Whether the time has come to renew your auto insurance or you’re considering ways to decrease the number of bills you have, you might have thought about discontinuing car insurance. 

Legally speaking, you cannot drive in any state in the U.S. without being able to demonstrate the financial ability to cover damages or injury liability in case of an accident. Other than New Hampshire (which has special requirements), every state requires auto insurance as the proof of that financial responsibility.  

Additionally, lenders typically require auto owners to carry collision and comprehensive insurance on top of legally mandated liability coverage as long as there is an active loan on the vehicle. 

The various car insurance coverages can be confusing, so read on and you’ll learn: 

• If you need auto insurance to drive 
• Why you should get auto insurance 
• What happens if you drive without auto insurance 
• Other uninsured issues

Do You Need Auto Insurance to Drive?

With one exception, the answer is yes, you need at least personal auto liability insurance to operate a motor vehicle legally. The one exception? New Hampshire allows vehicle owners the option to post cash bonds to cover accident liability. 

In the remaining 49 states and the District of Columbia, auto insurance is required by law. These jurisdictions also require mandatory minimums for coverage. Those numbers can range from: 

• Bodily injury liability: $10,000 to $50,000 per person and $20,000 to $100,000 per accident
• Property damage liability: $10,000 to $25,000 per accident 

Your insurance agent will know your state’s legal requirements and will help you get that amount or greater if you feel you need it. 

If you still owe on a car loan, you will also need property damage insurance for your vehicle. Those requirements end when you’ve paid the car off. 

Why You Should Get Auto Insurance

Personal auto insurance defrays the cost of repairs/replacement due to crashes, floods, theft, vandalism, and non-collision damage such as falling tree limbs and cracked windshields. It also gives you financial protection if you are held liable for injury to others or damage to their property. You can even insure yourself and your passengers for their health costs and income loss resulting from an accident. 

If you drive a vehicle with expensive customizations, you may wish to insure those as well. 

Your auto liability insurance can be written to extend to your use of other vehicles, such as borrowed or rented cars and trucks. And it can cover members of your household who don’t own a car and drive yours instead.

What Happens If You Drive Without Auto Insurance?

Driving without auto insurance is really unwise and can cost you more than just a fine. 

If You Get Pulled Over 

If you’re pulled over in a traffic stop and the officer discovers you’re uninsured, what happens next is up to the officer’s discretion and the laws of your state.  

If it is your first offense, you might simply be responsible for paying a fine (up to $500 in some states). In other situations, your license and registration might be suspended as well.  

In some states, the officer has the right to impound your vehicle, and you’d be responsible for any towing and other fees. And if it is your second (or more) offense, many states even reserve the right to jail you for lack of car insurance. 

What’s more, once you’ve been cited for driving uninsured, car insurance rates for a mandatory policy will drastically increase, since you will be listed as a risky driver. 

If You Get in an Accident 

If it’s discovered that you’re uninsured when you’ve been in an accident, the consequences can be severe. You’ll face fines and penalties and may have your license suspended and vehicle impounded. You’ll automatically become labeled an at-risk driver by insurance carriers. And it’s possible you’ll receive jail time, especially if you’re a repeat offender or you caused a serious accident. 

If you’re at fault: Financially speaking, if you were at fault and injuries or property damage occurred as a result of the accident, you will likely be responsible entirely for any costs.

Moreover, you could be sued by the other driver’s insurance company to ensure coverage for those costs, as well as face massive legal penalties. Personal and property damages from an auto accident could add up to a few hundred dollars to hundreds of thousands.

If you’re not at fault: Depending on your state, your compensation from an accident could be limited or nil. In no-fault states, you’re completely responsible for your own bodily injury and property damage claims. Without an insurance company, you’ll be responsible for the bills yourself. 

Other Uninsured Issues

There are other questions you might have related to driving uninsured. 

Is driving without auto insurance a felony? 

In most states, driving without car insurance is classified as a misdemeanor. As you’ve seen, your driving history and citation history—along with accident severity (if applicable)—will affect whether you are charged by the police. 

Do you need car insurance to drive someone else’s car? 

If you’re considering driving another person’s car (with their permission), make sure they have insurance on it. In essence, insurance is attached to the car, not the person. When you borrow a car, you’re also borrowing the insurance under “permissive use.” However, if you borrow a vehicle regularly, it’s important to consider non-owner vehicle insurance or adding yourself to the policy, as this can offer you better overall protection in the long run. 

Your insurance agent will help you compare policies, prices, insurance companies, and coverages so you get a personal auto insurance policy that you feel most comfortable with.  

For help finding the best car insurance coverage for you, request a quote here.