Americans Are Now Skipping Car Insurance — And the Ripple Effects Are Getting Real

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A growing share of Americans are responding to the surge in auto insurance premiums by choosing either to forgo coverage altogether or to drastically pare back policies. As premiums have surged to multi-decade highs, industry experts warn that consumers’ decision to forgo coverage could ripple through the insurance market and put millions of motorists at financial risk.

Recent reporting from Bloomberg highlights an underexplored consequence of the broader affordability squeeze: more U.S. drivers are skipping traditional car insurance to save money. Although full details of the Bloomberg newsletter are behind a paywall, social posts and industry observations confirm that spiraling costs are the primary driver of this trend.

Auto insurance in America is no longer a modest annual bill. Surveys and industry data show that the national average cost for full coverage has climbed steeply, leaving many households feeling financially squeezed. According to industry analysts, premiums have risen sharply over the past few years, with rate increases faster than almost any other car-ownership expense. Data from one source shows insurance prices rising at nearly 20% annually in late 2025, with total increases since 2021 exceeding 35%.

Another consumer survey found that many drivers are now considering reducing coverage or dropping it entirely in response to affordability pressures. One nationwide poll cited by insurance industry outlets noted that the average annual premium hovered above $2,300 and a significant share of drivers consider insurance unaffordable.

This financial pressure is mirrored in personal finance data: nearly 27% of Americans lack emergency savings to cover even a typical insurance deductible, underscoring how tenuous many households’ budgets have become.

Concerning the rise in drivers choosing to forgo insurance, long-running data shows the trend has been building for years. In 2022, about 14% of U.S. motorists had no insurance at all, meaning roughly one in seven drivers on the road were completely uninsured. More recent analyses go further: when you factor in drivers who technically carry insurance but don’t have enough coverage to handle even a moderate crash, the share of uninsured and underinsured motorists jumps to about one in three (33.4%), based on figures reported by Carrier Management.

And the picture continued to worsen in 2023, when the nationwide uninsured-motorist rate alone climbed to roughly 15.4%. The state-by-state breakdown shows even sharper disparities, with Mississippi approaching 28.2% uninsured drivers and Washington, D.C. topping 23%, illustrating how economic pressures are pushing millions off the insurance rolls entirely or leaving them seriously underprotected.

Experts attribute these increases not only to rising premiums but also to broader economic pressures that have tightened household budgets, especially for lower- and middle-income drivers who may see outlays for insurance as expendable in the short term.

The implications of rising uninsured driving stretch well beyond the individuals who drop their policies. When an uninsured motorist causes a crash, insurers end up absorbing more of the financial burden, and those losses are ultimately redistributed across the system in the form of higher premiums for everyone else. Industry reports note that the growing share of uninsured drivers has already contributed to broader rate hikes as companies adjust pricing to compensate.

There’s also the direct risk exposure: drivers without insurance are personally responsible for all medical bills and property damage they cause, and the motorists they collide with may have no reliable way to recover their losses. This can turn even a minor accident into a long-term financial crisis for both parties.

The issue also reinforces economic inequality. Lower-income drivers, along with other financially vulnerable groups, are disproportionately represented among those who can’t afford coverage, leaving them with greater legal and financial exposure than wealthier motorists.

And even among people who retain insurance, many are increasingly opting for bare-minimum or underinsured policies. These stripped-down plans often fail to offer enough protection as repair costs, medical bills and vehicle values continue to climb, meaning large gaps remain even for drivers who believe they’re covered.

Some industry analysts argue that stronger enforcement of insurance mandates and financial assistance programs could help stem the rise of uninsured driving. Meanwhile, insurers and consumer advocates encourage drivers to shop around more vigorously and explore cost-saving tools like AI-assisted shopping — one recent report found that 86% of drivers would trust artificial intelligence to help them compare or buy policies to save money.

However, experts warn that without broader changes to affordability and risk sharing, including possible regulatory reforms, the trend of drivers opting out of adequate insurance could continue, with profound consequences for road safety and financial stability nationwide.