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It can be tempting to skip the extra cost that car insurance adds to the price of owning a car. However, unexpected disasters can happen on the road, from a minor fender bender to a major car accident. If you get into a car accident without insurance, the consequences can be costly.
Almost every state in the U.S. requires drivers to carry a minimum amount of car insurance. This may include liability, uninsured motorist (UM) or underinsured (UIM) motorist, and personal injury protection coverage (in no-fault states). Some places to find this information include your state's Department of Transportation, Department of Insurance, and Department of Motor Vehicles website. Conveniently, when you buy insurance, most companies don't allow you to select coverages below the minimum in your state.
Insurance protects you and others financially after an accident. Without insurance, you must pay for any associated expenses yourself — this can be costly. If you don't have enough savings to cover those expenses, you risk financial hardship, such as unmanageable debt or bankruptcy. It's a peace of mind that you shouldn't neglect
States like New Hampshire and Virginia allow drivers to opt out of car insurance, but you must demonstrate proof of financial responsibility in other ways.
Alternative ways to demonstrate financial responsibility still require certain fees, which can be more expensive than buying the minimum amount of auto insurance.
Quick tip: Read our guide to the most affordable car insurance options.
Fines for driving without insurance vary widely by state but can be substantial. For example, car insurance in New York costs upwards of $1,500. In Connecticut, it costs as little as $100. Most people would rather spend the money on other things than a traffic ticket.
Many states suspend your license or registration (or both) for months if you're caught driving uninsured. Suspensions can vary widely from state to state. For example, if you get into an accident without insurance in California, your license can be suspended for up to four years. On the other hand, Georgia suspends your license for 90 days.
For most suspensions to end, you'll have to show proof of car insurance purchase, and you may have to pay a suspension termination fee.
After multiple infractions of driving without insurance, your car could be towed and impounded until you purchase the right amount of insurance. Depending on the circumstance, some states can even take your vehicle after the first offense.
If you discontinue your insurance policy without buying a new one, your insurance policy could lapse. A coverage lapse is the period between when your policy ends and when you renew or get a new one. Insurance sees lapses as a risk factor because the driver may have operated a vehicle without coverage. As a result, it can result in increased rates.
Some states enforce other penalties for driving without insurance, such as an SR-22 insurance requirement after multiple violations. Many insurers don't offer these high-risk policies. If they do, you'll see significantly higher rates.
In extreme cases (like frequent or various infractions), states enforce jail time or community service. To avoid these inconveniences, smart and safe drivers always carry car insurance behind the wheel.
One car accident can lead to medical bills, property damage, and legal fees, which can add up very quickly. Without any insurance, you're responsible for paying for those costs yourself. The average person may have to go into debt or dip into their savings to recoup their losses. This has broader implications on your financial life, like credit score damage or decreased retirement savings.
If you cause an accident without insurance, you'll have to shoulder the financial burden of all parties' medical expenses, property damage, and legal costs. With insurance, you share the liability and cost with your insurer.
The Insurance Research Council found that one in seven drivers in the U.S. drove without liability insurance in 2022. If you live in an area with high rates of uninsured drivers, this could cause issues for you. If an uninsured driver hits you, you can't go to their insurance company to settle the damages.
The solution? Uninsured motorist coverage. It protects you if get into an accident with an uninsured driver who is at fault. Some states require this coverage. But even if they don't, it's necessary for many people to have.
Shopping for car insurance?
Business Insider has reviewed the best affordable car insurance companies to help you find a policy for your budget.
What if I only drive occasionally? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
You still need car insurance, even if you only drive occasionally. Consider getting usage-based car insurance if you don't drive frequently. It can be much cheaper than traditional coverage. If you need to, get liability-only coverage (though not recommended). Some coverage is better than none.
What if I can't afford car insurance? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
If you can't afford car insurance, explore low-cost options or state-sponsored programs. Avoid driving without insurance, as it is illegal and can result in costly out-of-pocket expenses.
Can I get pulled over just for not having insurance? Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.
You can get pulled over just for not having insurance in some states that require car insurance. In others, it's usually discovered during a traffic stop for another reason.
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