Auto Insurance: Exclusion In Commonwealth States And Why?

In the United States, auto insurance is a major cost of car ownership, and it is considered so important that most states require coverage by law. However, not all states mandate it, and some offer alternatives to insurance company coverage. New Hampshire and Virginia are the only two states that don't require auto insurance. Driving without insurance in these states is completely legal, but there are some liability requirements that drivers must adhere to. Instead of auto insurance, drivers in these states must pay the Department of Motor Vehicles (DMV) an Uninsured Motor Vehicle Fee of $500.

Driving without insurance in Virginia and New Hampshire is legal

In New Hampshire, drivers are not mandated to carry auto insurance but must provide proof of financial responsibility. This means that drivers must demonstrate they can cover up to $100,000 for other parties' injuries and property damage in the event of an accident. Most residents cannot meet this requirement, which is why 94% of New Hampshire drivers have purchased car insurance. While insurance is not required for vehicle registration, it is recommended to carry proof of insurance when driving, especially in the event of an accident.

Although driving without insurance is legal in Virginia and New Hampshire, it is important to note that it comes with risks. If an uninsured driver is found at fault for a collision, they may be taken to court or have their driving privileges revoked and be responsible for covering all property damage and medical bills out of pocket.

There are liability requirements drivers must adhere to

In the majority of U.S. states, drivers are legally required to have auto insurance. However, in New Hampshire and Virginia, driving without insurance is legal. Nevertheless, there are still some liability requirements that drivers in these states must adhere to.

In New Hampshire, drivers must meet the Motor Vehicle Financial Responsibility Requirements, which total $100,000. This includes a $25,000 bodily injury liability limit for accidents involving one person, a $50,000 bodily injury liability limit for accidents involving two or more people, and $25,000 worth of property damage liability. Drivers can prove they have the required funds by depositing money or securities into a bank account and sending the receipt to the state treasurer.

In Virginia, drivers must pay the Department of Motor Vehicles (DMV) a $500 Uninsured Motor Vehicle Fee. Drivers with SR22s or FR44s must also buy auto insurance. An SR22 is required if the driver has an unsatisfied judgment against them, an uninsured motor vehicle suspension, or they have been convicted of failure to provide proof of insurance associated with insurance monitoring, falsifying an insurance certification, or driving for rent or hire without a license. An FR44, which requires double the minimum coverage, is required if the driver has been convicted of maiming while under the influence, driving under the influence of intoxicants and/or drugs, driving with a forfeited license, or violating federal law, the law of any other state, or any valid local ordinance similar to the above.

If a driver in Virginia chooses to buy auto insurance, the minimum coverage is bodily injury liability of at least $30,000 per person and $60,000 per accident, or property damage liability of at least $20,000.

Drivers can pay the Department of Motor Vehicles a $500 Uninsured Motor Vehicle Fee instead of insurance

In the United States, nearly every state (48 out of 50) requires drivers to have some level of auto insurance. However, in the Commonwealth states of New Hampshire and Virginia, driving without insurance is legal. This means that drivers in these states have the option to forgo insurance altogether. Instead, they can pay the Department of Motor Vehicles (DMV) a $500 Uninsured Motor Vehicle Fee. This fee is an alternative to purchasing auto insurance and is a legal way for drivers in these states to hit the roads without insurance.

It is important to note that this option is not without its requirements and restrictions. Firstly, drivers who choose to pay the Uninsured Motor Vehicle Fee are still subject to certain liability requirements. In New Hampshire, drivers must meet the state's Motor Vehicle Financial Responsibility Requirements, which total $100,000. This includes specific liability limits for bodily injury and property damage. On the other hand, Virginia has its own set of liability requirements that drivers must adhere to.

Additionally, the Uninsured Motor Vehicle Fee option is not available to all drivers. In both New Hampshire and Virginia, certain drivers are mandated to purchase auto insurance. For example, in Virginia, drivers with SR22s or FR44s, which indicate certain convictions or violations, are required to obtain auto insurance. These drivers must meet the minimum coverage requirements set by the state.

While forgoing insurance and paying the fee may be tempting for some drivers, it is crucial to understand the potential risks and consequences. Opting out of insurance means that drivers are solely responsible for any property damage or bodily injuries resulting from an accident. This can lead to significant financial burden and legal issues if the driver is unable to cover the costs.

As of 2024, changes are being made to the laws surrounding auto insurance in Virginia. Effective July 1, 2024, a new law will require Virginians to carry automobile insurance. This law, known as SB 951, repeals the option for motorists to register their vehicles without insurance and pay the $500 fee. With this change, Virginia is joining the majority of states that mandate auto insurance for all drivers.

Drivers with SR22s or FR44s must buy auto insurance

In the US, nearly every state requires drivers to have some level of auto insurance. However, in New Hampshire and Virginia, auto insurance is not mandatory, and driving without it is perfectly legal. Nevertheless, drivers in these states must adhere to certain liability requirements. Instead of auto insurance, drivers in Virginia and New Hampshire must pay a $500 Uninsured Motor Vehicle Fee to the Department of Motor Vehicles (DMV).

There are, however, certain circumstances in which drivers in these states are required to purchase auto insurance. Drivers with SR22s or FR44s fall into this category. An SR22 is a certificate of financial responsibility that serves as proof of minimum auto insurance coverage and is mandated for drivers with a range of convictions, including driving without insurance, DUI, or multiple traffic violations. Drivers who have had their licenses suspended due to certain offences, such as manslaughter or felony under motor vehicle law, are also required to obtain an SR22.

An FR44 is similar to an SR22 but is required for more serious offences, such as DUI with higher blood alcohol levels or repeat offences. The key difference is that FR44s mandate double the minimum liability coverage amounts required by SR22s.

In Virginia, drivers with SR22s must have bodily injury liability coverage of at least $30,000 per person and $60,000 per accident, or property damage liability coverage of at least $20,000. In New Hampshire, the requirements for drivers with SR22s are bodily injury coverage of $25,000 per person and $50,000 per accident, property damage coverage of $25,000, medical payments coverage of $1,000, and uninsured motorist coverage of a minimum of $100,000.

Not having insurance can result in fines, penalties, and license suspensions

Driving without insurance is illegal in almost every state in the US, with only New Hampshire and Virginia exempt. The penalties for driving without insurance vary from state to state, but they can be severe and include fines, penalties, and license suspensions.

Fines

Fines for driving without insurance can be costly, ranging from $175 to $350 for a first offense in Texas, and $350 to $1,000 for a second offense. In other states, like California, fines for a first offense can be as low as $100 to $200, but repeat offenses can result in fines of up to $500. In some states, like Alaska, fines for driving without insurance can be as high as $5,000 for a second or subsequent offense.

Penalties

In addition to fines, drivers who are caught without insurance may face penalties such as having their vehicle impounded and their driving privileges suspended. In Texas, for example, a driver may have their vehicle impounded for up to 180 days and their driving privileges suspended for up to two years. These penalties can be costly, as the driver may have to pay daily storage fees for their impounded vehicle, and there may be additional fees to reinstate their driving privileges.

License Suspensions

Driving without insurance can also result in the suspension of a driver's license. The length of the suspension varies by state, with some states imposing suspensions of up to one year for a first offense, and longer suspensions for repeat offenses. In some cases, drivers may be required to file an SR-22 form and demonstrate financial responsibility before their license can be reinstated.

Overall, the consequences of driving without insurance can be significant, and it is important for drivers to ensure they have the required insurance coverage to avoid these fines, penalties, and license suspensions.

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