Uninsured motorists pose one of the greatest risks to drivers and pedestrians throughout the country. According to studies by the Insurance Resource Council, 12.6% of drivers in the United States are driving without insurance coverage. While this is down from the peak of 15% in 1992, it still means that 1 in 8 drivers are not only violating the law, they are putting the burden for coverage where it doesn’t belong…on other drivers and their families.
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The problem of uninsured motorists varies considerably from state to state. Oklahoma is by far the worst offender with nearly 25.9% of drivers failing to carry insurance coverage, followed by Florida at 23.8%, and Mississippi at 22.9%. Those states with the lowest rates of uninsured motorists are Utah with 5.8%, New York with 5.3%, and Maine with 4.7%. By comparison, in Illinois, 13% of drivers are uninsured which is closer to the overall national average of 12.6%. These vast discrepancies can be tied to both socio-economic factors, levels of enforcement, and penalties assessed when drivers fail to comply with the law.
Uninsured motorists are a national problem which states are addressing with a variety of solutions. In Minnesota where 10.6% of drivers are uninsured, lawmakers are currently considering the installation of license plate readers along major thoroughfares that would read plates and compare these to insurance databases and database records. This data would then be crunched, and drivers whose plates show up without coverage would be issued a summons to appear in court and provide proof that their vehicle is covered. Drivers failing to do so would have their license suspended and could have their vehicle impounded until such time that they provide proof of coverage.
In Tennessee, the state has has instituted a tiered fine system to reign in the 20% of uninsured motorists driving throughout the state. Motorists caught driving without insurance will face a $25 fine upon discovery, followed by $100 fine if the driver fails to provide proof of obtaining coverage within 30 days. In extreme cases, the state may also assess a civil penalty of up to $250 per day at the discretion of the court.
While solutions such as these new laws and penalties will help, they won’t stop the problem. That is because the vast majority of uninsured motorists are driving their vehicles without coverage simply because they can not afford insurance coverage. Thus, assessing fines and penalties may be hollow deterrents that motorists will ignore in the same way they have ignored the existing insurance requirements.
Realizing this, California has taken a vastly different approach. Rather than increasing fines and penalties, they are making it more affordable to obtain auto insurance coverage. The state’s Low Cost Auto Insurance Program provides basic insurance coverage to drivers who hold a valid California driver’s license, own a vehicle worth less than $25,000, are at least 19 years old, and meet income eligibility guidelines showing they make less than $29,000 per year for individuals, and $60,000 for families of four. Drivers meeting this requirements can obtain coverage for as little as $213 per year. This is a significant help as 1/3 of uninsured drivers in California and across the country make less than $20,000 per year. If successful in California, other state’s may move to adopt similar strategies.
As the overall number of motorists on the road increases annually, it is imperative for states to address the problem of uninsured motorists now before it becomes worse. To date, most have required drivers to carry uninsured/underinsured motorist, personal injury protection, as well as additional property and personal injury coverage. While understandable, this has raised insurance rates for drivers not violating the law. These drivers are voters and they are pressuring legislators throughout the country to remove these additional burdens from their shoulders.
According to the National Association of Insurance Commissioners, the cost of insurance presently averages roughly 1.5% of a consumer’s total income. However, it should be noted that insurance premiums vary widely from state to state based on the industry’s risk models. In Louisiana where accidents and theft rates are high, consumers can expect to spend about $1300 per year to insure their vehicle, whereas in Illinois that same coverage would cost around $800.
It is estimated that up to 14% of all auto accidents involve an uninsured motorist. With nearly 5.7 million accidents reported in 2013, the most recent year compiled data is available for, it’s a significant number to take note of. Based on these stats, it means that nearly 770,000 accidents involve an uninsured motorist. When there is an accident, the average claim exceeds $3200 for property damage, and $15,000 for personal injury; expenses which are picked up by policyholders who are forced to shoulder the costs of this additional burden through their own policies. While state’s have generated nearly $860 million in fines/fees from uninsured motorists in the past, these revenues do little to reduce that burden.