According to the U.S. Department of Transportation, the average American family spends about 19 percent of its income on transportation. Which makes transportation is the second-largest household expense (following housing).
Of course, whether or not you are “average” depends in large part on where you live, and what the expected transportation costs are in that area. A more expensive area means you spend more for everything from gas to car insurance, boosting your costs even higher.
Risk for drivers also includes the likelihood of being in a car accident, as well as whether or not others carry required car insurance. In fact, your cost risk is more likely to be determined by the habits of the drivers around you than it is to be determined by gas prices.
Even though gas prices are different from state to state, the reality is that you can budget for them. But it’s practically impossible to effectively budget for an uninsured driver that causes an accident that wrecks your car.
Recently, WalletHub put together a study that identifies the states that are the riskiest — in terms of potential cost — for drivers.
Which States are Likely to Cost More?
The WalletHub analysis takes a look at a number of factors to determine how risky each state is to drivers’ wallets. The factors considered include minimum coverage requirements and percentage of uninsured drivers.
After looking at these stats, WalletHub determined that Maine is least risky state for drivers’ budgets, while Florida is the riskiest.
According to the study, Maine mandates relatively high liability insurance, as well as requiring drivers to carry medical payments insurance and uninsured motorist protection. Not only that, but many of Maine’s drivers are insured. Only about 4.7 percent of the drivers in Maine are uninsured.
This stands in contrast to Florida. First of all, about 23.8 percent of Florida drivers don’t bother with auto insurance, even though it is mandated. There’s a good chance that someone who causes an accident in Florida is uninsured.
Insurance requirements for those that do get coverage are also relatively low, which means that the other person’s coverage could max out before the costs are paid — leaving you to finish paying the bill if the driver doesn’t have the assets for you to go after.
What Does This Mean for You?
The study by WalletHub essentially means there’s no correlation between the liability insurance requirements in a state and the rate of uninsured drivers. So if you want to be able to budget more accurately for driving costs, move to a state that has much lower risk to your wallet.
Other states that are relatively “safe” include North Dakota, New York, Maryland, New Hampshire, Utah, Massachusetts, Oregon, South Carolina, Alaska, Kansas, and Minnesota.
On the other hand, states that are riskier for your budget, in addition to Florida, include Oklahoma, New Mexico, Mississippi, California, Tennessee, Michigan, Alabama, Washington, and Nevada.
If you want to better protect yourself from the potential that someone else’s habits will cost you while driving in these states, it’s a good idea to carry uninsured motorist insurance, and make sure you have adequate coverage in other areas to make up a lack.
It might not be your fault if one of these drivers hits you, but that’s poor comfort if you are stuck with the bill anyway. Research the cost of adding uninsured motorist insurance to your policy. The few extra dollars each month are likely worth the peace of mind knowing you, or your kids, are safer on the road.
Do you have this added protection on your car insurance policy? What’s another way your wallet can avoid the high price of driving costs?
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