The Dangers of Driving Without Car Insurance

By Desiree Baughman
Desiree maintains insurance licensure in 46 states, and by combining years of experience as a writer and insurance professional, she delivers information consumers can easily relate to and understand. A graduate of Sweet Briar College with a diverse writing portfolio, she regularly serves as an expert source and commentator for respected outlets like CBS Money, Bankrate, and Ragan.com.

The Dangers of Driving Without Car InsuranceTimes are financially tough for many and we’re all looking to cut corners, but one area where no one should cut back is car insurance. Most states have mandated that liability insurance is the required minimum, and yet still roughly one in seven drivers on U.S. roadways are driving around without any insurance.

If you or someone you know is considering operating a vehicle without at least carrying state minimum liability limits — typically too low already to adequately protect anyone considering the costs of vehicles and medical expenses – perhaps being aware of just a handful of the dangers of driving without car insurance will scare both of you straight.

#1: Money, Money, Money – The Costs of Being Uninsured

Getting Coverage After a Lapse

Okay, so you can’t afford auto insurance premiums this year. And you couldn’t last year. Then the next year you get a job and decide to put your days of being a rebel without a cause behind you, which includes carrying continuous auto insurance.

Get ready, because your jaw is likely going to drop when you hear the prices – as soon as you’re able to find an insurance company willing to write you a policy, that is.

Close that jaw and start mumbling apologies to everyone who has already been paying high rates due to your negligence. Uninsured motorists cost insured motorists an astounding $11 billion dollars every year, so when you decide to start contributing to the risk pool again, you’ll find your lapse in coverage only offered short-term savings and that you’ll pay for it now. We know, we know. “You”, the uninsured motorist, hasn’t gotten a ticket or caused an accident when you were without car insurance. You were lucky. The amount of uninsured motorists on our roads have cost everyone – including yourself, whenever you decide to invest in car insurance – to pay extraordinary amounts for reasons which they were not even a party to.

So what kind of premiums will you face?

It’s hard to say exactly how much will rates will increase due to your coverage lapse once it’s taken into account with other factors that determine premiums. However, there have been cases of insurance premiums sometimes tripling just after one day of not carrying coverage. Once you have a coverage lapse, you’re considered “high-risk” to insurers, which means you’ll likely have to purchase coverage from what’s known as a “non-standard” insurer as you’ll be turned down for standard policies. Some companies specialize in non-standard insurance, such as The General or Victoria Insurance. Most large insurers, such as Allstate, State Farm, or Progressive, essentially have non-standard “departments,” meaning you may be able to purchase insurance from them.

This may help you understand what it means to only be eligible for coverage from a non-standard company: Non-standard coverage is designed specifically for a high-risk policyholder, which includes those who have had DUI’s, made multiple claims, have a lengthy and less than positive driving record, those who have committed felonies, and more. You may not be in the exact same rating tier as someone with multiple DUI’s, but non-standard insurance premiums are much higher than standard policies.

How long do you have to pay the price for your past decisions? Depending on other factors like your driving record, credit, and claims history, you may be able to qualify for standard coverage again once you’ve had six months of continuous coverage without any lapse at all in coverage. Even then, it will take about three years of continuous coverage to start seeing things level off.

Oh So (Many) Fines

Not only that, depending on what state you live in, you may have to pay certain fines. The Department of Motor Vehicles in most states tracks who is carrying insurance on their cars, and if they catch you without it, you’ll be fined. Some states, like Virginia, require an uninsured motorists fee of $500 if you decide not to carry auto insurance. States continue developing rigid protocol to crack down on uninsured drivers, such as Rhode Island. Come November 2014, insurers will submit records monthly to Rhode Island’s Department of Insurance. In Washington State, if you’re caught driving without coverage, it’s considered a traffic violation, and an expensive traffic violation at that, costing $450 at least. In any state, if you lose your license, you’ll probably have to pay a license reinstatement fee.

Then, as if things couldn’t get worse – and they can – you could be facing some hefty court costs and attorney fees.

Yes, Your Honor – Court Costs, Lawsuit Judgments, Attorney Fees

The words you uttered right before the clank of the jail cell echoes, all because you opted not to carry insurance. Consider reading this as the insurance version of A&E’s hit reality show, “Beyond Scared Straight.”

One perk of car insurance is that you should never need to have your day in court, dealing with tired judges and egocentric attorneys. Not only that, court proceedings can be lengthy, drawn out, and downright irritating, not to mention cost much more than the insurance policy you should have just purchased in the first place.

If you don’t carry insurance, get caught driving without it, and have an accident, you’re basically clearing your schedule for a day or two — or more if an accident is involved– in court, listening to a judge, missing work and a pay check, and dealing with your car being impounded. In some states, you may have to file for an SR-22 or FR-44, which will result in paying even more for your insurance.

What’s worse? If you cause an accident and don’t carry insurance, you could be sued for damages to the other person’s property, medical expenses incurred by the other party as a result, pain and suffering, and any incidental expenses incurred.

If you just felt relief due to the old saying, “You can’t squeeze blood from a turnip,” it’s going to be short-lived. If you can’t write a check for any judgment amounts placed against you in a lawsuit, your assets can be seized, and if they’re not enough to cover the judgment, your wages can be garnished until it’s paid off. Imagine causing an accident resulting in the death of someone, and the family and other passengers suing you for $1 million. You’d be working the rest of your life to pay off the judgment, and would never be able to have any assets until the judgment is paid. So yes, there are ways to squeeze blood from a turnip, and sacrificing your financial future just to avoid paying a few to several hundred dollars a year on auto insurance now isn’t worth it.

#2: It’s All Your Fault – Instantly and Without Doubt

Nobody wants to hear those words. However, most uninsured drivers are unaware that if they’re in a car accident and the other vehicle happens to, say, rear-end them, they could actually be held at-fault in this circumstance. Not only that, but you’ll also be fined and penalized for not carrying adequate or any insurance. So even in a traditional “0% fault” situation such as being rear ended, you could still come out losing in the end simply because you didn’t bother to invest in car insurance.

#3: It’s Criminal – or Rather, Uninsured Drivers Can Be

In some states, like Georgia, driving without insurance is considered a misdemeanor, and will be on your record forever. Anyone who views your criminal record, including potential employers performing background checks or property managers when you’re looking for a home to rent, will see it. For those whose screening policy includes checking criminal records, there’s often clear protocol in place as to how it affects the outcome and may not be negotiable. For example, an employer may have a strict rule that they don’t hire anyone with a misdemeanor, regardless of what it’s for.

This is even worse for those with commercial driving licenses. In many states, commercial licenses will be suspended, and you won’t have the opportunity to get it back. There goes your livelihood – was that worth not making your premium payments?

As expensive as car insurance may seem now, when you calculate attorney fees, the inconvenience of not having a license or impounded car, missing work due to sitting in court or serving jail time, missed employment opportunities due to criminal charges, and more, auto insurance costs seem like pennies in comparison. No one’s twisting your arm to purchase more than you need, but buy what you do need to keep your head above water should you be involved in an accident, and to be in compliance with the law. So not to scare you, but… well, yes, hopefully the many possible repercussions of not carrying insurance does just that.