Driving without car insurance: Risks & costs involved

An active car insurance policy is one of the legal requirements in order to drive your vehicle.

In life, some risks just aren’t worth taking – and one of them is driving without a car insurance. There are serious penalties for driving without it.

And in this article, we take a look at what could happen if you get behind the wheel without a car insurance. Let’s break down what happens if you are pulled over with no insurance.

Risks and penalties for driving without car insurance

According to a 2021 report from the Insurance Research Council, nearly one in eight drivers do not have car insurance. However, it’s a terrible idea joining this not-so-exclusive club.

Police have access to cameras that can recognize your license plate and determine if you have insurance. If you are suspected of uninsured driving, you will be pulled over and asked to provide proof of valid insurance within 7 days.

Those who fail to prove they had insurance at the time of their pull over could face fines, points on your driver’s license, or a ban from driving. The fines and fees are more costly than car insurance premiums. Driving without car insurance can lead to even jail time.

If you cause a car accident that results in property damage or injuries when you’re driving without car insurance, the financial fallout can be devastating.

Other potential consequences of driving without a car insurance apart from a costly ticket include license suspension, a lack of financial protection in the event of an accident, and even denial of insurance coverage if you’re involved in a car accident and you are deemed not-at-fault.

Almost every state in the United States — even New Hampshire and Virginia under certain conditions — require people by law to carry auto insurance if they have a vehicle registered in their name. In 49 states and the District of Columbia, a minimum amount of auto insurance is required by law. In New Hampshire, it is required under certain conditions. The consequences of not doing so vary from state-to-state.

Every state has some form of “financial responsibility” law, meaning you must have a way to pay if you or someone driving your car causes an accident. The easiest and most affordable way to satisfy financial responsibility is to buy car insurance

Being caught without car insurance can also have an impact on the cost of future premiums you take out.

Benefits of driving with car insurance

Driving with a car insurance reduces you incurring financial risks because in exchange for paying a premium, you are shifting those risks to the insurer.

When an insured object or person is harmed, the insurer pays for the financial damages.The insurer agrees to pay the losses covered and outlined in your policy.

Driving with a car insurance provides a safety net, not just for you but it also provides coverage for someone not in your policy when driving your car with consent.

What is covered by a basic auto insurance policy?

Different states in the U.S have different mandates for auto insurance, however, most basic car policies consist of six types of coverage:

Property damage liability

This coverage pays for the damage that you (or someone driving the car with your permission) may cause to someone else’s property, including damage to lamp posts, telephone poles, fences, buildings or other structures your car hit.

Collision

Collision coverage pays for damage to your car resulting from a collision with another car, an object, such as a tree or telephone pole, or as a result of flipping over. It also covers damage caused by potholes.

Bodily injury liability

This coverage applies to injuries that you, the designated driver or policyholder, cause to someone else.

Medical payments or personal injury protection (PIP)

This coverage pays for the treatment of injuries to the driver and passengers of the policyholder’s car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.

Comprehensive

This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object. Comprehensive covers events such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer. It will also pay to repair your windshield if it is cracked or shattered.

Uninsured and underinsured motorist coverage

Underinsured motorist coverage reimburses you, a member of your family, or a designated driver if one of you is hit by an uninsured driver or a driver who doesn’t have sufficient insurance to pay for your total loss. This coverage also offers protection in the event a covered driver is the victim of a hit-and-run or if, as a pedestrian, you are struck by an uninsured or underinsured motorist.

What to do if you can’t afford insurance

If you are driving a motor vehicle, it is your responsibility to have insurance. Look for offers from different companies, especially those with discounts. Some states, such as California and New Jersey, offer affordable auto insurance options.

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