One in Three U.S. Drivers Don't Carry Enough Liability Insurance

Even if everyone involved avoids serious injury, getting into a car accident is no one's idea of a good day — and it's that much worse when one or more drivers are underinsured (or uninsured entirely). Whether you find yourself at fault without the protection you need to prevent financial catastrophe or stuck with an out-of-commission car and no one stepping up to foot the bill, it's a grim situation.

And, unfortunately, according to a new report from the Insurance Research Council, it's a situation whose feasibility is on the rise. Analyzing driver data from between the years of 2017 and 2023, the study found that the rate of underinsured drivers was on the rise in 49 of 50 states. At the national level, fully one third — 33.4% — of drivers were un- or underinsured in 2023, a figure that had climbed 10 percentage points since 2017.

Why are there more UMs and UIMs — and why is it dangerous?

According to the IRC's research, the rates of both uninsured motorists (UMs) and underinsured motorists (UIMs) have been on the increase across the country. UIMs, specifically, have seen upticks in every state except New York and the District of Columbia.

The trend seemed to worsen in 2020 with the onset of the pandemic, when nearly every state saw an increase in totally uninsured drivers. By 2023, though, some states did see decreases and relatively low rates of UMs, including Michigan (which enjoyed the largest decline in the UM rate between 2020 and 2023), as well as Maine, Utah and Idaho (states where the UM rate hovers under 7%).

At the national level, though, one in three drivers is operating their vehicle without sufficient liability coverage. In Mississippi, 2023 data showed 28.2% of drivers were uninsured — the highest rate in the nation. Runners-up that year were New Mexico (24.1% UM rate) and the District of Columbia (23.1%).

As their names suggest, underinsured motorists are those who carry some insurance, but whose coverage is insufficient to meet the demand of the costs of an accident. Uninsured motorists, of course, simply drive without any liability insurance — even though coverage is legally required by every state in the nation except New Hampshire. (Even those who "live free or die" are still required to show proof of financial responsibility in the event of an accident.)

Obviously, getting into an accident without sufficient financial protection can spell disaster for the at-fault party's bank account — and the ability of the accident's victim to get justice.

The increasing cost of car insurance — and everything else — is also likely to be affecting motorists' ability and willingness to comply with the legal requirement to carry it (or afford enough of it). Even those who do carry auto insurance have been shopping around for better deals at record rates.

How to protect yourself — and your assets — on the road

There is a type of auto insurance known as UM/UIM coverage that can step in to help provide coverage for both vehicular repairs and medical treatment, should you find yourself in an accident with an un- or underinsured motorist.

However, less than half of states, as well as the District of Columbia, make it a legal requirement to carry UM/UIM coverage of any kind, which means many insured motorists may forgo it.

Given the trends in under- and uninsured motorists, it may be worthwhile to review your car insurance policy and add in UM/UIM coverages, even if they're not required by your state.

In addition, check to ensure you have enough liability coverage on your own side, so you don't become part of the UIM statistics. You might also double-check to ensure you have full coverage, including comprehensive and collision, so you can make a claim for repairs to both your car and another driver's car in the event that you’re in an accident. (If you carry multiple policies or have multiple vehicles covered on one policy, you may also be able to benefit from the higher coverage limits of stacked insurance.)

Unfortunately, though, auto insurance prices are still on the rise — and expected to creep up by another 7.5% in 2025, on average.

Shopping around can help, but despite the trends, skipping out entirely on auto insurance isn't an option — at least not one without grave consequences.