Most states require minimum levels of certain auto insurance coverages. It is illegal to drive without it. Auto insurance policies cover you for any injuries or damages that others cause. If you are involved in an accident, auto insurance can protect you from financial ruin. Despite this, the Insurance Information Institute (III), estimates that more then 12 percent drivers were not insured as of 2019, which was the latest year for which data is available.
Car accidents that are not insured can have a variety of consequences depending on how severe the accident was , where you live and whether you were the cause of the accident. You can make informed decisions about your coverage by understanding the consequences of an accident that you cause.
Driving without insurance
Auto accidents can be severe, ranging from minor to catastrophic. There are consequences if you don’t have insurance and cause an accident. This is something most people know. Even if another driver is at fault for the accident , driving without insurance could still lead to serious consequences.
Without insurance, at-fault accidents
Depending on what happened in the accident, you could be held responsible. Police can help determine fault. Insurance companies will also be consulted if they are called. Sometimes the fault is fairly obvious, while other times it can be a little more complex. It doesn’t matter if you are partially or fully at fault for an accident. Having insurance can make it difficult.
You could face serious consequences if you are involved in an accident while driving without insurance.
- Repair and replacement costs: Typically, you are responsible for any damages that you cause. This means that you are responsible for repairing or replacing vehicles and property damaged by you.
- Medical expenses: You will be responsible for any medical costs incurred by the injured driver, passengers, or pedestrians. This could include an ambulance ride, emergency treatment, surgeries, therapy, and many other expenses.
- Legal fees: The other driver may sue you for damages, even if you are unable to pay.
- License suspension or revocation: In most states, driving without insurance will result in your license being suspended. Your license may even be revoked if you are caught driving without insurance in the past.
- Requirements forms: Before you can reinstate your license, some states may require that an SR-22 or FR-44 form be filed with the DMV. These forms are required by some states to prove that you have the proper levels of auto insurance coverage. These forms can be used to apply for car insurance.
- Vehicle impounding: If you are driving without insurance, the officer may decide to tow your vehicle.
- Fines: Depending on the circumstances of your accident, you may be subject to a fine.
- Jail time: Although a first offense is unlikely to land you in jail for your offense, multiple instances of driving without insurance could result in your sentence.
- Higher-risk drivers are more expensive: Insurance companies view drivers who cause accidents and drivers who have had coverage lapses as being at greater risk. These two factors could result in you paying more for your policy than what the average driver pays .
While the other driver might have PIP or medical payments coverage that may pay for some of their expenses, if they are found responsible for their damages, you will still need to pay their bills. Each state has its own insurance coverages so it is worth speaking with an agent in your state to learn more about them.
Non-at-fault Accidents without Insurance
Even if you don’t cause an accident, such as a rear-end collision with another driver, not having insurance can still be a problem.
- License suspension or revocation: You could lose your license even if you weren’t the at-fault driver. Your state may require proof of insurance if police arrive on the scene. Your license may be suspended if you are unable or unwilling to provide proof of insurance.
- Fines: Even though you were not at fault for the accident, your state may impose a fine on drivers who forgo coverage.
- Vehicle impounding: Once again, a police officer might decide to seize your vehicle if they find that you are driving without insurance.
- Vehicle damage can also be caused by collisions with other vehicles. For example, a tree limb might fall on your vehicle or your car may be stolen. You will be responsible for any repairs or replacement costs if you don’t have insurance.
Even if you’re not at fault in an accident, driving without insurance can cause problems.
How to get affordable car insurance
Although auto insurance is not the most exciting purchase, it is an essential part of your financial plan. While you may be able to save money by not purchasing insurance, it can cause financial ruin if you are involved in an accident that isn’t covered. There are many ways to save money on car insurance if your budget is your main concern.
Compare multiple policy quotes
Comparing quotes from different insurance companies can help you to find the right coverage at a cost that suits your needs. You can compare the coverage, discounts, and customer service scores for each company.
Ask about discounts
Many companies offer discounts at the very least. Bundling your home, condo, or renters insurance with it, driving a vehicle equipped with safety features, or signing up to paperless statements are all ways you can save money on your policy. Although you may be able view discounts for auto insurance on the company’s website (or even call an agent), it is best to speak with an agent to find savings opportunities.
Insurance premiums for safe drivers are generally lower than those of drivers who have had accidents. Insurance companies are more likely to insure you if you have been in an accident in the past. A clean record will help you avoid paying surcharges.
Raise your deductibles
You will have two deductibles if you have full coverage: one for collision and one for comprehensive. Your premium will be lower if you have higher deductibles. Your premium will be affected more by your collision deductible than your comprehensive. Higher deductibles will mean you have to pay more out of pocket in the event you file a claim for damages to your vehicle. Make sure you choose a level that is appropriate for your financial situation.
Questions frequently asked
Which is the best car insurance company?
Rates can vary from one provider to another and are dependent on many factors such as your driving record, where you live, what you drive, and the coverages you select. One person might not have the lowest rate , but another person might have the best rates . You can switch to a cheaper provider by getting quotes from multiple companies.
What happens if I am hit by another driver and they don’t have insurance?
Each accident is unique and will determine the outcome of a claim against an uninsured driver. You may be offered compensation by the driver who hit and ran you. You may need to speak to a lawyer if they refuse to reimburse you. Your own insurance could pay for your damages and injuries if you have Uninsured Motorist coverage.
Is it legal to drive without insurance?
It is illegal to drive without insurance in any state that requires minimum coverage. Some states have “financial liability laws,” which allow drivers to show that they can handle the financial consequences of an accident at fault without insurance. This usually involves a bond or personal insurance. Car insurance in these states is one of the most popular and easiest ways to comply with the law.