December 29, 2002 

by Senior Advisor, John Dietz 

Number of Uninsured and Underinsured Increases in 2008

The Insurance Research Council, which is a professionally funded group, will release a study in January stating that the numbers of automobile drives who are underinsured and uninsured has increased.  Data shows that increasingly alarming numbers of motorists are stripping their policies to minimum levels of liability.

As unemployment increases and the economy worsens it is estimated that the report will state that several hundred thousands of policies have been dropped and the trend will show that the number of underinsured motorists have increased significantly to as high as 25 percent.
The trend is troublesome for anyone on the road.  If an underinsured motorist hits your car, you will have to sue them.  Twenty states require motorists to carry underinsured insurance, but this increases monthly payments.  In the last year, insurance premiums rose 3.8 percent on the average automobile policy.  According to State Farm, Uninsured and underinsured motorist coverage adds 7 percent to 9 percent to an average premium. New Hampshire and Wisconsin do not require drivers to have insurance, but require drivers to show proof of ability to pay damages for liability.

The Insurance Research Council reported on a study released in 2006 that a minimum of 15 percent of drivers on the road were uninsured.  In states where illegal aliens are concentrated, the uninsured population could be as high as 30 percent.
The trend is bad news for everybody on the road. If you're hit by an uninsured motorist, you may have to sue to recover costs, and many uninsured motorists have few assets. You can protect yourself by carrying uninsured-motorist coverage -- almost half of states require it -- but this may boost your premium.
The preliminary data indicate that a single percentage point increase in the unemployment rate is associated with a half-point increase in the percentage of uninsured drivers.