The Number of Uninsured Drivers in South Dakota Doubled in 6 Months. Here's Why

There are more and more uninsured drivers on America's roads. Recent research from J.D. Power shows a sharp uptick in the number of people driving without insurance. It's more pronounced in certain states, particularly South Dakota -- which now has double the number of uninsured drivers than it did six months ago.

South Dakota's dramatic increase in uninsured drivers

In the second half of 2022, 3.3% of people on South Dakota's roads were uninsured. That jumped to 6.8% by the first half of 2023. The data company doesn't break down the numbers, but some back-of-the-envelope calculations show that translates to around 44,000 uninsured drivers in the state. (The U.S. Department of Transportation says there are around 650,000 licensed drivers in the state.)

What's driving the change? Essentially, it's a combination of skyrocketing auto insurance premiums and budgets that are already stretched to breaking. Sadly, as J.D. Power points out, "American insurance customers have had to make the difficult choice between their monthly budget and peace of mind on the road."

Research by The Ascent shows the average cost of auto insurance nationwide was around $3,000 last year, which works out at about $250 a month. The average annual car insurance premium in South Dakota was $3,217. That's a good chunk of a lot of people's budgets.

The rising cost of auto insurance

I don't know about you, but I'm tired of news about how much living costs have risen. It's not news -- we all live and breathe the higher prices every time we go to the store. Even so, auto insurance costs have gone to the moon.

According to the Bureau of Labor Statistics' Consumer Price Index, car insurance in December 2023 was over 20% higher than the year before. That's on top of a 14% jump from 2021 to 2022. So if your annual auto insurance cost $1,500 in 2021, it might have risen to $1,710 in 2022 and $2,052 in 2023.

What's worse is that J.D. Power says auto insurance companies still paid out more than they brought in through premiums last year. Cars are increasingly high-tech, which makes repairs more expensive. Throw in climate change, inflation, and labor shortages, and the soaring premiums start to make sense. It doesn't make them any less painful though.

The risks of driving without auto insurance

If you've thought about skipping car insurance because of the high costs, J.D. Power's report shows you're not alone. The trouble is that driving without insurance can prove costly too. If you are in an accident, StormWise estimates the average auto repair costs at between $50 and $2,500 or more. A more serious collision could run to $10,000 or more in damages.

There's also a risk of getting caught. For example, drivers in South Dakota need to show proof of financial responsibility, which most people do through car insurance. According to the South Dakota Department of Public Safety, you could be fined $100 and/or face 30 days in jail if you fail to do so. Your driver's license may also be suspended.

How you can reduce your auto insurance premiums

If you're worried you can't afford your auto insurance bill, take these steps to reduce your premiums:

• Increase your deductible: Your deductible is the amount you pay before the insurance money kicks in. Raising your deductible means you'd have to pay more out of pocket if you do make a claim, but it can also lower your monthly rate. Consumer Reports estimates that you can lower your annual premiums by $400 to $500 this way.
• Shop around for a lower rate: Every insurance company is different, so it's worth rate shopping each year to see if you can get a better deal. You might also try to negotiate with your current insurer to see if you can reduce your bill. Check out our ranking of car insurance companies with the best rates today.
• Bundle your home and car insurance: If you buy more than one type of insurance from the same company, you can score significant discounts. For example, Allstate's website says customers can save up to 25% by bundling their home and auto insurance together.
• Show your insurer how well you drive: Many insurers will give you a discount if you sign up to their telematics or usage-based car insurance. The company will monitor your driving via a mobile app or device that's installed in your car, and reward you financially for safe behaviors. For example, USAA offers a 10% discount when you enroll in its SafePilot program, and up to 30% off for drivers the program shows to be lower-risk.

Key takeaway

When money's tight, it might be tempting to roll the dice and save money by driving without insurance. Unfortunately there can be significant legal and financial consequences to driving uninsured. Don't take that risk. Instead, look for ways to reduce your auto insurance and see if you can bring in extra cash or save money elsewhere.