Car insurance is required in nearly every state to financially protect drivers on the road in a car accident. However, the Insurance Research Council suggests that one in eight drivers is uninsured. Driving without car insurance can have several consequences, especially if you cause an accident. Although the penalties vary by state, you may owe expensive fines, risk suspension or loss of your license, pay out-of-pocket costs for accident-related expenses or even face criminal charges.

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Driving without insurance

Auto accidents can range in severity from minor to devastating. Most people know that if you do not have insurance when you cause an accident, there are repercussions. But even if the other driver caused the collision, driving without insurance can still have consequences.

At-fault accidents without insurance

If you are at fault for an accident, your insurance would likely cover accident-related damages, based on your car insurance policy’s coverage limits. However, if you cause an accident while driving without insurance, you may face serious consequences and out-of-pocket expenses:

  • Repair and replacement costs: You are typically responsible for paying for the damages you caused. That means repairing or replacing any vehicles and property that you damaged.
  • Medical expenses: If the other driver, their passengers or anyone outside your vehicle was injured in the accident, you might be responsible for paying for their medical expenses.
  • Legal fees: If you cannot pay for the damages you caused, the other driver could potentially sue you for compensation, including the cost of their legal fees.
  • License suspension or revocation: Most states will likely suspend your license for driving without insurance. If you have been caught driving without insurance before, your license may be revoked.
  • Required forms: Some states may require that you have an SR-22 or FR-44 on file with your DMV before reinstating your license. These forms prove to the state that you are maintaining auto insurance coverage. You will need to obtain car insurance at this point since these forms are filed directly by insurance companies.
  • Vehicle impounding: The officer who arrives on the scene may choose to tow your vehicle if you were driving without insurance.
  • Fines: You may have to pay a fine if you were caught driving without insurance, which could be steeper depending on the details of your accident.
  • Jail time: A first offense may not land you in jail, but multiple incidents of driving without insurance might increase the chances of jail time.
  • More expensive insurance: Insurance companies tend to view drivers who have caused accidents as higher risk, as well as drivers who have had a lapse in coverage. This means you’ll likely be paying higher insurance premiums than the average driver.

Although some drivers have medical payments or PIP coverage to help cover medical costs, if you are found liable for the accident, the injured party or their insurance company may try to recoup those costs from you. However, some states are considered no-fault states, so it is a good idea to speak to an insurance professional to understand what you could be responsible for in an accident without the proper coverage.

Not-at-fault accidents without insurance

Even if you do not cause an accident — perhaps you are rear-ended by another driver — not having insurance can still cause issues for you.

  • License suspension or revocation: Even if you were not the at-fault driver, you could still lose your license. If police are called to the scene, your state will most likely require you to submit proof of insurance. If you are unable to do so, your license could be suspended.
  • Fines: If your state fines drivers for forgoing coverage, you may need to pay the fine even though you did not cause the accident.
  • Vehicle impounding: Again, a law enforcement officer may decide to impound your vehicle once they discover that you were driving without insurance.
  • Out-of-pocket expenses: Vehicle damage is not always the result of collisions on the road. A tree limb could fall on your vehicle, for example, or your car could be stolen. If you do not have an insurance policy that includes coverage for your vehicle, you will be responsible for the necessary repairs or replacement of the vehicle.

Accidents in states that don’t require car insurance

Though most states in the U.S. require car insurance, some states don’t require insurance in some cases or have alternate options, like bonds or deposits, for drivers to comply with state car insurance laws.

It’s important to note, though, that while you may avoid being penalized by these states for not having car insurance coverage, you still must meet certain parameters. Plus, you can still face certain consequences if you get into an accident or are an at-fault driver.

At-fault auto accidents

If you opt to drive uninsured in New Hampshire but cause an accident as the at-fault driver, you are still liable for the damages and injuries. If you are unable to pay for the injuries, property or vehicle damage you cause, it can result in license and registration suspension. You may also be responsible for your own medical costs if you are injured in the accident.

In Virginia, drivers can choose not to purchase auto insurance and pay a $500 uninsured motorist vehicle (UMV) fee each time the vehicle registration renews. If you do not pay the fee and are caught driving while uninsured, your licenses and registration may be suspended. You may then be required to pay a $600 noncompliance fee, file an SR-22 and pay to reinstate your driving and registration privileges. Like New Hampshire, Virginia requires you to pay out-of-pocket for any injuries and damages you cause.

Not at-fault accidents

If you are involved in an accident where you are not the at fault driver in either state, the at-fault party’s insurance company will typically pay for your injuries and vehicle damage. However, if their coverage is not sufficient and you do not have coverage, you could end up paying out of your own pocket for the rest of your medical bills and vehicle damage.

If you do not comply with either the state’s insurance or the state’s financial responsibility requirements, you risk having your license and registration suspended, whether or not you’re at fault in the accident.

How to find affordable car insurance

Auto insurance may not be the most exciting purchase, but it is an important part of your financial plan. Although choosing to go without insurance may save you money, the outcome of causing an accident without insurance can be catastrophic to your financial health. If budget is your primary concern, there are ways to save on your car insurance.

  1. Compare multiple policy quotes. Get quotes from several insurance providers to compare prices, coverage options and discounts before making a purchase.
  2. Ask about discounts. If you are looking for the best price, inquire about available discounts. You may qualify for a better rate with discounts for safe driving or bundling multiple policies.
  3. Always drive safely. Generally, drivers without accidents on their records qualify for lower insurance premiums. Maintaining a clean record can help you avoid surcharges on your policy. Safe driving behaviors could also mean saving extra money by using a telematics device that tracks your driving and earns you a discount.
  4. Find the right coverage for your needs. It is equally important to not over-insure yourself as it is to avoid underinsuring yourself. Speak with a licensed insurance agent about your situation to understand your coverage needs. If you are comfortable carrying higher deductibles, for example, and paying more out of pocket in a claim, increasing your comprehensive and collision deductibles may be worth considering to save on car insurance costs. Reviewing your liability and medical coverage is also worth considering to find the right coverage at the best price.

Frequently asked questions

    • Rates vary by provider and depend on individual rating factors like the state you live in, your driving history, the car you drive and what coverages you choose. The cheapest company for one person may not be the cheapest company for someone else. Getting quotes from several companies could help you find a lower-priced policy, though, so that you can switch your insurance to a cheaper provider.
    • If another driver hits you and they do not have insurance, you have a couple of options. If you have uninsured motorist coverage, you may be able to file a claim to see if your injuries and vehicle damage are covered by your own policy. You can also seek legal action and file in court against the at-fault driver for failing to show proof of insurance and causing an accident as an uninsured driver.