If you’ve ever thought about skipping car insurance for your vehicle, you’re not alone. According to a study by the Insurance Research Council, 13 percent of drivers go without car insurance nationwide. With the high cost of insurance policies, the impulse to go without is understandable.
However, driving without insurance can have serious consequences. A single incident could cost you thousands in repairs, damages, and medical bills. You could end up facing legal charges, too.
The need for car insurance
There’s no getting around it — car insurance is expensive. The average policy costs drivers $1,323 per year, according to The Zebra. When you’re struggling to afford rent, student loan payments, and groceries, coming up with an extra $100 or so a month can feel impossible.
Matt Danielson, a partner at the Motorcycle Law Group, explains that the financial burden can be much harder for some people.
“[People go without insurance] because they do not want to pay for it,” said Danielson. “Especially those with bad driving records. Their premiums can be sky-high.”
But before skipping insurance to save money, it’s essential that you understand why it exists in the first place.
The Association for Safe International Road Travel reports that road crashes cost drivers in the United States $230.6 billion a year (or $820 per person), on average. Over 2 million people are injured or disabled from car accidents each year.
Why are those numbers important? Car insurance is designed to protect people from losing money or going without medical care as a result of an accident. It provides a critical safety net that provides coverage for you, your passengers, the person in the other vehicle, and any property damaged in an accident.
5 huge consequences of driving without insurance
1. You’ll get in trouble with the law
Forty-eight states require all drivers to have car insurance; only New Hampshire and Virginia do not. But that doesn’t mean residents in those states can stop worrying about the consequences of driving without insurance.
In New Hampshire, the law doesn’t require you to carry insurance. However, you must be able to prove that you have enough money to meet the New Hampshire Motor Vehicle Responsibility Requirements if you cause an accident. If you don’t fulfill those requirements, the government might suspend you from driving.
“In Virginia, you can drive without insurance if you pay the state $500 per year,” said Danielson. “I would advise you to use that money to purchase insurance [instead].” The $500 uninsured motor vehicle fee doesn’t provide any coverage; it only allows you to drive legally at your own risk.
In other states, the legal ramifications of driving without insurance can vary, but you’ll likely receive a ticket or fine if the police catch you. Depending on the state, the fines can be in the thousands.
2. You could lose your license
If you’re pulled over and don’t have car insurance (or meet the alternative requirements), your license could be temporarily suspended.
Without it, you won’t be able to drive yourself to work or take your kids to school. Instead, you’ll have to rely on carpooling or rideshare services until the suspension is over.
If you’re caught driving without insurance more than once, you could lose your license entirely. That means you’ll have to pass a new driving test — just like the one you took to get your license as a teenager — after a waiting period before you can legally drive your car.
3. Your car could be impounded
If you’re caught driving without insurance coverage, your car could be impounded in some states. A tow truck will take your car to a storage lot and you’ll have to pay a fee to get it out, along with towing and storage charges.
You might even have to wait a few days before you can get the car out of the lot, causing fees to rack up in the meantime.
4. You’re on your own for repairs and bills
If you’re at fault in an accident and damage another person’s vehicle, you’re responsible for covering their repairs out of your own pocket. Keep in mind that those repairs can be in the thousands. For example, fixing a bent frame can cost $10,000 or more, depending on the make and model of the car, reported Insurance.com.
On top of paying for repairs for the other person’s car, you’ll also have to pay for your own vehicle’s damages. You could end up having to replace the car entirely if the damages are extensive, adding thousands to your expenses.
5. You could be sued
Potentially worst of all, you risk a costly lawsuit by driving without car insurance.
“The financial consequences [of driving without insurance] are being personally liable if you injure someone or destroy their property,” said Danielson.
If someone is injured, experiencing emotional distress, or becomes disabled and cannot work due to the accident, a lawsuit could bankrupt you.
If you have insurance, your insurer will help cover your legal fees and the medical bills and damages of the other person. Without insurance, you’ll have to come up with the money on your own.
Finding a cheaper policy
When it comes to insurance, the consequences of driving without it are so severe that Danielson believes that not getting a policy shouldn’t be an option.
“Don’t do it,” he said. “Don’t even think about doing it. Make sure that you are covered so that if someone hurts you and they don’t have any insurance, or they don’t have enough insurance, you are still covered.”
If you’re motivated to get car insurance but need an affordable policy, these tips can help you get the best price.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|