Driving Without Car Insurance: What Happens?

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Nearly one in eight drivers do not have car insurance, according to a 2021 report from the Insurance Research Council. Joining this not-so-exclusive club is a terrible idea.

Not only will you face legal consequences, such as fines and even jail time, but you’ll also face insurance consequences. And 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.

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. One less-than-practical way to satisfy financial responsibility is to fork over a bond with the state that can run upwards of $50,000. But the easiest and most affordable way to satisfy financial responsibility is to buy car insurance.

Every state requires a minimum amount of liability car insurance (even New Hampshire and Virginia under certain conditions). And if you get caught driving without car insurance, chances are you are going to feel some financial pain.

Consequences of Driving Without Insurance

Driving without insurance can land you in legal hot water. Here are some of the consequences you could face:

  • Fines. If you get caught driving without car insurance, at the very least, you can expect a fine that can run anywhere from $100 to $1,500, depending on your state.
  • License suspension. In some states, your license will be suspended and may not be reinstated until you get car insurance. In other states, the suspension can be more harsh. For example, if you don’t have car insurance and cause an accident in New York, you could lose your license for up to a year.
  • Vehicle registration suspension or revocation. Driving without car insurance could mean losing your vehicle registration. For example, in Massachusetts your vehicle registration will be suspended indefinitely until you provide proof of insurance.
  • Vehicle impoundment. In some states, such as California, your vehicle could be impounded if you get caught driving without insurance.
  • Fees. If your license is suspended, registration revoked or your car is impounded, you will have to pay fees to resolve those problems.
  • Jail time. Yes, driving without insurance can land you in jail. Most states won’t impose jail time for first time offenders, but some do. For example, in Michigan, if you drive or allow someone to drive your uninsured car, or drive a car that you know does not have no-fault insurance, you could spend up to one year behind bars.

If you don’t learn your lesson the first time around, the legal consequences can get more severe. Second and subsequent offenses will typically result in stiffer penalties, including steep fines and an increased likelihood of facing jail time.

Driving without car insurance can also hit your wallet hard. Here are a few insurance consequences you might face:

  • Higher auto insurance rates. If you drive without insurance, you’ll have what’s called a “coverage gap.” Insurers see drivers with a coverage gap as a higher risk to insure, which means you’ll be paying higher rates.
  • Car repair bills. If you cause a car accident without insurance, you won’t have coverage for car repair bills for your own vehicle or the other driver’s vehicle, which means you could be personally on the hook to pay for major bills, especially if the accident results in a totaled car. And if you damage someone else’s property, like a fence, you’ll be paying for that, too.
  • Medical expenses. If you cause an accident that results in injuries, you could be held liable for the medical bills. The average cost for a bodily injury claim in 2017 was $20,453, according to the National Association of Insurance Commissioners’ most recent report. If you don’t have the cash to pay up, you could be sued, putting your assets, savings and home at risk.

Related: What exactly can be taken from you in a lawsuit?

Examples of State Penalties for Driving Without Insurance

How Much Will My Insurance Go Up if I Get Caught Driving Without Insurance?

Drivers with a coverage lapse pay an average of 18% more than drivers with continuous coverage, a Forbes Advisor analysis found.

Here’s a look at car insurance rate differences for those without a coverage gap and those who were caught driving uninsured.

What Happens if I Get into an Accident Without Insurance?

If you cause an accident and don’t have car insurance, you may have to pay for the damage out of your pocket. You could also get sued if you don’t pay.

Police will likely charge you with driving without car insurance. You could face a hefty fine, license suspension and even jail time, depending on the state.

Once you buy car insurance, you will probably pay much higher rates for coverage. The at-fault accident and not having coverage are two factors that generally mean higher car insurance costs.

These are all reasons why maintaining car insurance coverage is critical to your finances.

How to Get Car Insurance If You’re Uninsured

You should be able to find a car insurance policy—even if you haven’t had coverage. You will pay more for coverage and some insurers may decline to cover you, but it’s possible to get car insurance if you’ve been driving without it.

Our analysis of 10 major car insurance companies found that the average cost for a driver charged with driving without car insurance is $1,851 a year. That’s nearly $300 a year more the cost for good drivers who have had continuous insurance.

Geico and USAA are two insurers to check out if you’ve been charged with driving without insurance. Both charge less than $1,400 a year on average for those drivers. USAA auto insurance is available only to those with a military affiliation.

Compare car insurance quotes from multiple companies, ask about discounts and compare quotes for the same level of coverage. By getting quotes from at least three insurance companies you can get a sense of what a good deal is.

Tips to Avoid Penalties for Driving Without Insurance

Driving without car insurance isn’t a wise decision. Here are some ways to make sure it doesn’t happen to you.

Pay your car insurance bill on time

You may lose coverage if you don’t pay your bills by the due date. Some insurance companies have a grace period so check with your insurer if you’re late on payment.

Make the payment promptly to avoid losing your coverage.

Be careful when changing car insurance companies

It can be wise to switch car insurance companies if you find a better rate, but make sure you go about things the right way.

One possible mistake when changing companies is not taking into account an insurance gap. Make sure your new policy is scheduled to take effect as soon as your old policy ends.

Let your insurer know if you no longer want coverage

If you’re changing companies, make sure to notify your current insurer. Stopping payments can lead to late fees and having your record show that you stopped paying.

Driving Without Insurance FAQ

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