Expired Auto Insurance: What To Expect And Prepare For

Driving without insurance is illegal in most states, and a lapse in coverage can lead to serious legal and financial repercussions. If your auto insurance has expired, you may face consequences such as fines, license suspension, or even prison time. In addition, if you are involved in an accident while uninsured, you will be personally responsible for all damages, which could result in bankruptcy. It is important to reinstate your insurance coverage as soon as possible to avoid these penalties and ensure you are protected financially in the event of an accident.

You'll be liable for any property damage or injuries incurred in an accident

If your auto insurance has expired, you are no longer covered by your insurance company and will be personally liable for any property damage or injuries incurred in an accident. This means that you will have to pay out-of-pocket for any damages to your own car, as well as the other driver's vehicle, and any other property damaged in the accident. You will also be responsible for any medical expenses incurred by the other driver and their passengers, as well as any of your own passengers.

The financial burden of an accident can be significant. An accident with no physical injuries can cost around $4,700 in property damages, while a serious motor vehicle injury could result in damages of $29,200 or more, and a death could cost over $1,000,000. Without insurance, you will be responsible for these costs, which could easily lead to bankruptcy.

In addition to the financial burden, there are also legal consequences for driving without insurance. You could be cited for driving without insurance, which could result in penalties such as fines and even jail time, depending on your state's laws. Your Department of Motor Vehicles (DMV) may also impose penalties, such as suspending your license and/or vehicle registration.

To avoid these financial and legal repercussions, it is crucial to maintain continuous auto insurance coverage. If your insurance has expired, you should act quickly to renew your policy or purchase a new one. Contact your insurance provider to inquire about reinstating your coverage or explore other options for obtaining insurance.

You may be fined, have your license suspended, or face prison time

Driving without insurance is illegal in most states, and if caught, you may be fined, have your license suspended, or even face prison time. The penalties vary depending on the state and the number of offenses. For example, in New York, drivers can lose their license and vehicle registration for a year and have to pay a fine of up to $1,500. In some states, fines for the first offense can be as high as $500, and for multiple offenses, the fines can increase to $2,000. Additionally, license suspension or revocation and imprisonment for up to six months are possible consequences.

If you are caught driving without insurance, your Department of Motor Vehicles (DMV) may impose penalties such as fines and the requirement to file an SR-22 for several years, which adds an expense to your next auto policy. Furthermore, driving without insurance can result in your vehicle being impounded by the authorities.

It is important to note that even a short lapse in insurance coverage can lead to higher insurance rates or difficulties in obtaining insurance in the future. Insurance companies may consider you a higher risk if they see that you had a period without insurance. Therefore, it is crucial to maintain continuous car insurance coverage, even if it is the minimum amount required by your state.

Your insurance rates could increase

If you let your auto insurance expire, your insurance rates could increase when you renew your policy or start a new one. This is because insurers view those with lapsed coverages as "high-risk". The longer you go without insurance, the more your rates could increase. For example, Progressive's rates increase by 2.15% after a lapse, while Nationwide's rates increase by over 16%.

Additionally, if you have a history of claims, you may be viewed as a higher-risk customer and be charged higher insurance premiums. This applies even if you weren't at fault for the incidents that led to the claims.

Your rates could also increase if you lose certain discounts. For example, if you had a discount for not being involved in an accident for three years, you would lose that discount after getting into an accident. Similarly, if you move to a different state, your rate could go up based on the claims in your new ZIP code.

Finally, insurance companies may increase your rates if your credit score drops. This is because they have determined that people with low credit scores are more likely to get into accidents than people with high credit scores.

Your vehicle could be impounded

Driving without insurance is illegal in most states, and if you are caught, there are serious consequences. One of these consequences is vehicle impoundment. If you are driving without insurance and are pulled over, a police officer can impound your vehicle for lack of insurance. This can happen even if you are stopped for another reason, such as speeding or reckless driving. In some states, the police have access to license plate readers, which allows them to determine if a vehicle is insured before pulling it over.

If your car has been impounded due to a lack of insurance, you will need to take several steps to get it back. First, you will need to obtain insurance and provide proof of this to the impound lot. You will also need to pay all related fees, including towing and impound charges. In most cases, only the registered owner of the vehicle can retrieve it from the impound lot, and they must provide proof of insurance and ownership, as well as a valid driver's license.

It is important to act quickly if your car has been impounded due to a lack of insurance. Lot owners will typically only keep a vehicle for a set period, often around 30 days, before confiscating it or selling it to cover the fees. Additionally, in some states, there are laws that allow for a vehicle to be held for a longer period, such as 30 days, in certain situations.

It is worth noting that having your car impounded does not directly affect your insurance rates. However, if your car was impounded due to a lack of insurance, this could potentially lead to higher premiums as insurance companies consider driving without insurance to be a "risky behaviour".

Your license plates may need to be turned in

If your auto insurance has expired, you may need to turn in your license plates. This is because, in most states, license plates are linked to insurance coverage and vehicle registration. When a vehicle is uninsured, turning in the plates prevents it from being driven and helps to keep uninsured vehicles off the road.

The specific rules and procedures for surrendering license plates vary from state to state, so it is important to check with your local Department of Motor Vehicles (DMV) or its equivalent. In some states, you may need to surrender your plates at the same time you cancel your insurance, while others allow a short grace period. For example, in New York, vehicle owners must surrender their license plates before cancelling their insurance to avoid penalties such as registration suspension.

If you plan to sell or transfer ownership of your vehicle, relocate to another state, or store your vehicle for an extended period, you will likely need to turn in your license plates. Some states offer temporary surrender options if you expect a prolonged period of vehicle non-use.

When surrendering your license plates, you will typically need to bring them to your local DMV office or an authorized drop-off location. Many DMVs will issue a receipt or a letter of acknowledgment as proof that you are no longer responsible for the vehicle.

It is important to note that driving without valid insurance can lead to serious legal and financial consequences, including fines, license suspension, and even jail time. Therefore, it is crucial to maintain active insurance coverage and be aware of the requirements and procedures in your state regarding license plate surrender when cancelling or lapsing your auto insurance.

Frequently asked questions