At least some amount of car insurance coverage is legally required in most states in the U.S. Unlike, say, life insurance, which is a good idea but optional, car insurance is mandated for most drivers. That’s just one of the reasons it’s smart to keep proof of insurance on you when driving.
If you live in a state where car insurance isn’t legally required, you still need to be able to pay for any damage or injuries you cause with your car. The best way to make sure you can do that is, well, to have car insurance. But what happens if you get into an accident without insurance?
The severity of the consequences will depend on where you live, who was at fault, and how much damage the accident caused. But no matter what, getting into an accident when you don’t have insurance isn’t going to be a simple fix.
There are two states that don’t legally require you to have car insurance: New Hampshire and Virginia. In Virginia, you must pay the state Department of Motor Vehicles a $500 fee to be able to drive uninsured. And in both states, if you’re driving without insurance, you’re still financially responsible for any property damage or injuries you cause.
So if you get into an accident without insurance in either of those states, a few things can happen.
If you were the at-fault driver in the accident and you don’t have insurance, you’ll have to pay out of pocket for any damage or injuries you caused — even though you don’t have coverage, the other driver has the right to recover damages from you, meaning they can sue. Car insurance will cover legal fees, but if you’re uninsured, that would also be an out-of-pocket expense.
Depending on the severity of the accident, you may also have to report the accident to your state’s DMV. You also risk having your license suspended and other serious consequences.
If the other driver is at fault, you’d file a third-party claim with their insurance, and that should cover the damage or injuries they caused. If they also don’t have insurance then they’re still responsible for paying you for any damage or injuries they caused.
You also have the right to take them to court — but you should check your state’s statute of limitations. Most states give you three years to file a lawsuit against another driver after an accident, so if you drag your feet too long, your window of opportunity may close.
Most states do require at least a minimum of car insurance coverage, and getting caught driving without insurance, even if you haven’t had an accident, can lead to serious consequences. Some of the penalties for driving without insurance can include:
And that’s just for driving without insurance. What if you get in an accident?
If you have an accident and you’re the at-fault driver, you’ll face penalties for driving uninsured and be on the hook financially for any damage you cause. The driver can also sue you, and you’d have to pay all your legal fees out of pocket too.
If you don’t have the money to pay for the damage and injuries you caused, the court may allow the other driver to recoup those costs through wage garnishment. The combined costs for causing an accident could be thousands, maybe even tens of thousands of dollars — much more than you’d save by not paying for car insurance.
But this also depends on where in the U.S. you are. There are 12 states that are called no-fault insurance states, where drivers must get compensation for damage and injuries from their own insurance company, no matter who was at fault in a car accident. If you were driving uninsured and caused an accident in one of those 12 states, the other driver will be paid out from their own insurance. Unless you cause above a certain threshold of damage, you may not owe them for the damage and injuries you caused.
What about if you were driving without insurance and another driver causes an accident? If you don’t have your own car insurance, your state may place limits on the what you’re able to get from that driver and their insurance. And you’ll still face penalties for driving without insurance.
If car insurance seems too expensive, or if you’re worried that a poor driving record will make it hard for you to find affordable insurance, a Policygenius expert can help you find a policy that fits your budget and your needs.
If you have a history of lapses in your car insurance coverage, you may need to look into what’s called high-risk auto insurance, or nonstandard auto-insurance. Most major carriers will insure high-risk drivers, but at a higher cost than standard policies. However, if your record is especially poor, you may to check out smaller companies that specialize in writing policies for high-risk drivers.
Anna Swartz is a Managing Editor at Policygenius in New York City, and an expert in auto insurance. Previously, she was a senior staff writer at Mic, writing about news and culture. Her work has appeared in The Dodo, AOL, HuffPost, Salon and Heeb.