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The insured, leading insurance companies to pass on costs as higher premia. Using a novel panel data set and a staggered policy change that exogenously varied the rate of uninsured drivers at the county level in California, we quantitatively investigate the e ect of uninsured motorists on automobile insurance premia. Consistent with predictions of theory, we nd uninsured drivers lead to higher insurance premia. Speci cally, a 1 percentage point increase in the rate of uninsured drivers ra.
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