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- Most states require drivers to have liability car insurance to be on the road.
- If you're in a car accident uninsured, you could face legal penalties, including losing your license.
- Auto insurance premiums will increase if you're caught driving without auto insurance.
- See Insider's guide to the best car insurance companies.
Liability car insurance is required by state law in most states, excluding New Hampshire. Don't think you're getting away Scot-free if you live in New Hampshire, though. The state still requires residents to prove financial responsibility (i.e. you'll be able to pay for a certain amount of auto damage if you cause an accident). Auto insurance remains one of the most accessible ways to meet this obligation for most people. In 2017, 13% of motorists (or 1 in 7 drivers) were uninsured, according to Michael Dietry, assistant vice president of personal line products and services at Dairyland Insurance.
What happens if you're in an accident and don't have car insurance?
Suppose you drive uninsured, are in a car accident, and are subject to a lawsuit. In that case, you may incur fines, suspension of your driver's license or car registration, and increased premiums once you get car insurance. Unfortunately, these state-based penalties apply even if the accident was not your fault.
Each state has distinct minimum car insurance requirements. Most states require liability coverage to cover damages to the other vehicle, driver, and passenger. In New Hampshire, the amount of financial responsibility also meets that threshold. However, some states also require PIP for limited medical costs for you and your passengers. If you don't have insurance and cause the accident, the driver and passengers may sue you to recover damages.
However, in "no-fault" states "every driver [has] to file a claim with their own insurance company after an accident, regardless of who was at fault" according to the Insurance Information Institute. No-fault states include Florida, Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, and Utah.
If someone else causes the accident, some states limit the rights of uninsured motorists to sue.
Penalties for not having car insurance
If you are pulled over or in a traffic accident and do not have car insurance, depending on your state, you will be fined, face suspicion of your driver's license and car registration, and may be required to get an SR-22.
Although it is commonly referred to as SR-22 insurance, it is not insurance. SR-22 is a certification typically required for high-risk drivers that states they carry the minimum insurance coverage required by law. The car insurance provider files it with the state's DMV, declaring that the driver meets minimum coverage requirements.
Most states require SR-22 certification for three years. However, if your insurance lapses or expires within three years, your car insurance provider must notify the state. A lapse in insurance could incur further penalties.
Driving without insurance will increase your premiums once you get coverage
Even if you have insurance, having a car accident can increase your premiums. Being uninsured and in a car accident means that when you finally get car insurance, your premiums will be higher than the average drivers because you will be viewed as high-risk.
You will need SR-22 certification and car insurance.
How long will accidents impact my driving record?
Every state handles this differently, but typically three years is the average time an accident stays on your driving record. For example, the New York DMV keeps "accidents and most traffic convictions are only displayed until the end of the year in which the accident or conviction occurred, plus 3 additional years." However, "vehicular homicide may be displayed permanently."
You should check with your local department of motor vehicles (DMV), because some states have longer times on your driving record if the accident was due to driving under the influence (DUI/DWI), while others don't.