What Happens if You Don't Have Car Insurance?

Car insurance is legally mandatory in every state throughout the US except New Hampshire. Typically, the liability auto insurance is mandatory in 49 out of 50 states in the US. There are other types of auto insurance that are mandatory, but it varies across states.

So, if you’re wondering whether you can drive without car insurance; no, you can’t, at least not legally. In fact, you need to have an active car insurance policy to own and register a car under your ownership.

If you drive without car insurance and get caught, you could face fines, license suspension, or even more severe penalties. This article breaks down the potential legal and financial consequences in detail.

What are the Consequences of Not Having Car Insurance?

As car insurance is legally mandatory in almost every state in the US, there are legal consequences for not having it. For starters, you cannot register a car under your ownership without car insurance.

Plus, if you run into a car accident then you will have to pay out of pocket to either compensate your liability cost to the other driver, or you need to spend a significant amount to get your car repaired.

Without active car insurance, you can’t do any of these, not to mention there are various legal consequences which are discussed in detail as follows.

You Cannot Register Your Vehicle

If you own a car, it is crucial to get the vehicle registered under your ownership. However, according to car insurance laws throughout the country except New Hampshire, you cannot register your car at the DMV without proof and details for insurance.

Just like car insurance, car registration is also mandatory throughout the US to own and drive your car.

License Suspension

If you’re driving around without car insurance, then your license may get suspended. It is typically a legal offense to drive around without proof of insurance, and this can lead to the suspension of your driver’s license.

Also, if you’re involved in certain traffic violations such as speeding, illegal parking or even an at-fault car accident that can contribute to the suspension of your driver’s license as well.

Fine

Another consequence of driving with car insurance is you can get fined after being pulled over. Typically, you could face a possible fine of as low as $100 to as high as $5,000. Generally, the fine is up to $500 for first time offense.

If you have car insurance, then you can pay for the fine by claiming auto insurance. However, you should only do that if the fine is a hefty amount which is either difficult or not possible for you to afford.

Jailtime

In more severe cases, you can even face a jail time of up to 1 year for not having car insurance. You would typically face this consequence for either not paying your fine in due time and for getting caught without car insurance multiple times.

If you were sentenced to a jailtime of up to 1 year, then either you need to serve that, or you can pay a substantial fine which can cost up to $5,000 or more. However, to avoid all these legal complexities, it’s easier and cheaper to get car insurance.

Your Car May Get Impounded

If you don’t have car insurance, the police may impound your car, and you'll need proof of insurance to retrieve it from the impound lot. So, without an active car insurance policy, you cannot get your car out of the impound.

The worst part is your auto insurance rate will be significantly higher as your car has been impounded as it shows that you weren’t abiding by the law. Any legal penalty will portray you as a high-risk driver to the insurance company.

That’s why it is crucial to ensure that you are insured, especially to prevent problems like this which could lead to such hassles, and legal complications.

Financial Risk of Hefty Out of Pocket Expenses After an Accident

Whether you’re at-fault for the car accident, or it’s the other driver, without insurance you’d have to cover the entire compensation out of pocket. If you’re at-fault for the accident, then you will have to cover liability costs of the other driver which includes their vehicle damage, property damage and bodily injuries.

Similarly, if any other third party were affected by the accident in which you’re at-fault, then you will have to pay their liability compensation as well. You will also need to pay your own medical bills, and vehicle repair expenses.

These costs can range from a few hundred dollars to thousands and even millions of dollars depending on the severity of the accident and the damages incurred. Without car insurance it can be financially stressful and even impossible for you to cover these expenses.

If you are legally liable to compensate for any damage, and if you can’t afford to do so, then it may lead to legal complications if the other driver sues you. So, the best way to avoid that is to ensure that you're adequately insured with the required types of car insurance.

Higher Insurance Rates

If you had car insurance before, and if you cancelled it or failed to renew it, you could face a policy lapse. A policy lapse refers to the time period when you are uninsured after your coverage ends.

So, depending on the duration of the policy lapse, your car insurance premium can significantly increase. Plus, if you have received speeding tickets, fines, license suspension and other legal penalties your car insurance rate can substantially increase.

The most effective way to keep your car insurance rate low, or to be eligible for discounts and affordable bundle plans is to always stay insured.

Challenges With Purchasing Car on Credit

Most car dealerships require proof of insurance if you’re willing to purchase a car on credit or loan. The main requirement is to have collision auto insurance, and comprehensive auto insurance.

The collision auto insurance covers your car against accidental crashes regardless of whoever is at-fault. Comprehensive auto insurance covers damages for unprecedented events that are beyond your control such as theft, vandalism, and natural disasters such as storms, earthquakes, floods etc.

Before purchasing the car, you can even get auto insurance almost immediately or within the same day.

Learn more about How Long Does It Take to Get Auto Insurance?

You May Need to File SR-22 or FR-44 Certificate

You need a valid driver’s license to purchase car insurance. So, if your driver’s license gets suspended then you cannot directly purchase auto insurance. Don’t worry, many insurance companies offer an alternative solution; the SR-22 or the FR-44 certificate.

Both SR-22 and FR-44 are the same, these are alternative proof of auto liability insurance. The SR-22 certificate is widely used in every state except Florida and Virginia. The FR-44 is exclusively sold within Florida and Virginia.

The downside of the SR-22 and FR-44 certificates is it only provides the minimum liability car insurance at a much higher rate. The advantage is, you’re financially covered, and you’re carrying the mandatory minimum auto insurance coverage.

What are Car Insurance Laws in Michigan?

Just like most states in the US, car insurance is mandatory in Michigan. Despite being a no-fault state, it is mandatory to carry auto liability insurance which is commonly known as PLPD insurance in Michigan.

In recent years there have been some significant changes in auto insurance laws in Michigan since July 2020. The changes in Michigan’s auto insurance laws mainly include higher minimum auto insurance coverage limits, and increased flexibility for PIP insurance (Personal Injury Protection).

Stay Insured with PLPD Insurance

It’s crucial to stay financially protected, and legally compliant. If you’re located in Michigan, and if you’re looking for affordable auto insurance coverage with personalized coverage limits then consider checking our versatile car insurance solutions.

Remember, staying uninsured may seem cost effective, but that’s only until you get involved in an accident, or get entangled in unnecessary legal complexities. If you need expert advice, or suggestions to determine your car insurance requirements, you can contact us today, or you can visit our regional offices in Flint MI, Saginaw MI, or Mt Pleasant, MI.

FAQ

What happens if I don't insure my car?

If you don’t insure your car then you won’t be financially protected against accidents and other unprecedented events. Plus, as car insurance is mandatory in almost every state in the US, you can even get into legal complications if you’re caught driving your car without insurance.

Is it illegal to drive without insurance in the US?

Apart from New Hampshire, it is illegal in every state in the US to drive without auto insurance.

What happens if I haven't had car insurance?

Without active car insurance, you will be held financially responsible for any accident, and you will have to cover it out of your own pocket. If you can’t afford it, then you may face serious legal complications especially if you’re sued.

How long can your car be uninsured?

It is essential to always keep your car insured. If there’s a policy lapse even for 3 to 4 days more, your car insurance rate can significantly increase.

Can I cancel my car insurance if I am not driving it?

Even if you’re not driving your car, it doesn’t eliminate the risk of your car getting damaged or wrecked. It can get stolen or damaged in severe weather conditions such as floods, storms, earthquakes among other natural disasters.