Can you drive without insurance?<\/p>\n\n\n\n
Well, nearly one in eight drivers do not have car insurance, according to a 2021 report from the Insurance Research Council. And if you are thinking about joining this not-so-exclusive club, DON’T! <\/p>\n\n\n\n
It is a terrible idea.<\/p>\n\n\n\n
Not only will you face legal consequences, such as fines and even jail time, but you\u2019ll also face insurance consequences. And if you cause a car accident that results in property damage or injuries when you\u2019re driving without car insurance, the financial fallout can be devastating.<\/p>\n\n\n\n
Every state has some form of \u201cfinancial responsibility\u201d law. This means you must have a way to pay if you or someone driving your car causes an accident. One less-than-practical way to satisfy financial responsibility is to fork over a bond with the state that can run upwards of $50,000. <\/p>\n\n\n\n
Why do this, though, when the easiest and most affordable way to satisfy financial responsibility is to buy car insurance?<\/p>\n\n\n\n
Auto insurance offers a layer of protection for your assets. When you finance a car, your lender might require comprehensive and collision insurance as part of your loan contract. They want you to protect the automobile, which is their financial asset, with sufficient coverage.<\/p>\n\n\n\n
You’ll want to protect yourself and your assets with enough coverage, as well. According to The Balance, industry professionals such as your state’s insurance commissioner\u00a0recommend a minimum<\/a>\u00a0of $100,000 per person of bodily injury protection and $300,000 per accident. <\/p>\n\n\n\n Most at-fault car accidents cost far more than the minimum limits mandated by many states, such as California, where this limit is only $5000.<\/p>\n\n\n\n Every state has its own requirements for what kind of car insurance residents should have and how much of it they should carry. <\/p>\n\n\n\n Nearly every state requires drivers to have some kind of liability insurance. Liability car insurance pays for others\u2019 medical costs, lost wages and damage you cause in a traffic-related accident. It won\u2019t pay for your own medical or car repair costs.<\/p>\n\n\n\n Depending on where you live, you may also have to pay for the following:<\/p>\n\n\n\n Paying for car insurance might feel like you\u2019re throwing money away. This is especially true if you\u2019ve never been in an accident. However, misfortune can strike at any time. <\/p>\n\n\n\n While cars are becoming safer to drive, fatalities from car-related accidents are on the rise, according to the most recent data from the National Highway Traffic Safety Administration. And just one car accident can turn into a major financial setback if you\u2019re uninsured or underinsured.<\/p>\n\n\n\n Most state minimum requirements aren\u2019t enough to cover all expenses from major car accidents. This means you\u2019ll be the one to pay the remaining balance if you\u2019re at fault.\u00a0<\/p>\n\n\n\n Take note: <\/strong>If you leased or financed your vehicle, your lender likely requires you to have collision and comprehensive insurance on top of any state-mandated minimums. These coverage types pay for repairs or replacement of your own vehicle in case of an event outside your control.<\/p>\n\n\n\n Since you\u2019re legally responsible for any accidents you cause while driving, you should get at least enough liability insurance to cover your net worth in the event of a lawsuit.\u00a0<\/p>\n\n\n\n You can calculate your net worth by subtracting your total debt (mortgage, credit card balances and loans) from the value of all your assets (house, cars, cash in the bank and investment accounts).<\/p>\n\n\n\n If your net worth is low, it may be enough to have just your state\u2019s mandated minimum car insurance requirements. But take note, most states don\u2019t require you to purchase car insurance that reimburses you for your own medical or car expenses if you\u2019re found at fault after an accident or experience some other mishap outside your control.<\/p>\n\n\n\n Driving without insurance can land you in legal hot water. Here are some of the consequences you could face:<\/p>\n\n\n\n If you don\u2019t learn your lesson the first time around, the legal consequences can get more severe. Second and subsequent offenses will typically result in stiffer penalties, including steep fines and an increased likelihood of facing jail time.<\/p>\n\n\n\n The penalty for driving without insurance is different in each state. The table below describes penalties for first-time offenses by state. Some state governments will even imprison people for driving without insurance.<\/p>\n\n\n\nWhat is the least amount of car insurance I need?<\/strong><\/h2>\n\n\n\n
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Should I get more than just the bare minimum?<\/strong><\/h3>\n\n\n\n
Cover your net worth<\/strong><\/h3>\n\n\n\n
Consequences of driving without insurance<\/strong><\/span><\/h2>\n\n\n\n
Legal consequences<\/strong><\/span><\/h3>\n\n\n\n
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State penalties for driving without insurance<\/strong><\/h3>\n\n\n\n