[K C Muffin]

You'd think, Banyon. But when you're in an area with a high ratio of uninsured drivers, the insured driver's company has to pay the damages, of course if they have physical damage insurance. You are right that the physical damage insurance (the one covering the insured driver that's not at fault in this scenario) will make the insured driver pay a deductible. You are also right that some, if not all, those costs are borne by policyholders in increased rates.

The fact of the matter is, if company A pays out more in one area than they do in another in this type of claim, company A is going to pull out of the area (the regulators call it 'red lining', but the companies call it 'underwriting'). All that is bad for the insured. Plus, it takes up to a year to completely pull out of an area for the company - so in the meantime, they're operating in the red because they can't raise rates that fast. Companies realize there's money to be made in socially backward areas, but they can't get the rates high enough to make money. My hope is that they'll squeal lout and long to the insurance commission before they try to pull out. Because when they do, it will cost a pretty penny to drive a junker.