Some people feel that the choice to buy car insurance should be left to the discretion of a driver. It's true that you are the one who will have to pay for damages if you don't have insurance. But if you don't have enough money to pay, your lack of insurance can devastate the lives of other people, too. That's why it is mandatory to carry liability insurance in most states. Those caught driving without insurance can lose a license, get fined and sometimes even serve jail time.
Liability for Negligence
Before you get all fired up about the fact that your state requires you to have auto insurance, remember that each person is responsible for the damage he causes through negligence. For example, if you are rollerskating down the sidewalk, lose control and knock someone over, you have to pay for any damages or injuries. This could be hospital bills, a smashed cellphone and the time anyone has to take take off work because of the accident.
Most of us don't skateboard on the sidewalk, but most of us do drive. Consider how much more damage you can do if you "lose control" of a vehicle. Think of the medical bills, the emergency room costs, the car damage, the pain and suffering, the lost wages. It could easily come to tens of thousands of dollars, and if you have that type of cash sitting around, you are unusual. If you don't have enough money, the person you hit is in a world of financial hurt, along with their bodily damage.
That's the thinking behind the state laws mandating that a driver carry liability insurance. That's one of the types of insurance mandated in most states, and it covers damage that a driver does to others. This includes payment for bodily and for property damage like damage to the other car. Although every state sets its own limits, generally you have to purchase insurance that provides this liability coverage:
- $25,000 bodily injury for one person
- $50,000 total bodily injury per accident
- $25,000 property damage per accident
Note that insurance to cover property damage to your vehicle or your own medical bills are not included in liability insurance. This insurance covers other people's damages. You can also purchase "med pay" to cover any medical bill you incur from an accident, as well as uninsured motorist coverage, to cover your damages if the other driver is not insured, but these are not universally required by states.
Read More: What Does Liability Insurance Cover?
Requirements and Penalties
State laws always differ. Every state's minimum liability insurance requirements differ, and penalties for driving without insurance also differ. But all states will hit you with steep penalties for driving without insurance.
Check with your DMV for the specific penalties that apply in your state. Some of the most common penalties for driving without insurance include:
- driver's license suspended
- vehicle registration suspended
- significant traffic ticket fines
- SR-22 requirement
An SR-22 is also called a certificate of financial responsibility. It is a certificate issued by an insurer guaranteeing that you meet your state's insurance requirements and will continue to meet them for a specific period of time.
If you think you have 30, 60 or 90 days from the time you buy a car until you must get insurance, think again. You are liable for damages from the moment you purchase the car, and you are also responsible for following state laws about insurance. If you have an accident, you are liable for damages on the first day, even the first hour you drive it.
Most states require that a car owner carry liability insurance to pay for damage to other people and vehicles. New Hampshire does not, but you are still liable for any damages you cause.
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.