MALVERN, PA — A new report by the Insurance Research Council (IRC), Uninsured and Underinsured Motorists: 2017–2023, has revealed a troubling rise in uninsured and underinsured driver rates across the United States. The report found that 33.4% of drivers were either uninsured or underinsured in 2023, a significant 10-point increase compared to 2017.
Despite laws in 49 states and the District of Columbia requiring liability insurance, the study showed that more than one in seven drivers nationwide—15.4%—remained uninsured in 2023, marking a 3% rise over six years. States with the highest rates of uninsured drivers included Mississippi (28.2%), New Mexico (24.1%), and the District of Columbia (23.1%). Maine (5.7%), Utah (6.2%), and Idaho (6.4%) stood out for having the lowest rates.
Auto insurers provide two critical forms of coverage to shield policyholders from at-fault drivers with insufficient coverage. Uninsured motorist (UM) coverage compensates victims for injuries or property damage caused by drivers without liability insurance, while underinsured motorist (UIM) coverage addresses costs exceeding the at-fault driver’s limits.
Economic factors, including affordability challenges, are driving the upward trend, particularly for uninsured motorist rates. “With the abrupt changes in the economy and impacts on household income, UM rates rose in nearly every state from 2019 to 2020,” noted Dale Porfilio, president of IRC. “We have been watching for UM rates to improve with lower unemployment and household income increases, but the IRC’s latest research shows UM rates continue to tick upward in most states. We presume deteriorating insurance affordability is more than offsetting economic improvements.”
The report also highlighted a dramatic rise in underinsured motorist rates since 2020, attributed to increasing premiums and coverage gaps. “The increase in UIM rates points to higher UIM premiums in the future, worsening affordability and potentially increasing the likelihood of more uninsured drivers,” said Porfilio, who also serves as chief insurance officer at the Insurance Information Institute. “This demonstrates the complex interconnectedness of these two coverages as insurers protect consumers from insufficient coverage by at-fault drivers.”
The study revealed significant state-by-state variation in uninsured motorist rates, influenced by economic conditions, insurance costs, and regulatory frameworks. For example, Michigan experienced a decline in uninsured drivers after reforming its auto insurance system, while Washington saw one of the steepest increases from 2020 to 2023.
Nearly every state saw a rise in underinsured motorist rates between 2017 and 2023, with the lone exceptions being New York and the District of Columbia.
The findings underscore the challenges facing drivers, insurers, and policymakers as they grapple with affordability and accessibility. Moving forward, these trends may prompt renewed efforts to curb uninsured driving and enhance protections for all road users, ensuring financial stability within the insurance market and improved safety on the roads.
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