The answer to the above question is simple, yes, absolutely. Every state in the US requires that drivers carry minimum levels of insurance coverage and almost 100% of these include some form of liability protection.
While the answer to this question may be simple, the details around it are worth exploring. There are many rules to know, and you may be wondering is it illegal to not have car insurance at all?
In this article, we’ll hit this topic from the ground up, clearly laying out all the relevant facts. Our goal is to educate and inform, and in doing so we’ll specifically address the following topics:
An Overview of US Auto Insurance Requirements
Is it Illegal Not to Have Car Insurance?
Common Penalties For Driving Without Coverage
Let’s get started…
An Overview of US Auto Insurance Requirements
As mentioned above, all 50 states in the US require drivers to have some type of insurance. Most often this takes the form of liability coverage, and in the case of the one exception (New Hampshire), there are financial responsibility laws in place.
This means that even in a state that does not require liability protection, you need to have sufficient assets to pay claims if you cause an accident. If you don’t have enough assets, you must purchase at least the state minimum policy. [1]
It’s difficult to summarize minimum requirements because they can vary so much between states, here are a few examples.
Alaska
$50,000 bodily injury liability per person
$100,000 bodily injury liability per accident
$25,000 property damage liability per accident
California
$15,000 bodily injury liability per person
$30,000 bodily injury liability per accident
$5,000 property damage liability per accident
Florida
$10,000 property damage liability per accident
$10,000 personal injury protection
Insurance exists to cover you, your vehicle, and your financial security — it’s usually not something to skimp on. Experts generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident because accidents can cost far more than the minimum limits mandated by most states[2]. In order to ensure you have the proper amount of coverage, you need to research your state’s minimum insurance requirements or consult your local insurance representative.
Is it Illegal Not to Have Car Insurance?
There is no law that says you must have an auto policy. If your car simply sits in your driveway you aren’t required to protect it. However, in all states, you’re going to be asked for proof of coverage when you register a vehicle.
Of course, if you plan on driving you will need the minimum insurance amounts required by your state to comply with the law. There are a number of other scenarios where the coverage dynamic is additionally unclear.
If you drive someone else’s car and you don’t have insurance will you be covered by theirs?Policies typically follow the car not the driver, so in this case, the car will likely be covered. But in terms of any injuries you might sustain, you might be on your own.
If someone borrows your car are they then covered by your plan?
In some cases, yes (some comprehensive policies) and in some cases no, (where exclusions exist for certain drivers). It’s best to check with the carrier beforehand if you know someone will be doing a good deal of driving in your vehicle.
Penalties For Driving Without Coverage
Statistics show that roughly 12% of drivers in the US are lacking proper coverage[3]. These people are taking a considerable risk and, if caught, could face any or all of the following consequences.
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- Having your driver’s license revoked or suspended.
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- Getting a traffic ticket for violating insurance laws. In many cases, this is compounded with whatever reason you were pulled over in the first place.
Depending on the jurisdiction where you received the ticket and the mood of the issuing officer you might be able to dodge the ticket if you can produce proof of a policy within a given time-frame. However, this is not something you can fabricate and usually applies only to situations where you truly were covered and forgot your card or something similar to this.
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- Steep fines. The DMV usually tags uninsured drivers with high fees for getting their license reinstated, tickets, and other administrative costs.
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- Having your vehicle registration rights taken away.
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- The possibility of increased future premiums or the inability to get insured at all.
Don’t forget that these are just a few examples, and there are many other things that can happen as a result of driving uninsured. Worst among them is getting sued by another party and having no policy to protect you.
Summary
Insurance requirements and rules vary state to state but in general, you must have coverage to operate a motor vehicle in the US. It’s important to keep proof coverage with you at all times when you drive, and if you plan to cancel a policy take care to line another up so no gaps in coverage exist.
Let’s review the basics.
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- Insurance mandates are different by state but essentially all will require liability coverage at a minimum. Insurance is necessary and required by law.
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- If you don’t plan to drive your vehicle, you can allow your vehicle to go uninsured. If you plan to borrow a car or let someone drive yours, be sure to remember that insurance typically follows the car, not the driver. However, this is not always the case if the auto policy excludes additional drivers.
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- Common penalties for driving without insurance are the loss of your driver’s license, fines, lost vehicle registration and increased future premiums.
Sources:
Insurance Information Institute
Insurance Information Institute/uninsured motorists
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