Insurance Research Council (IRC) Study Estimates One In Six Drivers Driving Without Insurance
The Insurance Research Council (IRC) anticipates that the recent economic downturn will trigger a sharp rise in the number of uninsured. Despite a decrease in percentage of uninsured nationally from 14.9 percent in 2003 to 13.8 percent in 2007, the percentage of uninsured may now grow to one in six drivers nationally by 2010.
The recent IRC study, Uninsured Motorists, 2008 edition, highlights a number of interesting things:
Uninsured Problem Varies By State
The study notes that the size of the uninsured population varies significantly from one state to another. In 2007, the five states with the highest number of uninsured drivers were:
- New Mexico (29 percent)
- Mississippi (28 percent)
- Alabama (26 percent)
- Oklahoma (24 percent), and
- Florida (23 percent)
Both California (18 percent) and Arizona (18 percent) had alarmingly high rates of uninsured, but Massachusetts (1 percent) and New York (5 percent) had some of the lowest rates.
Strong Correlation Between Uninsured And Unemployment
The IRC report also noted a strong correlation between the percentage of uninsured motorists and the unemployment rate. Using the discovered correlation of three-quarters of a percentage point in uninsured motorists for each percentage increase in the unemployment rate, the IRC estimates that the national average rate of uninsured will be 16.1 percent in 2010 – one in six drivers on the road nationally.
Conclusions
Even at 2007 levels too many drivers are driving with no insurance in too many states. It is shocking that more than 10% of the drivers on the road have no insurance in 70% of the states nationally and one in six drivers had no insurance in 25% of states (including California). These figures were before the significant downturn in 2008. What are the numbers now?
Not mentioned in the study, but just as important to you, are the number of underinsured drivers. Because of low state minimum insurance requirements and many drivers that cause accidents may not have sufficient coverage to pay for the bodily injury and property damage resulting from their negligence. Like the rate of uninsured, I suspect that the rate of underinsured is also growing with the economic downturn.
While the IRC concluded that responsible drivers with insurance coverage bear the financial burden of the uninsured in the form of higher premiums. Lost in this logic is the fact that a more significant burden is borne by parties injured in automobile accidents caused by people with insufficient insurance or no insurance at all and who do not have sufficient UM/UIM coverage themselves.
The laws in each state are different and because there are coverage differences between carriers, it is essential that you consult with a trustworthy professional insurance agent or broker when purchasing your car insurance to be sure that you and your family have the right coverage for your exposure and budget. For help with these issues and other related topics, contact Bill Yates or Cary White at Presidio Point Insurance Services or look at our website at www.legalmalpracticeinsuranceservices.com. You may also contact us toll free at 1-800-355-1204.
Contact
Cary White, President
Presidio Point Insurance Services Inc
1-800-355-1204 x 901
cwhite@presidiopoint.com
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