The Persistence of Uninsured Motorists: The Impact of Undocumented Immigrants and Driver’s Licenses

The percentage of uninsured motorists has been a topic of interest to various stakeholders for decades. While the percentage has dipped slightly over the last 15 years using Insurance Research Council (IRC) data, it remains high and varies widely at the state level throughout the United States. In this study we consider a legislative trend that is expected to influence the percentage of uninsured motorists and the number of licensed drivers. Immediately following the 9/11 terrorist attacks in 2001, states restricted eligible applicants for state-issued driver’s licenses. However, over the past 12 years that trend has reversed, with an increasing number of states now allowing undocumented immigrants to become licensed drivers. This study analyzes the impact of this legislative change on the uninsured motorist rates. Our research also uses updated data from the IRC’s 2021 Uninsured Motorist study. In all our model specifications, the effect of the undocumented immigrant-to-population ratio significantly increases the uninsured motorist rate. The test for the structural change in the data indicated that there was none with respect to states offering driver’s licenses but there was for states that did not offer the same privileges. [Key words: uninsured motorists, regulations, undocumented immigrants, driver’s licenses, unauthorized immigrant license policies].