High Risk Without Auto Insurance

By James Tam on August 19th, 2007

It is mandatory in most states of America for citizens to hold some kind of an insurance cover. While this is usually limited to liability insurance in most cases wherein your insurance company pays for the damages caused if the accident is your fault, there are still vast number of Americans who don’t have any sort of cover for their vehicles. Experts have always stressed about having an adequate cover, more than that required by most state laws (as these laws only pertain to third party liabilities, but not the damage caused to you, if the accident was someone else’s fault, or due to conditions out of human control), however, insurance continues to be, in the eyes of most Americans, money that is only wasted.

Statistics indicate that drivers between the ages of 20-24 cause 15.3% of all automobile accidents in the country. While at the same time, this is the age group that is most likely to avoid getting an automobile insurance for their cars. The reason? Fresh college graduates have lot of debt in the form of student loans. Apart from this, most also have huge debts from credit cards, which are made so easily available these days to college students, with credit card companies entering college premises to distribute these “free cards”.

Also coming fresh out of college may seem like liberation, but with this comes a whole lot of responsibilities, various bills, taxes, 401k deductions etc. that is simply too overwhelming for most students to manage. Car insurance is the obvious payment that can be avoided very easily. While managing so many things, skipping car insurance may seem like a good idea, what most of these young men and women don’t consider are the consequences that may arise due to such neglect.

While there are obvious penalties that are levied by different states if you do not have the minimum required insurance, costs of not having insurance can be much more than this. Massachusetts, for instance, charges fines between $500-$5000 in addition to a year in jail, while states like Florida, Louisiana, Connecticut and New Jersey impound vehicles that do not have the minimum cover according to the law.

Depending on how soon can you get back your car, this may cost thousands of dollars. However, these are just fines that will need to be paid if you are caught without any insurance. Now imagine being involved in an accident. There will not only be legal proceedings, but you might be also required to pay all the medical bills of the victims, which could run into hundreds or thousands of dollars.

Getting auto insurance doesn’t seem like such a bad idea now. The irony is that the fines to be paid for not having auto insurance can usually cover your car for 1-2 years. So if you consider in the long run, getting adequate cover is usually much cheaper, and saves you a lot of trouble.

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