18 Million Americans cannot Afford Auto Insurance

18 million Americans cannot afford auto insurance data, from the Federal Insurance Office indicates.

There are 800 zip codes in the United States were at least half the population cannot afford to insure their wheels, The Allen Call Morning reported. That determination was based on The Study of Personal Automobile Insurance Affordability prepared by the United States Treasury Department.

Around 1.1 million people in Pennsylvania alone have trouble paying for car insurance, The Call noted. There were 35 zip codes in Pennsylvania where auto-insurance affordability was an issue.

The State of Auto Insurance in America

Some highlights of the study include:

  • The most expensive insurance was in Michigan, where the average person pays $2,738 a year to cover a vehicle.


  • The cheapest coverage was in Maine, where the average resident paid $808 a year for car insurance.

  • The average American family spends around 2% of its income on car insurance.


  • The states with the highest numbers of people struggling with insurance affordability were New Jersey, Michigan, Texas, Florida, and Pennsylvania.


  • There were three states; New Mexico, Alabama and Mississippi, where more than 25% of the population had no auto insurance.


  • There were three other states; Florida, Oklahoma and Tennessee, where between 20% and 25% had no auto insurance.

  • There were 11 states; Colorado, Texas, Arizona, Nevada, California, Washington state, Arkansas, Illinois, Kentucky, Ohio, Michigan, Montana and Wisconsin where 15% to 20% of the population lacks vehicle insurance.


  • There 13 states; New Hampshire, Delaware, Maryland, North Carolina, Georgia, Louisiana, Alaska, Hawaii, Missouri, Kansas, Iowa, Minnesota and Oregon, where 10% to 15% of the population lacked car insurance.


  • There were only two states; Maine and Massachusetts, where less than 5% of the population lacked auto insurance.


  • Most Americans live in states where more than 10% of the population is driving without insurance. That’s bad news because uninsured drivers raise insurance rates. Rates go up because insurers have to charge the insured from damage and injuries caused by the uninsured.

Why Insurance Rates are so High

The major reason why insurance rates are so high is state laws. States with so-called no-fault insurance like Michigan and Pennsylvania; have some of the highest rates. Under no-fault all individual drivers cannot be held accountable for accidents so rates rise. Everybody ends up paying for the damage caused by bad drivers whose destructive habits are effectively subsidized by responsible citizens.

The Treasury Department hopes the report will encourage politicians to take steps to cut insurance rates for Americans. One step Congress could take is to use its power under the commerce clause of the Constitution to ban no-fault auto insurance.

Another would be to implement real national health; or single payer health-insurance if and when Obamacare is repealed. After state laws, the biggest factor that drives up auto premiums is the cost of paying for treatment of injuries from car accidents. If the government would absorb that cost, auto premiums for average Americans would go down.

The Treasury Department’s Office of Insurance should be congratulated for preparing this report. Hopefully the geniuses in our state legislatures and Capitol Hill will pay attention to it. If they don’t perhaps it is time to throw those bums out.

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