The Consequences of Driving Without Auto Insurance

Posted on Jan 7th, 03:44 pm, under Are You Covered?

Besides being illegal, driving without auto insurance in the United States is extremely unsafe and irresponsible. The reason behind the nationwide requirement for auto insurance is simple: driver accountability. All drivers must be financially and legally responsible for their actions while they're on the road.

If you go more than a year without auto coverage, the DMV will blacklist your car immediately. Since all insurance companies submit reports to the DMV that list which customers have not renewed their policies, it’s easy to get found out. Don't let this happen to you; renewing a policy after blacklisting is costly and tedious. You'll need to obtain "no objection" certification from the DMV, and pay a large fee on top of that. (For more information on navigating DMV requirements, check here).

Are there any alternatives to auto insurance? If you've got sufficient finances, you can claim that you have enough to pay for damages, but simple existence of financial backing isn't proof that you're willing to spend it. And paying for damages without auto coverage has driven people into bankruptcy in many cases.

In a few states, however, there are certain allowances for individuals who own a large fleet of vehicles and/or have sufficient finances. In these special cases, the DMV accepts a significant deposit in place of an actual insurance policy. The upside of this scheme is that there is no need to pay a regular premium to insurance firms, and it comes out cheaper in the long run. However, most middle-class citizens will find that the minimum deposit amount is beyond what they can afford.

In almost all other cases, standard DMV requirements and standards will apply. This includes the insurance renewal tracking mentioned above. All family members that live under one roof are considered attached to all the vehicles they own and operate. Teenagers of at least sixteen years of age who get their driving license are also automatically added to the insurance policy.

You should review your insurance policy carefully to make sure it covers exactly what you need, no more, no less. Protecting yourself financially is of the utmost importance in these tough economic times. Never forget to renew your coverage under any circumstance; it's not just about following the law, it's also about your peace of mind.