Driving without insurance is illegal – not to mention, financially risky – but that doesn’t stop some drivers from doing it. A study by the Insurance Research Council found that approximately one out of eight U.S. motorists in 2012 lacked any insurance coverage.
The penalty for driving without insurance can be steep – hundreds of dollars in fines and the revocation of your driver’s license, for example – but that’s nothing compared to the potential out-of-pocket costs of an accident without proper protection.
Even a small lapse in insurance coverage can set you afoul of the law, so consider the following tips to avoid problems:
- Don’t miss insurance payments. A late insurance payment can cause your insurance company to cancel your policy.
- Don’t allow a lapse when changing insurers. You should not cancel your old insurance policy until you know your new policy has taken effect.
- Don’t just stop making payments. If you’re canceling a car insurance policy, let the insurance company know, or you could end up being responsible for late fees.
- Don’t just drop insurance if you take a car off the road. If your car is no longer being driven, don’t drop your insurance before checking with your state’s DMV to learn the rules for legally dropping insurance coverage. You may also want to look into car storage insurance, which will protect you against damage to the vehicle while it’s being stored.