect itself from unscrupulous types who might back into a pole and then blame the damage on a hit-and-run driver.

But what if you’re told by the cops to back off when you’re trying to get the other guy’s license number? How can you protect yourself in situations like this?

“That’s a good question,” Spring replied.

One possibility, he said, is to have a policy with a very low deductible -- $100, say -- so that you won’t be on the hook for costly repairs. Of course, this would significantly boost your premium.

That might be fine with your insurer, but it’s not the best possible solution for consumers.

California law requires not just that you have auto insurance but that your policy include coverage for handling costs if you get hit by an uninsured driver.

According to the state Department of Insurance, drivers need to have at least $15,000 in coverage for injuries or deaths involving anyone in the car. You also need at least $5,000 in liability coverage in case your run-in with an uninsured driver involves damage to anything else.

“That’s the bare minimum,” the department’s Ng said.

Amy Bach, executive director of the advocacy group United Policyholders, said the bare minimum is seldom sufficient. If an uninsured driver sends you or a passenger to the hospital, for example, the bill could run in the hundreds of thousands of dollars.

“A lot of people overlook this aspect of their coverage,” Bach said. “They shouldn’t.”

She advised people to check their policy to see how much insurance they have for incidents involving uninsured or underinsured motorists. Call your insurer and ask if this is sufficient. If not, shop around for quotes from other providers.

In Smith’s case, she has plenty of coverage for injuries or deaths resulting from an uninsured driver. But she got caught between a rock and a hard place when it came to paying for the damage to her car.

“I can handle it,” she said. “But these are difficult times. I don’t want to pay $650 for something I didn’t do. And what about all the people who would have trouble paying $650?”

That’s another good question. As long as insurers require some way to identify the other vehicle, the burden’s on you to get that license plate number.

But go easy on the car chases. No sense in making a bad situation worse.

David Lazarus’ column runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.