No one wants to add another bill or monthly payment to their budget. Which is why it is understandable that some drivers or car owners might consider going without car insurance. On top of the price, the process of buying auto insurance can be confusing, you need to know how much coverage you need, what insurance company to choose, what type of discounts you qualify for, and more.
Add in some of the common misinformation around car insurance and you can really start to understand why some people might be tempted to go without coverage. That said, car insurance is essential protection for you and your vehicle, and going without it could result in a huge financial loss — not to mention that you’d likely be breaking the law.
If you’re thinking about going without insurance for any of these reasons, here’s why you should reconsider.
1. My state doesn’t legally require car insurance
All but two states legally require drivers to have auto insurance for their vehicles, so the odds are that your state does require auto insurance. Driving uninsured in most states can result in a suspended license, expensive fines, and out of pocket costs if you get into an accident.
The only two states that don’t require auto insurance are Virginia and New Hampshire, but don’t be fooled, these two states do still have financial liability laws, meaning you will be financially responsible in the event of an accident. New Hampshire also requires drivers to pay up to a certain limit out of pocket for going uninsured and charges you penalties if you don’t pay. And Virginia requires an annual payment to the state if you decide to forgo auto insurance.
Basically, if you get into a car accident in Virginia or New Hampshire, and you don’t have car insurance, you will still be expected to pay for any damages or injuries you caused. In New Hampshire and Virginia, going without insurance might not result in a suspended license, but it does mean potentially paying thousands of dollars out of pocket after an accident. If you can’t afford to pay for the damages and medical expenses, you could end up being taken to court. That's why it’s always safer and more affordable to have a car insurance policy, no matter where you live.
2. It’s hard to find affordable auto insurance
Although car insurance isn’t the cheapest insurance product on the market, rates vary from driver to driver, and even the same person can get wildly different quotes from different carriers. Car insurance premiums are based on a number of individual factors, like your age, ZIP code, credit score, driving history, the make and model of your vehicle, and more.
Most insurance companies give drivers a number of ways to lower their premiums, like with policy discounts, including:
Safe driving discounts
Driver’s education discounts
Discounts for going paperless with your billing
Discounts for paying your premium in full (annually instead of monthly)
Learn more about car insurance discounts
Some insurance companies also offer usage-based savings programs that track your driving through a smartphone app or other device, and award discounts for safe driving behavior. This could be a good way to save for drivers who are confident in their driving or those who don’t drive often.
It’s also smart to shop around for new car insurance every few years, you may be able to find identical coverage for cheaper at a different insurance company.
3. Car insurance doesn’t cover that much
This actually isn’t true, unless you are underinsured. It’s important to have higher coverage limits than just your state’s minimum requirements — going underinsured could leave you on the hook for paying a large chunk of the bills in the event of an accident.
Every car insurance policy is made up of different coverage components, all of which provide a different type of protection. When you apply for a car insurance policy, you pick which components you want in your auto policy, plus your limits and deductible. The more coverage you have and the higher your limits are, the more expensive your premiums will be, but it also means you’ll have more protection in the event of an accident.
Here are the basic components of what’s typically referred to as a “full coverage” car insurance policy:
What It Does
Bodily injury liability
The part of your liability coverage that pays for medical bills if you've injured someone in an accident
Property damage liability
The other part of liability coverage, covers the cost of property damage you've caused in an accident
Personal injury protection
Covers medical expenses for you or your passengers after an accident
Covers the costs if you're in an accident caused by a driver with little or no car insurance
Covers damage to your car that happens when you're not driving
Covers damage to your car after a car accident, no matter who was at fault
Car insurance offers a wide range of financial protections — from medical expenses to the cost of getting your car repaired if a tree falls on it.
Learn more about what car insurance covers
4. I’m a safe enough driver that I don’t need car insurance
Unfortunately, just because you’re a safe driver doesn’t mean you’re never going to get into a car accident. No matter where you live, or how fast or slow you drive, there is always a risk that you could get into a car accident, or your car could be damaged some other way.
Car accidents aren’t the only incidents that can cause damage to your vehicle. Comprehensive coverage protects you from damages when you’re not driving. So if your car is vandalized, or your windshield is broken during a hail storm, you won’t have to worry about paying out of pocket for the repairs. Comprehensive coverage also covers theft in the event that your vehicle is stolen.
Safe driving is important, which is why insurance companies offer discounts to safe drivers. That said, safe driving doesn’t make you immune to sudden and accidental damage. At the end of the day, if you get into a car accident, you’re not going to get out of paying for the damages by saying you’re a safe driver.
5. I don’t own a car and only borrow other people’s
This is actually a fair sentiment. If you borrow your friend’s car infrequently, you are typically covered under their car insurance policy. Meaning if you get into an accident, your friend’s insurance will pay for the damage to the car.
If you borrow a car frequently or rent cars often, you may not need a standard auto insurance policy, but you should consider getting what is called “non-owner car insurance.” Unlike a standard car insurance policy, which protects the policyholder’s vehicle, non-owner car insurance only protects the driver. Non-owner car insurance typically only contains liability coverage, meaning it covers bodily injury (BI) and property damage (PD) from an accident you cause. However, some insurers may offer personal injury protection and uninsured/underinsured motorist coverage as add-ons.
You can also always ask your friend or a family member to be added to their car insurance policy. This is usually pretty easy to do. If you live with someone and borrow their car often, you should already be listed on their auto policy. Most insurance companies require every driver in the household be listed on a policy.
6. I don’t drive my car so I don’t need car insurance
This is another understandable argument. However, like we mentioned, it is illegal in almost all states to drive without insurance. Even if you rarely drive your car, you might need to in the event of an emergency, and if you don’t have car insurance then you’re risking fines and license suspension.
If your car is in long term storage and you won’t be driving it for months, you don’t need to have a full coverage auto insurance policy, but you should still keep your insurance. You can typically ask your insurance company to reduce your car insurance to comprehensive only insurance. This means while your car is in storage, you don’t have to pay for things like liability coverage, but your car will still be protected from damages that could happen to it while stored, like if something falls on your hood, or if animals infest the engine, or if your car gets stolen.
7. I don’t need car insurance because I don’t have a driver’s license
If you never got your driver’s license, and you don’t drive, then you do not need car insurance. And if you have a learner’s permit your parent’s car insurance will typically cover you, unless you own the car, in which case you might need your own insurance.
But if your license is currently suspended, due to an incident like a DUI, you might need to keep some form of auto insurance. If you get convicted of a DUI and your license is suspended, you’ll likely need an SR-22, which is the name of the form your insurer must submit to prove to your state that you have car insurance, even if you aren’t allowed to drive. The law will usually accept non-owner car insurance as sufficient enough coverage.
Frequently asked questions
Is car insurance really necessary?
Yes, it’s not only necessary but also important that drivers get car insurance. Nearly every state requires drivers to have a certain amount of insurance to drive. Besides the legal reasons, car insurance is also the most affordable way to protect yourself from having to pay out of pocket for repairs and medical bills after an accident.
Who doesn’t have to get car insurance?
Everyone (except for some drivers in New Hampshire and Virginia, where insurance isn’t required) has to get car insurance. Drivers may or may not need to get full coverage, but even people who own their own cars outright would have to get enough insurance to meet their state’s minimum requirements.
Why do we have to get car insurance?
Drivers have to get car insurance because it protects other people from having to pay for injuries or accidents that they didn’t cause. In no-fault states, insurance laws also provide drivers with a level of financial protection if they’re injured in an accident. Without any minimum requirements, it’s possible that even those who chose to get insured would underestimate the cost of an accident and end up underinsured and unprotected after an accident.