Insurance against Lack of Insurance? A Dissent from the Uninsured Motorist Endorsement

Abstract

Recently the insurance industry has sponsored, on a nationwide basis, its own solution to the perennial problem of the uninsured and financially irresponsible motorist. It consists of a policy called the Uninsured Motorist Endorsement, designed to protect the insured against the risk of injury by uninsured and negligent drivers. The policy is sold on either a compulsory or a more or less automatic basis to holders of automobile liability insurance policies. The author suggests that for at least three major reasons the industry's solution is wanting: (1) the terms of the policy are unduly restrictive, (2) they give rise to innumerable law suits, despite an unusual clause compelling the insured victim to arbitrate disputes with his insurer, and (3) they ignore pedestrian victims who do not own cars nor share a car-owner's household. The most urgent reform needed is to extend protection, as New York has done, to these pedestrian victims. Further, existing inequitable restrictions on recovery should be removed, especially if, as New York's experience seems to indicate, the Endorsement has turned out to be a profitable venture for the industry.