Mercury Insurance Explains How Uninsured Drivers Affect Insurance Costs and How You Can Protect Yourself

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Mercury Insurance (MCY) reports a concerning trend in U.S. auto insurance, as uninsured motorists increased from 11% to 14% between 2019-2022, meaning approximately 1 in 7 drivers lack coverage. This surge is driving up costs across the industry, with policyholders collectively paying $16 billion for uninsured/underinsured motorist coverage.

The average cost of full coverage car insurance reached $205 per month as of November 2024. Mercury's VP of Auto Claims, Kevin Quinn, emphasizes that both insurers and insured drivers bear the financial burden of uninsured motorists, leading to higher premiums even for those with clean driving records.

The company recommends several protective measures, including carrying uninsured/underinsured motorist coverage, considering umbrella policies, and maintaining safe driving habits to minimize accident risks.

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• None.

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• Increase in uninsured motorists from 11% to 14% (2019-2022) raises operational costs
• Higher insurance premiums for all customers due to increased risk from uninsured drivers
• $16 billion collective burden on policyholders for uninsured/underinsured coverage

14% of U.S. Drivers Do Not Have Auto Insurance

LOS ANGELES, March 27, 2025 /PRNewswire/ -- A greater number of Americans are getting behind the wheel without auto insurance, raising costs for all drivers across the country.

From 2019 to 2022, the percentage of uninsured motorists grew from 11% to 14% according to the Insurance Research Council, which translates to approximately 1 in 7 drivers in the U.S.  According to Bankrate, the average cost of full coverage car insurance is roughly $205 per month as of November 2024. 

The increasing frequency of uninsured drivers strains insurance companies financially. When insurers are forced to cover the costs of accidents caused by these drivers, expenses increase. The burden of these increased costs is then passed on to the consumer, meaning that responsible, insured drivers have to shoulder the burden. 

In recent years, policyholders collectively paid $16 billion for uninsured and underinsured motorist coverage, per Answer Financial.

"The reality is we all bear the burden for motorists who drive without auto insurance and it's tough on both the insurer and insured," said Kevin Quinn, Vice President of Auto Claims for Mercury Insurance. "We understand that affordability is a problem, but driving without insurance not only creates a significant liability for the driver, it also exacerbates the affordability problem for everyone." 

Here are some key factors that explain how uninsured drivers affect insurance rates:

• Increased risk for insurers: When a significant number of drivers are uninsured, it raises the risk for insurance companies, as they may need to pay out more in claims for accidents involving uninsured motorists. 

• Higher premiums for insured drivers: To offset the increased risk, insurance companies raise premiums for all insured drivers, even if they have a clean driving record. 

• Impact of uninsured motorist coverage: While most states require uninsured motorist coverage, which protects insured drivers in accidents with uninsured motorists, frequent claims against uninsured drivers can still lead to higher premiums for everyone. 

• Individual impact of driving without insurance: If an individual is caught driving without insurance, their future insurance rates will likely be significantly higher because they are considered a high-risk driver. 

So, how can motorists protect themselves from uninsured drivers? There are a number of ways:

• Carry uninsured/underinsured motorist coverage: If uninsured/underinsured motorist coverage is not already included in a driver's policy, they should consider adding it. Alternatively, if it is already required by state law, it would be advisable to review the policy's coverage limits.
  
  
• Consider an umbrella policy: Causing a car accident can mean big expenses, and having an umbrella policy can offer added peace of mind. An umbrella policy provides added liability coverage when the policy limits associated with car insurance are not high enough to cover the damage. However, it may be necessary to verify whether an umbrella policy covers uninsured drivers, as some policies do not.
  
  
• Practice safe driving habits: The best way to avoid dealing with an uninsured motorist is to avoid an accident in the first place. Eliminate driving distractions and stay alert behind the wheel. 

"Auto insurance is not just a legal requirement — it's a safety net that protects you, your passengers and others on the road from the unpredictable risks of driving," said Quinn. "If affordability is a concern, there are several discounts and strategies that consumers can take advantage of to help reduce costs." 

About Mercury Insurance

Headquartered in Los Angeles, Mercury Insurance (NYSE: MCY) is a multiple-line insurance carrier offering personal auto, homeowners, and renters insurance directly to consumers and through a network of independent agents in Arizona, California, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas and Virginia, as well as auto insurance in Florida. Mercury also writes business owners, business auto, landlord, commercial multi-peril and mechanical protection insurance in various states. 

Since 1962, Mercury has provided customers with tremendous value for their insurance dollar by pairing ultra-competitive rates with excellent customer service, through nearly 4,100 employees and a network of more than 6,500 independent agents in 11 states. Mercury has earned an "A" rating from A.M. Best, as well as "Best Auto Insurance Company" designations from Forbes and Insure.com. For more information visit www.MercuryInsurance.com or follow the company on Twitter or Facebook. 

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SOURCE Mercury Insurance

FAQ

How much has the percentage of uninsured drivers increased in the US from 2019 to 2022?

The percentage of uninsured drivers in the US increased from 11% to 14% between 2019 and 2022, according to the Insurance Research Council.

What is the current average monthly cost for full coverage car insurance in 2024?

According to Bankrate, the average cost of full coverage car insurance is approximately $205 per month as of November 2024.

How much are US policyholders paying collectively for uninsured/underinsured motorist coverage?

US policyholders collectively paid $16 billion for uninsured and underinsured motorist coverage, according to Answer Financial.

What solutions does Mercury Insurance recommend to protect against uninsured drivers?

Mercury recommends carrying uninsured/underinsured motorist coverage, considering umbrella policies, and practicing safe driving habits.