Around one in eight drivers on U.S. roads (and significantly higher percentages in some states) are uninsured. If one of those drivers is you, you may be wondering what to do if you are in a collision and lack proper insurance.
Criminal Consequences of Driving Uninsured
Automobile liability insurance is mandatory in almost every state. The only state where it is optional is New Hampshire, and even there, drivers are required to prove that they can pay damages in the event they are in an accident.
The precise requirements vary from state to state, but typically, drivers must carry liability insurance that covers both bodily injury and property damage, and they may be required to buy other types of insurance, such as uninsured motorist (UM) or personal injury protection (PIP) coverage. Collision coverage, which covers damage to your car rather than that of the other party, is optional everywhere.
If a driver is caught driving without liability insurance, they are likely to face an array of criminal penalties.
In California, for instance, if you are pulled over while driving uninsured, you will likely have to pay a penalty of several hundred dollars (which could grow into the thousands for a second offense). If you are in an accident and are found to have been driving uninsured, you will also lose your license for a year and your vehicle may be impounded.
It is important to note that you will face this penalty even if you were not at fault.
In New York, if you drive uninsured, you will also face significant fines ranging into the hundreds of dollars, your vehicle may be impounded and your license suspended, and you may even be imprisoned for fifteen days.
In Illinois, you will only face a four-month suspension if you are in an accident, but you will still face significant fines.
In Texas, if you are caught uninsured, you may be fined anywhere from $175 to $350. Not only that, there is an annual driver’s license fee surcharge of $250 for all subsequent three years following the violation.
Civil Consequences of Driving Uninsured
While criminal punishment for driving uninsured are bad enough, the potential cost of damages if you are responsible for the accident may be even worse.
To understand why, we must keep in mind the basic purpose of liability insurance: Liability insurance is not meant to cover you. It is meant to cover the other driver in an accident, if you were at fault.
If you don’t have liability insurance, and you are at fault in an accident, you will have to pay the damages out of pocket, just as you would in any other lawsuit where you were found liable for causing a personal injury.
Medical bills after an accident, combined with property damage to the other party’s vehicle and effects, can be range in the tens — or hundreds — of thousands of dollars. If another person is injured severely enough, it may even climb into the millions.
Why People Drive Uninsured
Many people who drive uninsured feel that they cannot afford insurance. However, given the cost of an accident, whether or not you were at fault, it could be argued that you cannot afford to NOT have insurance. It is a cost that comes with owning a car, and if you cannot pay insurance, you cannot afford a car — so it may be worth researching ways to reduce your auto insurance costs.
Some people make a genuine mistake and allow their insurance to lapse. Insurance companies are notoriously unforgiving in these cases and will cancel your policy faster than you thought possible. Then, because insurance companies see the uninsured as a higher risk, they will raise your rates, at least temporarily, when they reinstate you.
It’s important to pay your car insurance bill on time every month, use some form of autopay, or pay it in a lump sum each year to ensure that you are never caught without insurance.
How Will Driving Uninsured Ultimately Affect You?
If you were uninsured in auto accident, or pulled over by the police, the hard fact is that you will face legal and financial consequences, as well as burdensome criminal sanctions. If you were at fault in an accident, you will also face severe civil liability.
Auto insurance (or the equivalent in financial responsibility waivers) is required to drive anywhere in the U.S. Without it, you are on the wrong side of the law, and 100% liable for your actions.