The laws in 49 states require drivers to carry automobile liability insurance, yet millions of Americans drive without it. Why? Auto insurance is too expensive, at least for low- and moderate-income drivers. Given the other demands on their financial resources, auto insurance is a luxury they can't afford.
“Uninsured Drivers: A Societal Dilemma in Need of a Solution,” a March 2014 report by the Consumer Federation of America (CFA), quotes an Ohio judge who recites a familiar trope: “If you have to choose between food on the table and [required auto] insurance, people are going to put food on the table…People live month to month and they just don't have the money.”
But there are reasons to be skeptical of the notion that auto liability insurance is unaffordable for low- and moderate-income consumers. First, auto liability insurance isn't that expensive. The National Association of Insurance Commissioners calculates that in 2010, the average annual liability insurance expenditure per vehicle in the U.S. was $484, with averages for individual states ranging from $805 in New Jersey to $250 in North Dakota. Auto liability coverage can cost considerably more in some urban areas.
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