Even though not carrying auto insurance is against the law in most states, it happens more often than most people realize. The Insurance Research Council (IRC), reports that about one in seven at-fault drivers in a collision with another vehicle will be uninsured.

According to Steve Cox, Vice President of the Council of Better Business Bureaus, based in Arlington, VA, what happens to the insured victim after this type of accident can be upsetting and expensive. Instead of the at-fault driver’s auto insurance policy covering the costs of the victim’s vehicle repairs and replacement rental car, it ends up being the victim’s responsibility to pay for everything.

For this reason, many drivers include uninsured motorist coverage on their auto insurance policy. Uninsured motorist coverage pays for injury and damages caused by an uninsured or hit-and-run driver.

"But, uninsured motorist coverage is not obligatory in every state and therefore, some insured drivers are not covered," said Carolyn Gorman, Vice President of the Insurance Information Institute, a not for profit consumer education organization.

Underinsured drivers are another problem. These are drivers who have only the minimum state required limits of liability on their auto insurance, which may not necessarily provide enough coverage to adequately compensate others involved in the accident. Uninsured motorist coverage pays the difference between the at-fault driver’s liability limits of coverage and the actual costs of the injury or damage, as well as lost wages – but only up to the limits established by the policyholder when it is added to the their auto insurance. It also provides protection if an individual is hit as a pedestrian.

		"Despite the fact that you are the victim if an uninsured driver slams into your car, you are obligated to pay the deductible and your auto insurance will be used to cover repairs," said Gorman. "And, unless your auto insurance policy includes replacement rental car coverage, you could be stuck without transportation while your car is being repaired or you are waiting for authorization to get a new car." That’s why it is important for insured drivers to make sure they have sufficient coverage, including some options worth considering for additional financial protection, including the following: Collision Coverage. This coverage pays for damage to your car resulting from a collision with another car, flipping over and other situations, including being hit by an uninsured driver. Collision coverage is generally sold with a deductible of $250 to $1,000 and the higher the deductible, the lower the premium. Uninsured and Underinsured Motorist Coverage. This coverage will reimburse you, members of your family, or designated driver who is hit by an uninsured or hit-and-run driver. Underinsured motorist coverage applies when an at-fault driver has insufficient insurance to pay for your total loss. The coverage also applies if you are hit as a pedestrian. Replacement Rental Car Coverage. For a couple dollars a month, this coverage provides a replacement rental car while a car is being repaired after an accident. Since the average car is in the repair shop for two weeks after an accident, the savings can be substantial. Based on the average daily rate for a rental car, it can end up costing more in most cities to rent a car for one day than for a full-year of coverage.