No Auto Insurance – What now ?

Start taking the bus or walk. No, seriously.

Whether canceling your auto insurance policy is part of a grander plan to shore up your finances or you simply think you can do without it, the cost of driving without car insurance should make drivers think twice.

For one thing, just about every state in America has a minimum requirement known as liability coverage.

Liability covers at-fault drivers for damages they cause to another vehicle or property damage.

Penalties for driving without at least the minimum amount of car insurance vary across the Nation. One common thread though is that the penalties all result in either fines, jail time or both.

For example, the state of Texas levies a $350 fine for the first time a driver is ticketed for failure to have car insurance. A subsequent citation or conviction could lead to a higher fine and loss of driving privileges. Add court costs and a vehicle impound fee to the equation and it would have been cheaper to not drive at all.

Uninsured drivers in Maryland could face jail time for their first offense. So in addition to fines a driver will now have a criminal record to boot.

Additionally, too many citations will also lead to higher insurance premiums thereby wiping out any potential savings from driving without car insurance.

Too many citations will also lead some states to require you to carry what is known as a Certificate of Financial Responsibility (CFR), also known as an SR-22. This financial document is provided to the state’s Department of Motor Vehicles by your insurer and is mandatory in some states to show proof of auto insurance before a driver’s license is re-instated.

Since an SR-22 is typically reserved for drivers considered “high-risk” and follows a driver for several years, higher rates are almost guaranteed to follow them.

An even worse scenario than a fine though is that of an uninsured driver causing an accident and then being sued in court for damages, hospital bills, lost wages, etc. Add to the prospect of getting sued the court fees and the cost of hiring an attorney to protect assets and a situation like that can easily bankrupt someone simply trying to save money by driving without car insurance.

It’s best to either play by the rules and drive with car insurance or start taking the bus or walk.

No, seriously.