- Drivers are required to carry car insurance in nearly all states
- Not carrying car insurance can have severe consequences, include steep fines
- Drivers should understand the different insurance policy types available to them
Paying your car insurance premium can be a necessary evil. It can be painful to part with your hard earned money each month and have it seem like you are getting nothing in return. However, what many consumers do not take the time to realize is that they are purchasing the protection and peace of mind that auto insurance provides. Not only that, but car insurance is a legal requirement nearly anywhere you go in the United States. If you are having difficulty paying your auto insurance premium, it may be time to get an online quote with the help of an online comparison tool. These tools make getting several quotes fast and easy, allowing you to compare policies and choose the best quote for you. Compare car insurance rates now by using our FREE tool above!
Car Insurance is Legally Required
If for no other reason, you should have insurance on your vehicle because it is legally required. Though the policy types and coverage amounts required can vary from one state to the next, all states, except for New Hampshire and the District of Columbia require drivers to carry car insurance. In New Hampshire, if drivers do not purchase car insurance policies, they are required to show that they have the financially ability to pay for their part in an accident. Costs could include medical care, repair or replacement damaged property, and even costs related to a death.
What Happens if I am Caught Driving without Insurance?
Driving without the protection of auto insurance can be a very serious offense, even if you are not in an accident. Consequences for not having insurance or having the appropriate amounts and types of insurance will vary by state. However, they generally include the following:
- Fines, up to and over the $1000 mark
- Suspension of your driver’s license
- Suspension of car registration
- Community Service
- Required purchase of SR 22 Insurance Policy
- Having the vehicle impounded
- Citation or warning for driving without insurance
It is important to note that being caught without having insurance more than once will lead to even more serious consequences. In addition to fines from driving without insurance, it is also costly to get your license and registration reinstated.
Driving without insurance can be very costly.
In addition, if you are involved in an auto accident and do not have insurance coverage or have enough insurance coverage, the financial implications can be very far-reaching, which put you and your family at risk.
Types of Car Insurance
The laws in the state where you live will dictate what types of car insurance coverage you need and the limits you must purchase. It is important to understand even the non-legally required types of coverage to make sure that you are properly protected in the event of an accident or other unforeseen circumstance.
- Liability- Liability is the minimum amount of insurance that is legally required. It comes into play if you are at fault for an accident. There are two types of liability insurance, bodily injury, and property. Bodily injury covers the cost of medical expenses in the event of an accident. Property liability covers the cost to repair or replace property, such as another vehicle. Some drivers will choose to only have liability coverage if they own their own car and the car is not of high value.
- Comprehensive- This type of coverage protects you in the event that your car is damaged by something other than an accident with another vehicle. It covers costs from hitting wildlife, theft, vandalism, hail, and other weather events. Comprehensive coverage allows the driver to choose their own deductible and limits.
- Collision- Collision coverage pays for damages if you are in an accident that causes damage to your vehicle. This part of your auto policy will pay for repairing or replacing your car after an accident. Drivers can select their deductible and policy limits with collision coverage.
- Med Pay- Med Pay, also known as Medical Payments, or Personal Injury Protection (PIP) provides payments for medical bills, and in some states will cover lost wages or the cost to hire household help that is needed as a direct result of an accident. Med pay is usually offered up to $5,000.
- Car Rental- Some car insurance companies allow you to select car rental coverage. This means if your car is damaged in the event of an accident, your car insurance policy will cover the cost of renting a car until yours is repaired or you are able to secure a new car.
- Gap Insurance- Gap insurance is a good idea for all drivers with loans or leases on their vehicle. In fact, many loan contracts and leasing agreements require it. Gap insurance will pay the difference between what the insurance company pays for your vehicle if it is considered to be totaled and what is still owed on the loan or the lease.
What is SR 22 Insurance?
SR 22 insurance is also known as Statement of Responsibility. It is an official document that may be required, depending on where you live, to prove that you are carrying the required car insurance. SR 22 is commonly necessary if you are caught driving without insurance coverage on your vehicle, a DUI, or being involved in a car accident when you do not have auto insurance. You can also be required to obtain SR 22 insurance if you are found guilty of multiple traffic offenses within a short period of time or have had your license suspended or revoked for any reason.
This type of insurance can be more expensive and also harder to find. Once you have obtained it, your insurance company will need to file a form with your state’s DMV to prove that you have auto insurance. Depending on your circumstances and the state where you live, SR 22 insurance is generally required for about three years.
Can I Register My Car but not Have Insurance?
The answer to this question depends on the area in which you live. In some states, such as Connecticut, it is illegal to operate your vehicle without the proper auto insurance coverage. registering, owning, or parking your car on the side of the street without insurance is not illegal. However, other states take a different approach, such as the District of Columbia, where drivers can face the aforementioned consequences for simply having a car that is registered but does not have insurance coverage.
Drivers should check on the local laws in their state to find out what the requirements are.
It is important for all drivers to make sure they carry the legally required amounts of car insurance, as well as enough to protect their own assets. While the legal requirements of car insurance can be a difficult bill to pay each month, you can potentially lower the price you pay on your premium by using an auto insurance quote comparison tool online. Enter your zip code in our FREE tool below to compare car insurance rates now!