A new study from Insurance Research Council says the numbers of drivers opting to operate without auto insurance may spike as the economy worsens.
According to the study, which used data collected from nine insurers representing roughly 50% of the U.S. auto insurance market—approximately one in six drivers across the United States—may be driving uninsured by 2010. This projected upswing will reverse a trend, as the percentage of uninsured motorists decreased nationally from 14.9% in 2003 to 13.8% in 2007.
The recently released survey, “Uninsured Motorists, 2008 Edition,” found a wide divergence in the percentage of uninsured drivers among states, with New Mexico having the most (29%) and Massachusetts having the least (1%). The numbers also revealed a strong correlation between the prevalence of uninsured motorists and the unemployment rate, with an increase in the unemployment rate of one percentage point correlating with a three-quarters of a percentage point increase in the uninsured motorists numbers.
“An increase in the number of uninsured motorists is an unfortunate consequence of the economic downturn, and illustrates how virtually everyone is affected by recent economic developments," says Elizabeth Sprinkel, SVP of the IRC. “Responsible drivers who purchase insurance end up paying for injuries caused by uninsured drivers.”
The study uses a ratio of insurance claims made by individuals who were injured by uninsured drivers versus claims made by individuals who were injured by insured drivers to gauge the uninsured driver population.
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