Who really pays the toll for uninsured drivers?

The percentage of uninsured drivers climbed to 14% in 2022, up from 11% in 2019. This increase has been linked to the economic hardships brought on by the COVID-19 pandemic, with more individuals opting out of insurance coverage due to financial constraints.

Recently, The Wall Street Journal brought this data to consumer market news, exposing a trend posed to create significant challenges for everyday consumers. The team at MeasureOne dives further, recognizing the additional risk associated with uninsured drivers for businesses, illustrating that the impact of uninsured drivers is just two sides of the same coin.

The broader impact on consumers

The increase in uninsured drivers affects more than just the drivers themselves. When these drivers are involved in accidents, the financial burden often shifts to insured motorists, resulting in higher premiums for everyone. The average annual cost of full-coverage car insurance has risen to $2,278, a 12% increase from 2023. This rise in premiums can be attributed to the reduced premium pool as more individuals forgo insurance, forcing insurers to adjust their rates to cover potential losses.

From the Journal, John Mesirow, a personal injury lawyer in Washington, D.C., highlights the difficult choices many Americans face: “But if you have to choose between paying rent and getting food and car insurance, it’s obvious what you’re going to pay for.” This sentiment echoes the harsh realities of economic hardship, where insurance becomes a secondary priority.

The risks for businesses

For businesses, particularly those in the gig economy and for companies that rely on protected assets, the implications of uninsured drivers are profound. The use of personal vehicles for commercial activities often falls outside the scope of standard personal insurance policies. This gap in coverage can lead to significant legal and financial risks for companies if their drivers are involved in accidents without adequate insurance.

“Gig companies [especially] face major risks when their drivers use personal vehicles without the right insurance coverage,” MeasureOne’s Head of Insurance, Matt Donovan, explains. “Specialized insurance for these drivers is more and more common so ensuring that drivers have that commercial auto insurance or additional coverage options tailored to their specific activities is crucial. It protects drivers and their employer from potential consequences. And, probably most importantly, it upholds safety standards and maintains customer trust.” 

To mitigate these risks, it is essential for businesses to verify that their drivers maintain appropriate insurance coverage, which, as Donovan describes, includes highly specialized commercial auto insurance, rideshare insurance, or cargo insurance, depending on the nature of the work. 

Automated auto insurance verification provides a solution for ensuring compliance and reducing liability.

How businesses can embrace automated auto insurance verification

Automating auto insurance verification simplifies the process of obtaining proof of auto insurance for drivers and eliminates the risk of uninsured or under-insured drivers. Plus, it brings numerous benefits to drivers and the companies that rely on their services including:

• Easier employee onboarding: For gig companies, automation allows integrated verification via API within an onboarding flow to instantly gather and verify the auto insurance for prospective employees. 
• Re-verification of auto Insurance and auto insurance monitoring: Using scheduled, automated API queries and notifications, periodically and regularly check the status of employees' insurance coverage. If coverage lapses or changes, be updated and take action immediately.
• Fraud mitigation and reduced risk: Analyze historical data and identify patterns indicative of insurance fraud using automated primary source data. 

And luckily, MeasureOne is here to help.

Automated auto insurance verification from MeasureOne

The rise in uninsured drivers is a complex issue with far-reaching implications for both consumers and businesses. As the number of uninsured motorists continues to grow, the associated financial and legal risks are apparent. 

By leveraging automated auto insurance verification, like the solution from MeasureOne, businesses can protect themselves from the liabilities associated with uninsured drivers. 

Protect your business and stay ahead of the curve by understanding the importance of auto insurance verification and implementing the necessary tools to safeguard your operations.