In most states, driving a car without auto insurance is illegal and may result in fines, suspensions and jail time if you’re pulled over and found to be uninsured. Even if you get off lightly with these penalties, you’re still looking at the possibility of lawsuits if you’re in an accident, and likely higher auto insurance rates when you eventually get car insurance.
While auto insurance companies usually have a grace period to get your current coverage onto a new car, this shouldn’t be confused with not needing coverage at all when buying a car. You need to have auto insurance when buying a new or used car off the lot. There is no grace period for driving without car insurance.
This article will cover:
- Do you need insurance to drive?
- What can happen if you drive without insurance
- If you’re in an accident with no auto insurance
- What is the grace period for insuring a new car?
Can I drive a car without car insurance?
The majority of states have laws that require drivers to carry minimum liability car insurance limits. If you purchased a car through a lender, they will require you to carry these same limits as part of your financing contract. These requirements are usually the state’s liability limits, sometimes including uninsured/underinsured driver coverage. Uninsured/underinsured insurance provides coverage for medical and personal property damage in the event that you get into an accident with someone who is driving without car insurance, or with insufficient coverage.
There are some states that do not require auto insurance when you drive. However, they require you to accept financial responsibility in the event that you are found responsible for an accident. The states that don’t require basic car insurance coverage and their alternate requirements are:
|State||Alternate car insurance mandate|
|Florida||$10,000 Personal Injury Protection (PIP).|
|Massachusetts||Instead of carrying basic liability, you may deposit $10,000 with the State Treasurer or get a liability bond equal to state limits.|
|New Hampshire||Financial responsibility for bodily injury or property damage in the event of a car accident.|
|New Jersey||Minimum $15,000 PIP.|
|Vermont||$55,000 surety bond or deposit with comptroller or county judge.|
|Virginia||$500/year DMV fee, plus acceptance of financial responsibility if you cause injury or property damage.|
What happens if you drive without car insurance?
The penalties for driving without valid auto insurance vary from state to state and how many offenses you have, but often include:
- Tickets and fines.
- Driver’s license suspension.
- Vehicle registration suspension.
- License plate confiscation.
- Vehicle impoundment.
- SR-22 filing.
- Jail time.
- Wage garnishment.
License suspension in the event of driving without car insurance is common in many states. Some states impound your car. States with mandatory license suspension include:
- New Hampshire
- New Mexico
Keep in mind that although some states do not mandate license suspension, they may still reserve the right to suspend your license.
Depending on the state where you live and the number of offenses you have, you could see fines ranging from $50 to $3,000. In terms of jail time resulting from driving without insurance, you could be behind bars anywhere from 10 days to a year.
Driving with fake auto insurance documents has become a growing problem. If you are found driving with falsified auto insurance documents, whether knowingly or not, you may face penalties for driving without insurance as well. You could also see a felony charge.
If you’re in an accident without insurance
If you are in a car accident without insurance, it can be bad whether you’re at fault or not. If injuries or property damage arise from an accident where you were driving without insurance, you could wind up paying thousands of dollars out of pocket in medical bills and lawsuits.
Some states have “No pay, no play” laws. This means you only get limited compensation if you’re injured or have property damaged in an accident where you were driving uninsured. According to IRMI, “The theory is that those who do not buy insurance should not receive benefits from those who do purchase it.” No pay, no play states include:
- New Jersey
- North Dakota
Is there a grace period for driving without insurance?
Simply put, there is no grace period for driving without insurance at all. Whether you’re buying a new or used car, you’re supposed to have auto insurance in place at the time of purchase.
The specifics of your current auto insurance extending to a new car will be detailed on your car insurance declaration page. Usually, car insurance providers give you two weeks to add a new car to your current vehicle’s policy. You need to contact them and add the vehicle to your coverage before that time frame ends. Otherwise, the temporary coverage will lapse.
If you’re replacing your current car with a new one, auto insurance companies give 30 days of interim coverage for you to add the new car to your policy. Keep in mind, the new car will have the same coverage limits as the old car. Make sure they reflect the insurance needs of the new vehicle.
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