Remember when you got the keys to drive your first car? You probably just passed your driver’s test. With a newly issued license nestled in your wallet, you were raring to go.
No matter if you’re starting to drive at 16 or 26, it’s a known fact that before you get behind the wheel, you need car insurance. Almost every state in the U.S. requires that you have a car insurance policy.
Here’s what you should know about the consequences of driving without insurance:
Are there state laws about driving without insurance?
Note: There are a handful of exceptions to mandatory liability insurance.
For instance, New Hampshire doesn’t have a liability insurance law. However, it does require that, if you’re “at-fault” in an accident, you must have ample funds to cover the damage.
In the state of Virginia, you have to have insurance. However, if you have an uninsured vehicle, you can register it for a significant fee on top of your regular registration fees. In Virginia, if you’re at-fault in an accident, you’ll be on the hook to pay for any damages or injuries.
Should you be at fault, auto liability insurance will cover any damage or injuries incurred by the other driver. This could include medical bills, car repair bills, and related costs.
What are the consequences to driving without insurance?
Despite it being the law, there are a number of uninsured motorists on the road.
According to a study by the Insurance Research Council (IRC), the total number of uninsured drivers in the U.S. is roughly 13 percent. We’re talking every one in eight drivers.
If you’re looking at them by state, Florida had the largest percentage of uninsured motorists at 26.7 percent. Maine had the lowest at 4.5 percent.
You should not be driving uninsured. Car insurance can get expensive, but you shouldn’t risk driving without insurance if you can’t afford to pay your premiums. There are several ways to lower the cost of car insurance.
If you’re caught driving without car insurance, the consequences are severe.
We’re talking fines, which can be to the tune of up to $5,000, suspending or revoking your driver’s license or registration. Your license plate might get confiscated, your vehicle seized. You could even go to jail.
What happens if you get into an accident without insurance?
It’s bad news for you if you drive uninsured and you get into an accident.
About a dozen states have a “no pay, no play” law. This means if you’re driving uninsured, you can’t sue for damages that aren’t of financial nature. This would be for things such as pain and suffering.
Let’s say you’re in Michigan and are driving without insurance. If you get into an accident and are at least 50 percent at fault, you can’t collect on noneconomic damages.
In Louisiana, uninsured motorists need to pony up the first $10,000 in property damage and $10,000 in out-of-pocket medical expenses. This has to happen before any suing of the other party can take place.
How you can protect yourself if an uninsured driver hits you
On the flip side, let’s say you have sufficient and proper car insurance. If you get into an accident with an uninsured driver, you could be on the hook and suffer a substantial blow to your finances.
That’s where uninsured motorist coverage comes into play.
Whereas several states require that you tack uninsured motorist coverage to your car insurance policy, you might want to purchase it to err on the side of caution.
This serves as liability insurance that will cover your medical bills, damage to your car, and possibly other related costs, such as lost wages and legal fees.
What are the types of uninsured/underinsured motorist coverages?
It depends on which state you live in, but there are three main types of uninsured or underinsured motorist coverage:
Uninsured motorist bodily injury coverage (UMBI): This covers you and your passengers’ medical bills and lost wages if you get hit by an uninsured motorist. It can also cover your medical bills and lost wages if you get hit as a pedestrian or in a hit-and-run accident.
Uninsured motorist property damage coverage (UMPD): This only covers damages to your car and property. This includes your house, fence, and any valuable lawn ornaments. Not all states offer this, so you’ll want to check with the insurance company.
Underinsured motorist protection (UIM): Let’s say the driver who is at fault carries liability insurance. Unfortunately the coverage isn’t enough to cover all damages to your car. In this case, underinsured motorist protection will pay for the difference.
Uninsured motorist coverage kicks in only if the other driver is at-fault, and either doesn’t have insurance, or is underinsured.
An exception is if you live in a state that has a no-fault law. If that’s the case, you don’t need to figure out which party is at fault for a liability policy to cover your injuries.
What else can I do after I’ve been hit?
Of course, unless it’s a hit-and-run, you should follow proper protocol.
Jot down each other’s driver’s license numbers and insurance information. Note the make, model and year of the car, as well as the license plate.
Snap photos of everything, including damage to both vehicles. If you can, file a police report.
How to get insurance after you’ve been uninsured
If you have a lapse in coverage , your rates will be higher. The longer the gap in being uninsured, the more your rates will spike.
Let’s say it’s been five years since you’ve had insurance. In that case, on average the premium is $216 higher.
A lapse in insurance is anywhere from 30 to 60 days. If you’re deployed in the military and are leaving the country for a period of time, you can have your insurance suspended. This isn’t considered a lapse.
And when you lapse on your car insurance, insurers consider you to be a higher risk. It’s a sign that you aren’t able to afford your payments, or your last insurer decided to cancel or not renew your policy.
If cost is a concern, some states offer low-cost policies. These policies offer lower coverage for an affordable price. As long as you meet the requirements, you can apply for one of these policies.
For example, California’s Automobile Assigned Risk Program requires drivers to be at least 16 years old, have a low income, and own a vehicle that’s no greater than $25,000 in value.
Remember: you should never let your insurance lapse or cancel your policy if you still plan on driving. It’ll benefit you in the long-run to avoid driving without insurance.