We have all at some point in our lives as we sat down to pay our bills wondered it the monetary savings in not paying the car insurance premium would be worth the gamble.
There is some kind of a statistic which suggests we only need to use our automobile insurance every 160,000 miles or thereabout. If that be the case and we only drive 30,000 miles in a year, we could go over 5 years without insurance and then in the 6th year purchase insurance to cover the statistical chance, keep it for one year and then drop it for another 5 years. If life were only that simple you could just take the gamble.
Yet, even Nevada where gambling is legal, state law has something to say about your choice not to be insured. If you choose to abstain from purchasing insurance and are involved in an accident, whether you are at fault or not, your vehicle registration will be suspended. If you have gone without car insurance for less than a month, you will pay a $250 reinstatement fee to get your registration back, but if you have gone over 181 days without insurance you will pay $250 of reinstatement fee and an additional $1000 fine and have to file an SR22 with the state. Good luck on finding an affordable rate.
It is interesting to see how each state deals with car insurance. Two states have no mandatory insurance requirement, New Hampshire and Virginia. However, both of them do hold you responsible for up to $50,000 liability and $25,000 property in the event of an accident. If you cannot cover that amount, the state will still suspend your license and registration. Virginia allows you to pay $500 to register your vehicle, but there is no insurance benefit with having made that payment.
There are 30 states which will allow you to meet the financial responsibility provision of insurance by a bond equal to the amount required to meet the minimum or to deposit cash to cover that amount. Keep in mind if those amounts will not cover the loss incurred, you will still be liable for the excess. You put your own assets at risk in any scenario where the loss is more than you insured for by either bond, cash deposit, or insurance coverage.
Taking a quick trip across the nation you find states have individual and unique provisions for dealing with people who do not want to carry insurance.
California–if you are caught without insurance will fine you anywhere from $100 to $200 for the first offense; the second offense will cost between $200 and $500 with license being possibly suspended for up to 4 years. You may be able to get your license reinstated after one year if you can obtain valid insurance and carry a SR22 policy. This applies whether you are at fault or not in an accident.
Jumping to Massachusetts–driving without insurance is addressed in Chapter 90, Section 34J of the General Laws of the Commonwealth: 1) First offense, license suspension for sixty days with fine of not more than $500. Additional $500 or one year’s payment for car insurance for the highest rated territory and class risk in effect at the time of the commission of the offense, whichever is greater. 2) Second and subsequent convictions (within 6 years of prior offense,) license suspension, fine from $500 to $5000 or imprisonment of up to one year in penal institution. Additional $500 payment to risk plan.
Going to Louisiana–if no proof of insurance, car can be impounded and license plates removed and a yellow sticker attached to the back of the windshield. If you fail to carry car insurance and are involved in a collision with another person who does have proper coverage, Louisiana’s “no pay, no play” law stops you from collecting the first $25,000 in property damage and $15,000 of personal injury even if the other person caused the accident.
Down to Tennessee–$300 fine and car towed away.
Across to Utah–they have a tracking system called Insure-Rite which tracks valid insurance you are required to provide. If you don’t provide it, your vehicle registration will be cancelled. Driving without insurance is a class B misdemeanor which carries a $400 fine for first offense and $1000 fine for subsequent offenses.
Since Utah went to this Insure-Rite system, uninsured drivers have dropped to an estimate of 4%, down from national average of 12.6%.
In summary, as tempting as it may seem to gamble with driving uninsured, it takes only one event to make that gamble not worthwhile. Though not very advisable to go with just minimum requirements mandated by the state, it would be a whole lot better than going without–one of those things we just do because it makes good sense to do it. Sure makes driving a whole lot less stressful knowing you are being financially responsible and meeting your civic duty.