Name: Why state insurance minimums may not save you
Uploaded: 2026-01-20T17:50:08.447Z
Duration: 2 min 10 s
Description: Rising costs leave many drivers and homeowners underinsured, exposing them to massive bills when disasters, accidents, or theft strike.

Rising costs leave many drivers and homeowners underinsured, exposing them to massive bills when disasters, accidents, or theft strike.

A growing number of Americans are underinsured as they opt for state minimum auto and home insurance policies, often due to affordability concerns. Experts warn that these minimums may not provide sufficient coverage in the event of theft, accidents, or disasters, leaving individuals with significant financial burdens.

Recent data shows the percentage of underinsured drivers has risen from 10.5% in 2017 to 18% in 2023, and similar trends are seen among homeowners. Insurance professionals recommend reviewing and potentially increasing coverage to avoid unmanageable debts after a loss.

Why state insurance minimums may not save you

like many drivers, Bernice Evans chose to carry the minimum auto insurance requirement for her state had liability because I couldn't afford full coverage. But in 2024 she says her vehicle was stolen and later totaled. Come over here. They're taking both of my car keys went out my door and stole my vehicle. She was left with no money towards a new vehicle. My heart on money for that car. Personal injury attorney Rusty Reynolds warns too many drivers are an accident away from financial collapse. So many people don't carry insurance and those that do carry insurance carry the minimum. And so that's the horror story of when you have wrongful death of a wage earner that turns their life upside down. Every state sets minimum limits that drivers must purchase. But someone becomes underinsured when limits are not high enough to pay for all of the damage. They're left with a huge debt that they'll never be able to pay in their in their lifetime or their child's lifetime. The Insurance Information Institute found the number of underinsured drivers jumped from about 10.5% in 2017 to 18% in 2023. The research cites higher premiums and worsening affordability and warns of the potential increase of more uninsured drivers. Nerd wallet insurance expert Kaz wider explains. The more people go uninsured, the higher premiums will be for other drivers because there's a larger risk that you're going to get into an accident with someone who's uninsured and your insurance company might have to absorb some of those costs. In a survey by insurance company kin, 18% of homeowners say they are underinsured, meaning their current policy doesn't provide enough coverage to fully replace or repair their home in the event of a loss. Following the devastating Marshall fire in 2021, the University of Colorado Boulder found 74% of the policyholders who filed claims were underinsured. The impact can be felt nationwide. When an insurance company has to pay out for a natural disaster like this, it can impact the insurance rate of all policyholders. When considering your home or auto policy, Reynolds encourages everyone to talk to an insurance agent to ensure you're properly covered. Just a little bit more can make a world of difference. More Barrett Scripps News Group Denver.

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