Car insurance is required in nearly every state to protect drivers on the road financially in the event of a car accident. According to the Insurance Research Council, one out of every eight drivers is uninsured. Driving without car insurance can have a number of negative consequences, particularly if you cause an accident. Although the penalties vary by state, you could face costly fines, licence suspension or loss, out-of-pocket costs for accident-related expenses, or even criminal charges.
Car accidents can range in severity from minor to experience greater. Most people are aware that there are consequences if you do not have insurance and cause an accident. Even if the other driver was at fault, driving without insurance can have serious consequences.
States Where Car Insurance is Compulsory
Accidents Caused by Uninsured Drivers
If you are at fault in an accident, your insurance will most likely cover accident-related damages, depending on the limits of your car insurance policy. However, if you are driving without insurance and cause an accident, you may face serious consequences and out-of-pocket expenses:
- Repair and replacement costs: You are usually liable for the damages you cause. This includes repairing or replacing any vehicles or property that you have damaged.
- Medical expenses: If the other driver, their passengers, or anyone else not in your vehicle was injured in the accident, you may be liable for their medical bills.
- Legal fees: If you are unable to pay for the damages you caused, the other driver may sue you for compensation, including legal fees.
- License suspension or revocation: If you drive without insurance, most states will likely suspend your licence. Your licence may be revoked if you have previously been caught driving without insurance.
- Forms required: Before reinstating your licence, some states may require you to have an SR-22 or FR-44 on file with your DMV. These forms demonstrate to the state that you have auto insurance coverage. Because these forms are filed directly by insurance companies, you will need to obtain car insurance at this point.
- Vehicle impoundment: If you were driving without insurance, the officer on the scene may choose to tow your vehicle.
- Fines: If you were caught driving without insurance, you may have to pay a fine, which may be higher depending on the circumstances of your accident.
- Jail time: While a first offence may not result in jail time, multiple incidents of driving without insurance may result in jail time.
- Insurance is more expensive: Insurance companies consider drivers who have been in accidents, as well as those who have had a lapse in coverage, to be higher risk. This means you’ll probably have to pay more for insurance than the average driver.
Although some drivers have medical payments or personal injury protection (PIP) coverage to help cover medical costs, if you are found to be at fault for the accident, the injured party or their insurance company may seek reimbursement from you. However, because some states are considered no-fault states, it is a good idea to speak with an insurance professional to understand what you may be liable for in an accident if you do not have adequate coverage.
Non-Fault Accidents Without Insurance
Even if you do not cause an accident — for example, if you are rear-ended by another driver — not having insurance can cause problems.
- License suspension or revocation: You could lose your licence even if you were not the at-fault driver. If the police are called, your state will almost certainly require you to show proof of insurance. Your licence may be suspended if you are unable to do so.
- Fines: If your state fines drivers who fail to obtain insurance, you may be required to pay the fine even if you did not cause the accident.
- Vehicle impoundment: Once again, if a law enforcement officer discovers that you were driving without insurance, they may decide to impound your vehicle.
- Out-of-pocket expenses: Vehicle damage does not always result from road collisions. For example, a tree limb could fall on your car, or your car could be stolen. If you do not have an insurance policy that covers your vehicle, you will be responsible for the vehicle’s repairs or replacement.
States Where Car Insurance Is Not Compulsory
Though most states in the United States require car insurance, some states do not require insurance in certain situations or have alternative options, such as bonds or deposits, for drivers to comply with state car insurance laws.
It is important to note, however, that while these states may not penalise you for not having car insurance coverage, you must still meet certain criteria. Furthermore, if you are involved in an accident or are the at-fault driver, you may still face certain consequences.
Auto accidents in which the driver is at fault
If you choose to drive uninsured in New Hampshire and cause an accident, you are still liable for the damages and injuries. If you are unable to pay for the injuries, property, or vehicle damage you cause, your licence and registration may be suspended. If you are injured in the accident, you may also be responsible for your own medical expenses.
Drivers in Virginia can choose not to purchase auto insurance and instead pay a $500 uninsured motorist vehicle (UMV) fee when their vehicle registration renews.
Your licence and registration may be suspended if you do not pay the fee and are caught driving without insurance. You may then be charged a $600 noncompliance fee, file an SR-22, and pay to have your driving and registration privileges reinstated. Virginia, like New Hampshire, requires you to pay for any injuries and damages you cause out of pocket.
In either state, if you are not the at-fault driver in an accident, the at-fault party’s insurance company will usually pay for your injuries and vehicle damage. However, if their coverage is insufficient and you do not have coverage, you may end up paying for the remainder of your medical bills and vehicle damage out of your own pocket.
If you fail to meet either the state’s insurance or financial responsibility requirements, your licence and registration may be suspended, whether or not you were at fault in the accident.