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Never Drive Your Car Without Insurance. Here’s Why!

Are you considering saving money by driving without insurance? If so, then you are putting yourself at a huge risk by incurring even higher costs. You need to know the consequences, as it could even lead to time in jail. 

States have very different laws regarding insurance. Below, we discuss driving a car without insurance and why you should avoid it. 

What Is the Purpose of Insurance?

Insurance is there to protect anyone who may be involved in a car accident. This includes the person who may be liable and the person who is the innocent party. Collisions can also occur with just one person, and it also stands to protect them. 

The average claim for an auto insurance accident stands at around $3750, and that does not even include bodily injury which can be much higher. This would be far too much for the average person to pay should they have an accident. Insurance aims to repay this amount for them, taking the financial strain. 

These costs could include the repair or replacement of your vehicle. If you caused the accident, you will need to pay these to the owner of the vehicle you hit, and any compensation for injury or damages to them. 

Is Driving a Car Without Insurance Illegal?

Each state has very specific rules for anyone caught driving without insurance. However, all of them have a number of similar punishments to deter people from driving with it. These can include points on a driver’s license or heavy fines of up to $5000, which scale up or down depending on if it is the first or second offense.

No Pay, No Play Laws

Many states may also operate a no pay, no play law. This mainly impacts anyone who has been involved in motor insurance accidents that were the fault of someone else. If the injured party does not have insurance, then they are severely limited in the amount they can claim in damages. 

If you incapacitated and unable to work, this can be a huge problem. You will have no income and no way to sustain yourself. If it is a long-term problem, the situation becomes exasperated. 

Some states even make uninsured drivers pay for all the damages in an accident. This is even the case if the accident was not their doing or through their negligence, but someone else’s. 

First Offenses

Many states offer a lower punishment if you are caught driving for the first time without insurance. This is because law enforcement understands that even the most diligent of people can get caught off-guard. 

You may have simply had your insurance expire and not realized. Perhaps you may have even been driving a friend’s car without insurance or have the wrong insurance by accident. 

First offenses incur a number of punishments depending upon the state. For example, Florida suspends your license until non-cancellable insurance is purchased, with a $150 reinstatement fee. In contrast, Delaware gives you a $1500 fine with a six-month license suspension. 

Some states may make you take a defensive driving course. This is a course designed to increase your road safety awareness, and can often replace tickets or points on your license. 

Second Offenses

In many states, second offenses incur a much heavier penalty. This is because the person has had time to process the mistake they made and know the error of their ways. A person doing it twice is not someone who has made a mistake, but someone who does not care.

Kentucky has one of the strictest second offense punishments. It can $1000 to $2500 dollars in fines and/or 180 days in jail within five years. 

Non-Insurance States

For the residents of Hampshire and New Virginia, auto insurance is not required. However, you do have to provide proof that you are financially responsible for the vehicle. Even in this situation, many people choose to pay the low premiums for auto insurance, instead of paying out for a whole new car or costly repairs when an accident does occur.

Even in these states, not having the correct documentation to prove financial responsibility can lead to punishments. These can include fines, points against your license and suspensions, car impoundment, and even jail time. 

Driving a Friend’s Car Without Insurance

This all depends upon the terms of your friend’s policy. Generally, most insurance policies will cover the car and not the person driving (if you are in the US). This means as long as you have permission, you should be covered for property damage and injuries, but check this first.

In some states, you may find that if an accident occurs in a borrowed car that is not insured, both parties are liable. This means that the owner and the person borrowing the car can face penalties. 

Reducing the Consequences

There are some methods you can use to try and limit the consequences, should you be caught driving without insurance. The first is to mention that you actually have coverage if you have simply left the documents at home. Many law enforcement officials should let you drop it into their offices should you provide the correct contact details.

Secondly, when caught, be proactive. Ensure that you get insurance quickly and let the law enforcement bureau know. In some states, this can even reverse any penalties you may face. 

Finally, let them know about your circumstances. If your insurance is a week or two out of date, then let people know you mislaid the payment date. They may be lenient and let you renew it without a penalty. 

Don’t Avoid It

In summary, driving a car without insurance is a definite no. Even in states where it is not required, insurance can cover you from huge costs. It pays to safeguard yourself, your health, and your finances. 

If you enjoyed our handy article, we have lots more to help you manage your finances. Visit the rest of our blog for everything from money-saving tips to product reviews, so we can get the best for your buck in the coming year!