What happens if I don’t buy car insurance?

Auto insurance can be expensive, and many people may find it difficult to justify the cost of insuring a vehicle that they rarely drive. Although it may be tempting to forgo insurance, the costs of being uninsured greatly outweigh the benefits of avoiding an insurance policy. Driving without insurance can lead to lawsuits, suspended licenses and trouble with the law. It’s always better to purchase an affordable insurance policy or get rid of a car that you don’t need rather than skipping the insurance. There are numerous ways that driving without insurance can cost you:

Vehicle Registration

The first reason you will need to purchase auto insurance is so that you can register the vehicle. The DMV will require proof of liability insurance before they will register any car. An individual has 30 days after the purchase of a vehicle to get it registered. If he or she continues driving the vehicle after this point, they may be pulled over and cited for driving a car without registration. In many cases, a police officer will not allow the vehicle to be driven away if it doesn’t have proper registration; this means that the vehicle will be impounded and the driver must cover the related fees to retrieve it. They may also need to pay a ticket and may need to buy insurance before the vehicle can be recovered.

Suspended Licenses

In most cases, if a person is found to be driving without auto insurance, the DMV will suspend that driver’s license until they can provide proof of insurance. This may happen because the driver is pulled over by the police or if the driver is involved in an auto accident. It may also occur whenever a person allows their auto policy to lapse; whenever a policy is canceled, the insurance company will notify the DMV.

Once the DMV has been notified that a driver is operating without insurance, the only way to reinstate the license is to purchase an auto policy and submit an SR-22 form to the DMV. This is a proof of insurance form that proves that an individual accepts financial liability for any damage a vehicle may need. If the driver continues operating any vehicle while their license is suspended, they face hefty fines and possible criminal charges.

Lawsuits

If a vehicle’s owner is involved in an auto accident that causes damage or injuries to another person or property, the owner is responsible for paying for that damage whether or not they have insurance. The cost of auto repairs can be quite high, and medical expenses can easily exceed $100,000 even for apparently minor injuries. If you do not have insurance that will cover these costs, you will be responsible for paying them out of pocket.

In most cases, uninsured motorists are approached directly by the other party’s insurance company to set up a payment plan through a collections agency. These can take a very long time to pay off and will damage your credit until they’ve been fully paid.

In addition to collections agencies, you may be taken to court and sued privately for damages or injuries. You will need to pay for the lawsuit settlement itself in addition to court fees and the cost of an attorney. These costs can add up astonishingly fast.

Protecting Yourself

In addition to the liability cost of causing an auto accident, drivers without insurance are also not protected whenever they’re involved in collisions. This means that the driver must pay not only for damage that they cause but also find a way to pay for their own repairs and medical expenses.

Even if you are a very safe driver and never cause an auto accident, that doesn’t mean that you will never be hit by another driver. There is no guarantee that the person that hits you will have insurance, and suing them for damages will take time and money. If you carry full coverage auto insurance, the insurance company would help pay for legal costs and the expense of repairing your vehicle.

Although the costs of auto insurance may be inconvenient, they are a necessary part of vehicle ownership. Just like rent payments and grocery costs, auto insurance is a necessity of life and should be budgeted accordingly. Fortunately, it’s possible to get a very good deal on auto insurance if you shop around. Car insurance is very competitive and insurers offer numerous discounts and special offers to lure in new customers.

Drivers with a safe driving history are able to obtain very affordable auto insurance by taking advantage of safe-driver discounts and other programs. In order to find the best insurance company for your needs, you can obtain a free quote online. Once you’ve found an insurance company that will suit your needs, you can work with the agent to create a policy that will provide the best coverage at a cost you can afford.

Case Studies: The Consequences of Driving Without Car Insurance

Case Study 1: Vehicle Registration

In this case, John purchased a car but failed to obtain insurance within the 30-day window required for vehicle registration. While driving without proper registration, he was pulled over by the police. As a result, his vehicle was impounded, and he had to pay impound fees to retrieve it. John also received a citation and had to purchase insurance before recovering his vehicle.

Case Study 2: Suspended License

Sarah allowed her car insurance policy to lapse, and she continued to drive without insurance. When she was pulled over by the police for a traffic violation, they discovered her lack of insurance coverage. As a result, Sarah’s license was suspended until she could provide proof of insurance.

To reinstate her license, she had to purchase an auto policy and submit an SR-22 form to the DMV. Continuing to drive with a suspended license could lead to additional fines and potential criminal charges.

Case Study 3: Lawsuits

In this case, Mark caused an auto accident without having insurance. He was held liable for the damages and injuries caused to the other party involved. Mark had to pay for the costs of auto repairs and potentially high medical expenses out of pocket. The other party’s insurance company approached Mark directly to set up a payment plan through a collections agency.

These payments took a significant amount of time to pay off and negatively impacted Mark’s credit. He also faced the possibility of being sued privately for damages, requiring him to cover the lawsuit settlement, court fees, and attorney costs.

Case Study 4: Lack of Protection

Even if you are a safe driver, accidents can still happen. In this case, Emily was involved in a collision caused by another driver who did not have insurance. As Emily did not have comprehensive coverage, she had to pay for her own vehicle repairs and medical expenses. If she had carried full coverage auto insurance, her insurance company would have helped cover the costs of repairs and legal expenses.