Throughout the United States, it is common that vehicle owners are expected to carry auto insurance liabilities coverage with minimum amounts of $25,000/$50,000 bodily injury (depending on the number of victims) and $10,000/$15,000 for destruction of property. The actual minimums are set by the DMV in each state. If you allow your insurance policy to lapse, you are still financially responsible.
The U.S. is cracking down on uninsured vehicle owners. Many states have laws stating that uninsured drivers are not entitled to damages from another driver if that other driver is at fault. In Michigan, uninsured drivers must pay for 100% of damages they cause in an accident while those with insurance receive a liability cap of $500.
Say you are in an accident and have allowed your auto insurance to lapse or become cancelled. You can be in serious trouble. According to the Utah DMV, your license can be suspended until you have fully repaid bills for all damages and injuries cause to the other driver/drivers or have offered proof that you have insurance or have the available funds to pay for the damages or injuries. If you fail to pay or prove financial responsibility, you will lose your license for as much as six years. Can you afford to go without your license for six years?
In Vermont, you must have the same minimum coverage or proof that you have $115,000 readily available in a bank account. Vermont will fine all uninsured drivers in accidents a minimum $100 fine, issue points against their license and the license is suspended until financial responsibility documents are filed with the state.
Texas requires proof of financial responsibility or insurance coverage before you are given your driver’s license. Getting caught without insurance once leads to fines of up to $350. A second offense comes with fines of up to $1,000 and can lead to your vehicle being impounded for six months. The state does not allow for financial hardship. If you are in an accident, you are liable for any damages caused.
In California, auto insurance liabilities amounts are lower at $15,000/$30,000 bodily injury and $5,000 property damages. Yet the penalties for driving without insurance are pretty stiff. You lose your license for a year, your vehicle’s registration is suspended until proof of insurance or financial responsibility is provided, your car can be impounded and you can be held financially responsible for any damages incurred in an accident.
Having proper insurance coverage is crucial. Make sure you know your state laws and are meeting the requirements set forth by your state’s DMV.