A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 19, 2021

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Here's what you need to know...

  • In most states, car insurance is a legal requirement
  • Depending on the state, not having car insurance can lead to several very serious legal and financial consequences
  • You can take steps to decrease your auto insurance premium if your current rates are too high

Most of us can see a direct correlation between paying our bills and keeping our lives running as they should. For instance, if we do not pay our electric or water bill, we know our utilities can be shut off, immediately making our life more difficult. If we don’t go to the store and buy groceries, we will have an empty kitchen and hungry family members.

However, what happens if we do not pay our auto insurance? Sure, it will be canceled, but in itself, that consequence isn’t very painful. Paying your car insurance bill each month can make it seem like you are throwing money down the drain. Even so, you should be aware of why having car insurance coverage is so important. If you are finding it difficult to keep up with your car insurance premium payments, it could be because you are paying rates that are too high. Try using an online auto insurance price comparison calculator to be sure you are paying the best rate available. Compare car insurance rates now by using our FREE tool above!

Compulsory Auto Insurance

High auto insurance premiums can leave you wondering how you can get away with no car insurance. Simply put, it is not worth the risk of being caught. Unless you live in Washington DC or the state of New Hampshire, you are legally obligated to have at least some amounts and types of auto insurance coverage on your vehicle.

Even so, in New Hampshire, you are required to prove that you have the financial means available to pay for damages that might occur due to an auto accident. Obtaining and keeping your auto insurance coverage current is not only legally required, it also protects you and other motorists.

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Legal Consequences of No Auto Insurance

If you do not follow your state’s laws regarding auto insurance coverage on your vehicle, you can face a wide variety of legal and financial consequences. Many of these consequences are far reaching and can last several years. Before deciding that you do not need auto insurance coverage and will risk getting caught, consider these consequences:

  • Suspension of your driver’s license
  • Suspension of your vehicle registration
  • Arrest
  • Jail time
  • Probation
  • Fines of up to $1000 or more
  • SR 22 insurance requirement
  • Community service

These consequences will vary by state. It is important to realize that if your driver’s license or car registration is suspended, you will need to pay to get them reinstated. You also may need to wait several months to be able to do so. In addition, if you are ordered to have SR 22 insurance you may find it more difficult to obtain insurance coverage and will find your premiums to be higher.

Other Consequences

If you are to get into an accident or have damage to your vehicle while not having insurance coverage, you could be financially responsible for the damages. This means you could be liable for thousands of dollars in medical bills and to pay to repair or replace and property damaged in the accident.

Not paying for these expenses could force a civil lawsuit against you. If you lose such a lawsuit, you could potentially have your wages garnished, liens placed on your home or other property, or the loss of valuable property to help pay for the damages you have caused.

Car Insurance Requirements on Leased Vehicles or Vehicles with Active Loans

If you are leasing your vehicle or still owe on your car loan, you are more than likely contractually bound to having auto insurance coverage. Not having coverage can leave you in a bind in the event of an accident.

Not only are you breaching your contract with the lease company or bank, you could be liable for paying for the damages you cause to your car.

Check with your bank or leasing company to be sure you are complying with your contract regarding insurance coverage on your vehicle.

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How to Decrease Your Car Insurance Premiums

While you can’t really change the auto insurance requirements in your state, there are ways to decrease the amount that you pay for your car insurance premiums.

  • Shop Around: Get quotes from several different car insurance companies. Shopping around like you would for any other major purchase will help you find the best rates for your vehicle.
  • Increase your deductibles: Increasing your deductibles will generally lower your premiums. However, you should be certain that you have the financial means to pay the higher deductibles if you should need to file an insurance claim.
  • Drop non-essential coverage: Not all types of insurance are required in every state. Depending on your car and driving situation, you may save some money by dropping the types of insurance that your state does not legally require you to have. Again, you should be sure you have the financial ability to pay if you drop certain types of coverage.
  • Car pool or drive less: Driving less mileage can help decrease your auto insurance premium. Joining a car pool or biking to work can be one of the fastest and easiest ways to decrease your annual mileage and start saving money. When this change has occurred, be sure to call your auto insurance company and notify them so that you can get your lower premium.
  • Consider purchasing a different car: The type of car you drive can impact your car insurance premium. Some cars have better safety features and are less likely to be vandalized or stolen. Some cars do better in accidents or are less likely to be involved in an accident. Purchasing one of these cars can help decrease your auto insurance premium. Talk with your insurance company to learn more.
  • Ask about discounts: Depending on your car insurance company, there are likely several discounts available that you may qualify for. However, you may have to ask in order to be able to receive them. Generally, car insurance companies will offer discounts for good driving records, taking a defensive driving course, good student discounts, senior or military discounts, multi-policy discounts, and low-mileage discounts.

While no one really likes to pay for car insurance coverage, it is extremely valuable to have. The risk of not having car insurance coverage is a financial burden no one wants to bear and could even ruin your life.

You can decrease the amount you are paying for auto insurance premiums by asking about discounts and shopping around.

The easiest way to shop around for auto insurance is to use a car insurance price comparison tool online. These tools help you quickly find a quote that fits within your budget and gives you the coverage you need. Enter your zip code in our FREE tool below to get instant car insurance quotes!