Is It Legal to Drive Without Car Insurance?

By KBB Editors 12/03/2021 2:18pm

insurance policy

One of many essential documents that most drivers have in their car is their proof of insurance. Whether auto insurance is required depends on where you live, but in general, it’s not legal to drive without car insurance. The types of coverage you need to comply with the law vary based on where you live. So, coverage that meets one state’s minimum insurance requirements may not be sufficient in another.

In this article, we’ll examine where you may be able to get away with not having auto insurance, as well as the common penalties you could face if you get behind the wheel without coverage in a state that requires it.

Do You Need to Have Car Insurance?

Nearly every state in the United States requires drivers to carry car insurance.

One exception is New Hampshire. The state does not have a mandatory insurance law, but it “strongly recommends” that residents carry auto insurance. And the Department of Motor Vehicles may require drivers who have been convicted of certain offenses, such as driving while intoxicated or leaving the scene of an accident, to maintain coverage and file an SR-22.

In Virginia, you can drive without insurance, but you must pay an uninsured motor vehicle fee. And if you’re in an accident, you will be responsible for covering accident-related expenses.

To make sure you have the right coverage to drive legally where you live, check with your state’s DMV.

What Types of Car Insurance are Required?

Auto insurance requirements vary by state. However, nearly all states require some form of injury protection and property damage coverage.

Some states also require uninsured or underinsured coverage to protect you against damage from other drivers who don’t have insurance and personal injury protection (PIP) or medical payments (MedPay) coverage to help pay your medical bills if you’re injured.

Check with your state’s DMV to find out exactly what coverage you need.

What are the Penalties for Being Caught Without Car Insurance?

Driving without insurance can mean hefty penalties for the uninsured. The outcomes vary by state and circumstance, and repeat offenders in some places may face harsher penalties than first-time offenders.

If You Drive Without Car Insurance During a Routine Traffic Stop:

  • Prepare to pay a fine.
  • Many states will also suspend your driver’s license and registration, which can result in additional costs to get them reinstated.
  • Your vehicle may be impounded, and you won’t be able to get it back until you pay associated fees and can show proof of insurance.

If You are in an Accident Without Car Insurance:

  • You will face similar fines and penalties as above.
  • You could be financially liable for property damage, injuries, or someone’s death. Considering the potential costs – such as a totaled vehicle or hospital bills – having an accident without insurance could have devastating financial consequences and may even lead to bankruptcy.

In addition to legal penalties, uninsured drivers will also see increased rates when getting insurance, because insurance companies typically consider them to be high-risk. And the increased rates could last for years.

Possible Jail Time

Driving without insurance is a misdemeanor in most states, and potential punishments vary based on where you live. In some states, uninsured drivers could spend time in jail, although it’s unlikely for a first offense. However, if you’re a repeat offender or cause a serious accident, you’re more likely to receive jail time.

Financial Responsibility

When you have adequate auto insurance, the insurer pays for damage and injuries that result from an accident. But if you don’t have coverage, you’ll be responsible for covering accident-related expenses out of pocket. And they can add up quickly. In 2018, the average property damage liability claim was $3,841, and the average bodily injury liability claim was $15,785, according to the Insurance Information Institute.

Is There an Easier Way to Afford Car Insurance?

If you’re caught without car insurance, the costs can add up quickly. It’s safer and easier to maintain an affordable car insurance policy.

An insurance agent can walk you through all car insurance coverage options and can help you find a plan that fits your budget.

How Many Uninsured Drivers are on the Roads?

One in eight drivers is uninsured nationwide, according to the latest data from the Insurance Research Council.

States with the Most Uninsured Drivers:

  • Mississippi: 29%
  • Michigan: 26%
  • Tennessee: 24%

States with the Fewest Uninsured Drivers:

  • New Jersey: 3%
  • Massachusetts: 4%
  • New York: 4%

What Happens If Your Car Insurance Lapses?

Typically, short lapses in coverage may not be a big deal. You may have a grace period that gives you time to renew expired policies. The length of the grace period varies by insurance company and state law but typically ranges from seven to 30 days. Check with your insurer to find out if you have a grace period and how long it is.

Can You Pause Your Auto Insurance If You Won’t Be Driving?

If you’re taking a break from driving, some states and insurance companies may let you pause your coverage. However, there are some downsides to this approach. Temporarily suspending your car insurance could cause insurance companies to classify you as a high-risk driver. As a result, your insurance rates may increase when you reinstate your policy.

To find out how pausing coverage may affect your future rates, talk to your agent or insurance company. And check with your state’s DMV to find out if you need to file any forms to suspend your policy.

If you financed the purchase of your car, you may not be able to suspend your policy. Lenders typically require drivers to maintain comprehensive and collision coverage until the loan is paid in full. And some may require you to maintain your state’s minimum liability coverage even if you’re not driving.

After Buying a Car, Can You Drive It Without Insurance?

Usually, it’s not legal to drive without insurance if you buy a car at a dealership and finance the vehicle. You typically won’t be able to leave the dealership without proving you have car insurance.

Uninsured drivers will need to secure insurance before buying a car. If you’re insured and trading in your car, some policies have a grace period that lets you add a new vehicle to the policy within a certain number of days from the purchase date.

Before buying a car, check with your insurer about the specifics of your policy. You wouldn’t want your car damaged by a storm or anything else while you have no coverage.

Can You Borrow a Car If You Don’t Have Insurance?

If you occasionally borrow a friend or family member’s car, their insurance policy will typically cover accident-related expenses up to the owner’s policy limit. However, you will be responsible for any costs that exceed the limit.

If you regularly borrow vehicles that belong to someone else, you may want to consider a non-owner insurance policy, which provides personal injury and property damage liability coverage for people who don’t own a car. This type of coverage typically kicks in after the owner’s policy.

However, after an accident, financial responsibility can become murky between the car owner’s insurance plan and the car borrower’s coverage — if they have any. So, it’s a good idea to check with the insurance companies before borrowing a car to find out which policy would serve as the primary coverage and which would be the secondary.