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Uninsured Motorists


Last Updated: 2/1/2023
Issue: Auto liability insurance is compulsory in most jurisdictions; 49 states and the District of Columbia require drivers to have auto liability insurance before they can legally drive a motor vehicle, although the type of insurance and the amount of coverage required varies. New Hampshire is the only state that does not have a compulsory insurance liability law—auto insurance is not required if the driver complies with alternative financial responsibility requirements. However, a financial responsibility law exists in New Hampshire that imposes insurance requirements on those drivers that have demonstrated a lack of fiscal responsibility for a past auto accident.

Overview: Despite laws that compel the purchase of auto insurance, many people choose to drive without it. According to the Insurance Research Council (IRC), 12.6% of motorists, or about one in eight drivers, were uninsured in 2019. Uninsured motorist rates can vary widely by state, from 3.1% in New Jersey to 29.4% in Mississippi. There are many reasons people choose to drive without auto liability insurance. Some drivers cannot afford insurance; the IRC cites the economic downturn as a major factor in the leveling trend of uninsured motorists. A study by the Financial Responsibility and Insurance Committee of the American Association of Motor Vehicle Administrators found that 82% of uninsured drivers indicated they can't afford insurance or that their vehicle is inoperable or not in use. 

Paying for uninsured motorists is a problem for responsible drivers who abide by compulsory insurance laws. The costs are passed along to the public in the form of uninsured motorist’s coverage. Thus, in addition to paying for their own actions, each insured motorist also pays for a portion of the costs for others that choose to disobey the law.

The NAIC Property and Casualty Insurance (C) Committee developed a white paper titled Uninsured Motorists: A Growing Problem for Consumers, which discusses the issues associated with identifying uninsured motorists in the states and solving the problem of noncompliance with compulsory motor vehicle insurance laws. The white paper describes the pros and cons of several solutions that have been tried in dealing with the uninsured motorist problem and concludes that there is an obvious need in developing a uniform cost effective approach for reducing the number of uninsured motorist.


The NAIC's Auto Insurance (C/D) Working Group is charged with reviewing issues relating to low-income households and the auto insurance marketplace. Some of this group's work has involved studying uninsured motorists. The group issued a Compendium of Reports on the Pricing of Personal Automobile Insurance in November 2014.  The report consisted of summaries on uninsured motorists and the competitiveness of auto markets; studies examining the use of credit scoring, occupation or education in insurance; insurer initiatives related to availability and affordability issues; consumer groups’ perspectives; policy options, such as state laws related to auto insurance; and state programs and initiatives related to the availability and affordability of auto insurance.  In June 2020, the Property & Casualty Insurance (C) Committee adopted the Private Passenger Automobile Studywhich looks at state-by-state data and auto insurance affordability.

Through the NAIC, state insurance regulators, as well as the insurance industry, continue to work on a solution to reduce the number of uninsured motorists on the nation's highways.


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