Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate drivers about...

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Reviewed by Laura Walker
Licensed Agent for 10 Years

UPDATED: Mar 25, 2019

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While driving without auto insurance is illegal in all states, the penalties for doing so vary greatly from state to state.

If you are pulled over and cannot produce proof of current liability insurance, or if your state uses a computerized system and it shows you are uninsured, you will face a fine and may not be allowed to drive your car away from the scene, causing it to be impounded.

You may also face other criminal penalties such as jail time or probation. In some states, you can have your car tag confiscated, and your license suspended until you can show proof of insurance.

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View Auto Insurance Requirements by State

While driving without auto insurance is handled differently by the various states, there is one thing that is fairly uniform: you can be sued for your personal assets if you cause an accident and you are uninsured. Even if you do not cause the accident, being involved in a wreck while not carrying insurance can bring serious financial consequences.

The reason for this is simple. Insured drivers are tired of paying higher premiums to protect themselves against uninsured motorists, and auto insurance companies are tired of paying claims to their policyholders when they are hit by an uninsured motorist.

When innocent people are injured by uninsured motorists, it is their legal right to sue the driver for the damages to themselves and their vehicles. Even if the injured driver fails to sue, the insurance company who covers the victim will be sure to try to collect any money possible to recover their losses when they pay an uninsured motorist claim.

Uninsured Motorists – a Catch 22

Unfortunately, the same people who have auto car insurance are often those with no disposable assets. Lack of funds to pay for coverage is the most common reason people fail to maintain insurance on their vehicles, so it stands to reason that these people will not have much disposable property.

However, if there are any assets, such as equity in a home, it can be attached in a judgment.

“A recent study by the Insurance Research Council (IRC) estimated that 1 in 7 drivers on the road today have no auto insurance”

Based on earlier data from 2009, the IRC believes that the five states with the highest uninsured motorist rates are Mississippi, New Mexico, Tennessee, Oklahoma, and Florida. Each of these states has an uninsured motorist rate of at least 24% of all drivers.

Not surprisingly, many of these states have high transient populations, high poverty rates, or very lenient insurance laws.

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Underinsured Drivers

While many drivers have no coverage, many more are “underinsured,” meaning that they are carrying the minimum liability limits, which may not cover all of the damages caused by an accident.

Many companies now offer “uninsured and underinsured” coverage to close the gap for someone who is hit by an underinsured driver.

While you cannot prevent an accident with an uninsured driver, you can protect yourself by keeping uninsured motorist coverage on your vehicle and keeping a low deductible on this coverage. This will minimize the amount you will be required to pay if you are involved in a wreck with an uninsured motorist.

Some auto insurance companies will charge you higher premiums if you have been uninsured for a period of time. In other cases, the insurance company will not ask any questions, but simply offer you a policy rate based on your age, driving record, and other common factors.

If you have been involved in a wreck without insurance, you will probably be paying much higher premiums, so it is important to get insurance before you have an accident on your record.

There are companies which specialize in helping uninsured motorists get affordable coverage.

Some states are considering subsidizing insurance coverage for people who cannot afford insurance. Although this is a controversial topic, the logic behind it is that tax money used for this purpose would save the taxpayers money by reducing the number of uninsured motorists on the road and lower their insurance rates.

Detractors of the idea insist that driving is a privilege, not a right, and if someone cannot afford insurance, that person should not be allowed to drive.

There are options available for people who do not drive frequently, called “garaging policies.” These policies provide for very limited operation of the vehicle, but still cover it in the event that someone is hurt in an accident involving the car.

This may be an option for people who drive only a few times a month or only drive short distances, such as older people who only drive to doctor’s appointments or the store. Check with your agent to see if a garaging policy might work if you need limited coverage.

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Related posts:

  1. What are the penalties for not having car insurance?
  2. What is Uninsured and Underinsured auto insurance coverage?
  3. Are you automatically insured when driving someone else’s car?
  4. Why should I take a Defensive Driving Class?
  5. What is full coverage car insurance?