Even though most states require drivers to purchase auto insurance, a new study reveals that a large percentage of the population doesn’t oblige.
The Insurance Research Council (IRC) estimates that 1 in 7 U.S. drivers are uninsured.
“This forces responsible drivers who carry insurance to bear the burden of paying for injuries caused by drivers who carry no insurance at all,” said Elizabeth A. Sprinkel, senior vice president of the IRC.
In its study, Uninsured Motorists 2011 Edition, the IRC attributes the country’s economic downturn as a major factor in the increase of uninsured drivers. The estimated percentage of uninsured motorists had declined four consecutive years before it went up to 14.3 percent in 2008 and then dropped slightly to 13.8 percent in 2009.
Problem Varies by State
Released in April, the IRC study also confirms that the magnitude of the uninsured motorist problem varies from state to state. The study examined data collected from nine insurers, representing approximately 50 percent of the private passenger auto insurance market in the U.S.
The variation in uninsured motorist statistics could also be attributed to how states verify insurance coverage. For example, Pennsylvania verifies insurance coverage each year with vehicle registration, but Ohio verifies coverage after an accident has occurred, not at the time of vehicle registration. Ohio has nearly twice as many uninsured drivers as Pennsylvania, according to the IRC study.
The five states with the lowest uninsured driver estimates:
- Massachusetts (4.5 %)
- Maine (4.5 %)
- New York (5 %)
- Pennsylvania (7 %)
- Vermont (7 %)
The five states with the highest uninsured driver estimates:
- Mississippi (28 %)
- New Mexico (26 %)
- Tennessee (24 %)
- Oklahoma (24 %)
- Florida (24 %)
So what are the available coverages and their differences? Here’s what you should know:
- Uninsured motorist coverage (UM) protects insureds who are injured by drivers who aren’t currently insured.
- Underinsured motorist coverage (UIM) provides a similar function if the driver’s insurance coverage isn’t sufficient to pay the insured’s damages for bodily injury.
UM/UIM coverage offerings and pricing vary from state to state, depending on regulatory requirements and business considerations. Some states also require insurers to offer uninsured motorist property damage coverage designed to repair or replace vehicles damaged in collisions with uninsured motorists.
To prevent financial hardships in the event that you are in an accident with an uninsured motorist, talk to your Agent about adding uninsured coverage to your auto policy. Considering the risks, it could be worth the additional premium you pay.