Independent insurance agents have an opportunity to help educate and protect the public’s financial security as well as gain more business. This can be accomplished by alerting the public — using the agency’s social media and other communications assets — to highlight an increasing societal problem: uninsured and underinsured drivers.
Consider how often you see news stories reporting, “Driver caught driving 114 miles per hour with Blood Alcohol Content (BAC) of 0.19%,” or “3 family members seriously injured after driver goes through red light. The driver was charged with driving with a suspended license and no auto insurance.” These types of stories are daily reminders that while any driver can be involved in an accident, the most serious ones often involve someone with a history of reckless driving, driving under the influence (DUI), or both.
The latest report from the Insurance Research Council (IRC) indicates that the number of uninsured drivers has risen since the COVID-19 pandemic, from 11% in 2019 to 14% in 2022. The IRC report also illustrates how uninsured motorist rates varied among individual states, ranging from 5.9% in Wyoming to 25.2% in the District of Columbia in 2022. Other states with high uninsured motorist rates in 2022 included New Mexico (24.9%), Mississippi (22.2%), and Tennessee (20.9%).
The problem isn’t limited to uninsured drivers. It also includes underinsured drivers who caused an accident that resulted in injury costs or property damage that exceeded their liability policy limits. In 2017 the national underinsured rate was 12.6% versus 15.7% in 2022. Underinsured motorist rates varied among individual states, ranging from 5.6% in the District of Columbia to 40.9% in Colorado. Taken together, it means that 3 out of every 10 drivers have no insurance or are likely to cause an accident exceeding their insurance limits.
In addition to the physical trauma, from a personal standpoint the results from the accident can devastate an individual or a family’s finances. So how can drivers protect themselves and their family? By purchasing Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage. UM/UIM coverage can help protect drivers if they are involved in an accident where the at-fault driver either doesn’t have insurance (uninsured) or doesn’t have enough insurance to cover the full extent of the damage (underinsured).
This is the right time for your agency to highlight this issue as recent economic data indicates that consumers are increasingly stressed. The share of active credit card accounts making only the minimum payment hit a 12-year high of 10.75% from July through September 2024, according to the Q3 2024 Insights report from the Philadelphia Federal Reserve. If consumers must choose between groceries, rent or mortgage payments, or auto insurance, the auto insurance premium payment may come in last.
Don’t forget to communicate this issue to your community’s centers of influence: accountants, attorneys, and financial advisors. These professionals are well positioned to help with the educational effort, and it provides a reason to reach out with information to help them with their clients.
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