Auto insurance at one time in U.S. history was optional but this is no longer the case. In 48 states you are legally required by state law to carry the minimum mandatory car insurance as laid out by legislation in that state. Penalties for driving without insurance is regulated by state laws too. Only two states allow you to go uninsured, but both have other requirements you need to satisfy that it may be easier to just buy cheap liability only car insurance.
The largest risk uninsured drivers take is the financial burdens when they get into an accident with no insurance. You shouldn’t only concentrate on auto insurance costs but think what happens if you drive a car without insurance. Not only you will need to pay penalties when you get caught driving uninsured but also pay for the damages you may cause and suffer on your own.
State Penalties for Driving without Insurance
Every state has different penalties for driving without car insurance, except New Hampshire which is the only state with no penalty for not carrying vehicle insurance. Virginia allows drivers to pay a $500 Uninsured Motor Vehicle fee to avoid its state penalties for driving without auto insurance.
State penalties vary greatly across their costs to drivers that are caught with no insurance, how they police uninsured drivers and extended penalties that can apply to drivers when caught without insurance. Here is a list of every state’s penalties.
Penalties used by states for driving uninsured include:
- Fines for getting caught without vehicle insurance $50 in multiple states to a maximum in West Virginia of $5000.
- Suspension of vehicle registration and driver’s license privileges.
- Fees for reinstatement of vehicle registration and driver’s license.
- Vehicle impoundment with daily storage fees and release fees.
- Imprisonment up to 1 year (Michigan & Massachussets) with other maximums in multiple states.
- Probation upon conviction of misdemeanor.
- Community service or restitution with volunteer hours.
- SR-22, proof of financial responsibility for a period between 1-5 years
- Surrender of the vehicle’s plates that were being driven without insurance.
Multiple states also increase penalties for subsequent offenses of driving with no insurance.
Idaho with a $75 fine is the least expensive state penalty although your license is suspended until you can provide proof of Financial Responsibility (Form SR-22) and proof of insurance. Tennessee, Nebraska and North Carolina have the second lowest penalties with only $100 in fines or fees. Although Alaska does not have any fines for driving uninsured it does impose a driving suspension of not less than 90 days.
Georgia, Massachusetts, Michigan and West Virginia’s ability to imprison drivers for up to 1 year, even on first offenses is probably the harshest states for driving uninsured, especially since they all include fines and license suspensions as well. Whereas Delaware’s minimum $1,500 to $2,000 fine is the largest financial penalty by a state on a first offense.
Accident Costs without Auto Insurance
There are a couple of ways to look at the issue of driving uninsured. The first is if you were hit by an uninsured driver, but you have insurance. In no-fault states your damages under your own insurance would cover your expenses. However in ‘tort’ or at fault states you may need to sue for damages to recover all the costs of the accident. If the other driver did not have insurance, you can sue. Unfortunately, most times if the driver cannot afford automobile insurance, they also may not be in a position to pay any damages you were awarded at trial and you may spend years trying to recoup the award.
If you are uninsured in a no fault state, you may only be subject to the state’s driving uninsured penalties. However in an at fault state you will be liable for your own legal defense as well as any penalties awarded against you in a civil lawsuit. You could be liable for up to $100,000 in the worst-case scenario for settlement awards with the potential of your wages being garnished until it is paid off. Your assets could also be seized including your vehicles, investments and home.
The fact that you will be involved in 3-4 accidents in your lifetime and that 1 in 8 drivers are uninsured, you will be involved in an accident that could cost you tens of thousands of dollars if you are not properly insured.
Just having the state minimum car insurance will not be enough to cover the average settlement and you should have additional uninsured and underinsured insurance to cover these large gaps in basic insurance coverages, let alone the penalties for having no insurance coverage.
Let us provide you with multiple auto insurance quotes from different insurers to show you just how inexpensive insurance can be for the large financial protection it affords you.