One in three drivers doesn’t have enough car insurance

One in three drivers is behind the wheel without enough car insurance, a figure that’s been climbing since the pandemic.

Looking at claims data from between 2017 and 2023, a report from the Insurance Research Council found the rate of U.S. drivers who were either underinsured or completely uninsured jumped from 23% to 33.4%.

Nearly every state requires motorists to carry some amount of liability insurance to be on the road legally. In 2017, less than 11% of car accidents with injuries resulted in medical bills higher than the at-fault driver’s liability coverage.  

That figure rose to 14.7% in 2020 and, by 2023, nearly one in five (18%) at-fault drivers didn’t have enough coverage to pay for medical expenses.  

The same year, more than one in seven drivers (15.4%) had no auto insurance at all, according to the report. 

In a statement, IRC president Dale Porfilio says the spike in under- and uninsured drivers was fueled by the abrupt economic upheaval brought on by the pandemic.

“We’ve been watching for rates to improve with lower unemployment and household income increases, but [they] continue to tick upward in most states,” he added. “We presume deteriorating insurance affordability is more than offsetting economic improvements.”

To protect drivers who are insured, car insurance companies offer uninsured motorists (UM) coverage, which provides compensation for injuries and property damage caused by someone without car insurance or a hit-and-run driver. Underinsured motorists (UIM) coverage, meanwhile, pays for repairs and medical bills that exceed the at-fault driver’s limits.

Twenty states mandate UM coverage, but only six require drivers to have both UM and UIM insurance.

Given how many drivers lack sufficient coverage, IRC vice president Vickie Kilgore said it’s a good idea to buy both, even if your state doesn’t require them by law.

“They’ll help pay for medical expenses, lost wages, and other damages that would have been the responsibility of the at-fault driver,” Kilgore said.

You should also review your own liability coverage to make sure you’re not adding to the problem.

The amount and type of insurance coverage you need depends on the state you live in, but these are the most common required elements.

UM/UIM insurance

Twenty-two states require drivers to have some sort of coverage to account for uninsured (UM) or underinsured (UIM) motorists.

• States that require UM coverage: Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Vermont, Virginia, West Virginia, Wisconsin and Washington, D.C.

• States that require UIM coverage: Connecticut, Indiana, Kansas Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, North Carolina, North Dakota, Oregon, South Dakota, Vermont, Virginia, and Wisconsin
• States that require both: Illinois, Kansas, Missouri, New Hampshire, New York, South Carolina, West Virginia and Washington, D.C. require both UM and UIM coverage. 

No-fault states may also require personal injury protection (PIP) or medical payment (MedPay) coverage, both of which cover medical expenses for you and your passengers after an accident, regardless of who is at fault.

• States that require Personal Injury Protection: Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon and Utah. (Arkansas, Kentucky, Maryland, Texas, Washington, and Washington D.C. offer PIP as an optional add-on).
• States that require MedPay: Maine, New Hampshire and Pennsylvania.

State minimum liability insurance

All U.S. states (with the exception of New Hampshire) require a minimum amount of liability car insurance. Each sets its own minimum rates: In New York, for example, the minimum is $25,000 in bodily injury liability per person, $50,000 in bodily injury liability per accident and $10,000 in property damage liability per accident.

This can also be expressed as “25/10/10.” Here are the minimum limits in all 50 states

Meeting these requirements will allow you to drive legally, but they’re not adjusted for years at a time and often don’t account for inflation in both medical expenses and auto repairs.

As a result, minimum liability coverage can easily be insufficient to protect your assets if you’re found responsible for a collision. As a good rule of thumb, you should have enough insurance to cover your net worth, or the sum of your assets minus your debts and liabilities.

If you have a particularly high net worth, consider an umbrella insurance policy, which can increase your overall liability coverage to $1 million or more.  

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