Uninsured and Underinsured Drivers on the Rise in 2023, IRC Report Finds

A recent Insurance Research Council (IRC) report highlights a growing concern in the auto insurance industry—more than one in three drivers in 2023 were either uninsured or underinsured. The report, Uninsured and Underinsured Motorists: 2017–2023, found that 15.4% of drivers nationwide had no insurance, while 18.0% carried insufficient coverage. This marks a 10 percentage point increase in the combined rate since 2017.

The study analyzed data from 17 insurers, covering about 55% of the private passenger auto insurance market, and examined factors influencing uninsured motorist (UM) and underinsured motorist (UIM) rates. The findings revealed regional disparities, with UM rates ranging from 5.7% in Maine to 28.2% in Mississippi. The study also found that economic conditions, insurance costs, and state regulations played a role in UM and UIM rate variations. Notably, nearly all states saw a rise in UIM rates, with Colorado experiencing the largest increase.

The report raises concerns about the financial impact on insured drivers, as higher UIM rates could lead to rising premiums and affordability challenges. Additionally, in states that do not require UIM coverage, UM rates were significantly higher. Experts warn that increasing UIM premiums may further drive up the number of uninsured motorists, highlighting the interconnected nature of these issues.