The Consequences Of Driving Without Insurance

Is it illegal not to have car insurance? 

Yes, it is illegal to drive without insurance in most states. However, a few states offer you the chance to be self-insured. To be self-insured, you must deposit cash or post a surety bond with your state's treasury. This amount is typically equal to the state's individual liability limits which can be in the tens of thousands of dollars. As such, self-insurance is not available as an option for most average citizens.

If you cannot produce proof of insurance or a state-posted bond while driving, you are in violation of state laws. The only exemptions to this rule are in New Hampshire and some of the more remote portions of Alaska. However, even these states can impose car insurance on drivers who have caused accidents or been convicted of serious offenses such as a DUI or a hit-and-run. Also, the at-fault driver is always responsible for the damage that they cause.

For those who have a car that is no longer driven, it may be tempting to drop car insurance coverage. However, there are a number of reasons not to do this. First, if you choose to reinstate your insurance coverage, you will face a higher rate for a lapse in coverage. Second, depending on where your vehicle is parked, it may still pose a liability risk. Car storage coverage may be a better option, as you can benefit from continuous coverage and still have some protection. However, bear in mind that most insurers have strict guidelines that must be followed in order to be eligible for this coverage.

Can your license be suspended for driving without insurance?

License suspension for lack of insurance varies by state.

Listed below are the states that will suspend your license for driving without insurance. This punishment is usually coupled with a hefty fine.

Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, and Wyoming. In essence, 44 of the 49 states that require car insurance will suspend your driver's license if you're caught without proof of insurance.

What happens after a car accident without insurance

Below, we'll cover a few scenarios if you get in an accident while uninsured.

When you are not-at-fault

This varies by state and situation. Some states have what’s called a “no pay, no play” law, limiting the compensation you can receive after a not-at-fault accident if you’re uninsured. In Louisiana, on the other hand, you will receive no compensation after an accident if you’re uninsured, regardless of fault.

If fault is difficult to determine, having an insurance company on your side is beneficial. A claims adjuster or representative will speak to the other insurance company on your behalf and pursue funds to restore your vehicle to its pre-accident condition. Without insurance, you are on your own after an accident and all the financial responsibility will fall on you.

While these insurance premiums are just estimates and may considerably change based on where you live, use this data as a starting point. The best way to find cheap car insurance if you’re uninsured is to assess as many companies as possible.

If you’re an uninsured driver, enter your ZIP code below to see how cheap car insurance can be in your state.