Insurances Effect on Your Future

Driving without insurance is illegal in nearly all states but does not mean it doesn’t happen on the daily. About 12.6% of motorists in the US are uninsured. You could be uninsured by choice or even lapse of coverage but there are consequences. There can be legal and financial consequences for driving without insurance.

What Happens When You Get in a Car Accident Without Insurance?

There are only two states that do not require car insurance but besides that it is a necessity. This normally includes a minimum amount of liability coverage. If you fail to get insurance, you are subject to financial and legal consequences. Some penalties you can receive are the following: fines/ jail time, suspension of driver’s licenses, vehicle registration, or license plate, being required to file a SR-22 form (a bond, also known as a certification of financial responsibility, indicates that you carry sufficient liability insurance to meet state requirements), or impoundment of vehicle. At the end of the day, it will come down to if you are at fault of the accident.  

What happens if you live in a state that requires car insurance and you are at fault?

There are two systems that states tend to follow no fault and tort or at fault. No fault state drivers are made to pay their own damage and medical bills, regardless of it was their fault or not. In these states you must carry PIP insurance, to help cover the costs. In certain circumstances people can sue you for pain and suffering, which PIP typically does not cover. In no fault states, they will come up with certain criteria you must meet in order to sue the other person. In a tort or at fault state, it runs a little different then in no fault states. The other driver who has been hit can sue for medical bills, car repairs, or for pain/suffering. If you cannot pay this law suit a judge can use your assets or future income to pay the other person.

What happens if you’re not at fault and you live in a state that requires car insurance?

There is a special thing that only 11 states use it is called “No Pay, No Play” insurance laws. This basically limits or prevents uninsured drivers from claiming damages. The states that this applies to are:

·         Alaska ·  California ·  Indiana

·         Iowa ·  Kansas ·  Louisiana

·         Michigan · Missouri · New Jersey

·         North Dakota · Oregon

Your state doesn’t require car insurance and you are at fault 

There are only two states in the U.S. that do not require insurance and it is New Hampshire and Virginia. In New Hampshire if you decide you do not want insurance you are personally liable for all damages and injuries. You may have to provide proof of funds to prove you can pay for accidents you cause. If you do cause an accident the state may require you to purchase and show proof of insurance for three years after the accident. Virginia is a quite different then New Hampshire in the way they go about insurance. In Virginia, you have the option to pay $500 for uninsured motor vehicle fee when you register your vehicle. No insurance is provided after that fee. You are still responsible to pay for any damage of medical bills you cause.

If you do not have insurance and you are not at fault you may be able to repair your damages with the at faults insurance. To do this you would have to go through a third party or a personal injury lawsuit. When you get uninsured motorist coverage it pays for damages caused by the at fault driver or by a hit a run scenario.  This varies by state of course, but typically covers medical bills for you and a passenger if injured. Uninsured motorist coverage is mandatory in 20 states, others are optional.

Cost of insurance

Although the cost of insurance can be a scary number to look at there are affordable options. With insurance being pricier this typically drives people away from purchasing insurance who are struggling with a speeding ticket, an accident, DUI, or with poor credit. All people who really need insurance. Even though their rates will be higher, there are things they can do to help with the cost.

Here is a list of cheaper car insurance companies.

State farm seems to have the cheapest rates for people who are suffering with accidents or DUI’s with it averaging an annual rate between $1,409 and $1,711. Ways to avoid high insurance rates are by paying your credit card bill on time and how you manage your debt. Besides that, insurance rates go off of a number of factors from driving record, where you live, your age and gender, and what type of vehicle you drive.