Consequences of Driving without Insurance

Liability car insurance for a registered vehicle is mandatory in all states in the US, and some states have other requirements as well i.e. personal injury protection in some no-fault states. This is in line with the financial responsibility laws where a motor vehicle owner or driver provides proof of the capacity (through insurance) to cover the costs of an accident.

However, one in 7 drivers or 13.8% of all vehicle operators in US continue to get behind the wheel without insurance coverage, and the rate per state varies from 4% (Massachusetts) to 28% (Mississippi). This means that if you are injured in an accident in Mississippi, there is a 1 in 4 chance that the Mississippi driver has no insurance to cover your medical costs. You can sue the driver, of course, but that will take much more effort and time.

Uninsured drivers (or those with no mandatory proof of financial responsibility such as a surety bond) or even insured drivers who fail to keep their proof of insurance in the vehicle face different penalties depending on the state. Vehicle owners that have discontinued paying for a particular vehicle’s insurance because they have sold or otherwise relinquished ownership of it are also at risk of receiving sanctions if they fail to formally cancel the policy and inform the Department of Motor Vehicles (DMV) about the cancellation. In some states, this is the same as having no insurance for a registered vehicle.

The following are common sanctions for driving without a license:

  • Car registration suspension
  • Driver’s license suspension
  • Fine
  • SR-22 requirement
  • Traffic citation

The SR-22 certification is particularly onerous because insurance companies levy a higher premium for those who are required it. It can be difficult to find insurance companies who will even give it, because drivers requiring an SR-22 are considered high-risk.

These penalties are not the biggest problems for driving without insurance, however. If you are involved in an accident, you are liable for your own costs as well as of other parties. If you are unable to cover these costs, you could be facing a lawsuit that can strip you of your assets such as your home or vehicle. It just makes no sense to continue driving without insurance.

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