This study, mandated by Senate Bill (SB) 2137 (Robbins), attempts to quantify the extent of the uninsured motorist (UM) problem in California. Additional objectives are to calculate the total costs incurred by insured motorists as a result of accidents caused by UMs, and to estimate the average premium cost for legally required liability insurance to an insured motorist. The rate of UMs from 1988 through 1990, the cost to insured motorists for accidents caused bu UMs for 1988 through 1989, and the average cost of legally required liability insurance for 1988 through 1989 are estimated, and the following conclusions are drawn: (1) The rate of UMs in California decreased slightly during the years from 1988 through 1990, from 25% or slightly less, to a percentage in the lower twenties. The extent of the decrease varies with the method used to estimate the rate, but both approaches used in this study did show decreases. Although it is not possible to ascribe causality as many factors could cause changes in the rate, these were the years in which SB 850 was in effect. (2) UMs were most prevalent in the Los Angeles Metropolitan Area, especially in the city of Los Angeles, and the Central Valley. This is consistent with findings elsewhere that UMs are disproportionately prevalent in the urban cores of large metropolitan area and in rural areas. (3) UMs place a substantial financial burden on insured motorists. The cost to insured motorists of accidents caused by UMs was almost $2.1 billion in 1988 and approached $2.4 billion in 1989. Aside from the UM problem, the average cost of legally required liability insurance, which covers the effects of accidents caused by insured motorists and which should therefore not reflect the rate of UMs, increased by about 7% from 1988 to 1989. This is 40% larger than the increase in the California Consumer Price Index (5%) for these years. (A)
Abstract