The Price of Getting Caught Driving With No Car Insurance

Even though laws vary from state to state, all drivers must carry at least some type of car insurance. While many people are trying to cut costs because of financial hardships, going without car insurance in hopes that you won’t be caught can be a very costly mistake. Even an accidental lapse in insurance because you forgot or couldn’t afford to pay the bill can cost much more in the forms of fines and penalties for a lapse in coverage, and may raise future insurance rates.

Minimum Standards

Most states require at least a minimum amount of liability coverage to pay for vehicle damages and injuries to the other party if a driver causes a wreck. This liability insurance covers the cost of medical expenses and property damage to other persons in case of a vehicle accident, but it usually does not cover the driver’s own losses. In case of even a minor accident, the police will check to see that all drivers involved are covered by insurance (or, in a very few states, a surety bond or self-insurance policy as a substitute). Police can also request proof of car insurance at vehicle checkpoints.

Proof of Insurance Requirements

Lenders require proof of insurance on financed cars. Often, lender requirements are higher than the states’ minimum liability coverage requirements. The lender will likely require comprehensive and collision coverage to protect the value of their investment in the vehicle in case it goes into repossession.

If the insurance policy lapses for any reason, the lender can force coverage by obtaining a policy on their own and charging the borrower for the cost. These policies are typically much more expensive than a regular insurance policy and they protect only the bank’s interest, not the interests of the driver. Forced coverage does not provide any liability insurance. If the lender forces coverage on your vehicle, the best thing to do is purchase a standard insurance policy as soon as possible and show the lender proof of coverage.

What if an Accident Happens?

If you are in an accident while driving without insurance, you can be liable for all the other party’s medical expenses. You will also be responsible for paying the costs to repair or replace the damaged vehicle. In addition, you may be charged with violating state motor vehicle laws, resulting in fines, court-ordered community service, or suspension of driving privileges.

Fines for driving without insurance can range from $500 to upwards of $5,000 depending on the state. In states with a punitive point system, 3 points or more may be added to a driver’s record for failing to have insurance. Some states even impose jail time of up to a year for driving with no insurance coverage.

Because car insurance companies run background and driving record checks on applicants, and since driving without a license is a violation of motor vehicle laws, which can add “points” to a driver’s record, being found guilty of driving without insurance can make it harder to obtain affordable car insurance in the future. Lapses in coverage may raise motor vehicle insurance premiums considerably or even disqualify a driver from obtaining a policy.

Four Reasons Your Zip Code Affects Car Insurance Rates

Your car insurance isn’t solely determined by your age, driving record and the type of vehicle you own. Where you live also plays a huge role in how much you’re going to end up paying. The premiums your insurance company calculates come from many risk factors, but none is as easy to understand as your zip code.


Zip codes correspond closely to the geographic regions of the United States, mirroring and including the cities and towns that dot the country. As a result, each zip code provides your insurer with a good indicator of the local level of urbanization. Drivers who live in zip codes associated with major cities and large population centers are at high risk for accidents.


Increased traffic levels raise the likelihood of collisions, as do the number of traffic signals and pedestrians. Driving in cities can be insanely hazardous, and insurance companies routinely rely on assessments based on zip codes to determine the threat to their clients and their vehicles. In some cities, the state of road repair can adversely affect insurance rates.


Crime also plays a part. Car thefts are more common in high population areas. A thief may just be emboldened by the wider spread to choose from, or they might find the ease of stealing a car without being detected irresistibly inviting. Regardless what the actual motivating reason for a particular instance of theft is, more cars are stolen or broken into in cities and insurers know it.

Vandalism is also prevalent in certain zip code areas. Like the car thieves, vandals strike for varying reasons, but the fact of the matter is that some places, such as urban areas and certain low-income rural zones, are more crime-prone. Insurers look closely at these factors when they calculate the risk of working with you, also considering the likely repair costs incurred should something untoward actually occur.

Weather Patterns

People aren’t always the determining factor that makes insurance policies more expensive in certain zip codes. Some places are at high risk for natural disasters. Drivers who live in central and coastal areas that experience regular tornado or hurricane-level storms, for instance, are going to pay more money for their car insurance. Earthquake zones and fault areas are also higher-risk for insurers.

While floods and natural disasters are beyond our control, some counties and zip codes are worse off for their lack of adequate mitigation or recovery standards. Zip codes where government development and investments have created functioning levees, escape routes or early warning systems may still experience higher rates due to disaster regularity, but their insurance rates won’t be as high as those in underdeveloped areas.

Your zip code makes a big difference in how much your car insurance bills will be, whether because of disaster proclivity, population density or crime. Other zip code related factors, like local litigation regulations, also help insurers determine the costs they’ll incur when helping you out of a jam, affecting your rates.

Five Best Cars for Fuel Economy

The U.S. Department of Energy makes it easy for consumers to find out which cars are most fuel-efficient. For 2011, the agency has offered a list of the most fuel-efficient cars in America at “’s Top Ten EPA-Rated Fuel Sippers.” Not surprisingly, only hybrids and electric vehicles made the list. We’ve taken it a step further and offered a few more details, including pricing, on the top five.

5. 2011 Lexus CT 200h

It might surprise you to see a luxury car in with the Fuel Sippers, but there it is. The 4-cylinder hatchback defies your preconceived ideas about hatchbacks, offering the luxury Lexus drivers expect. This sporty little number gets 43 mpg in the city and 40 on the highway. Getting better city mileage than highway is a quirk of many hybrids. The CT shares the Prius platform, inherited from its parent company, Toyota, but with a lot more style and oomph. You can pick one up starting around $30,000.

4. 2011 Toyota Prius

The Prius is the car that proved hybrids were an option for average Americans. Priced between $25,000 and $30,000, it’s not cheap, but it is the most affordable car in its class. Small but roomy, the Prius is an excellent choice for most commuters. If you want something sportier, you might prefer the Lexus CT 200h.

3. 2011 Chevrolet Volt

At a pricey $40,000, the Volt offers an amazing 95 equivalent mph city and 90 highway when running on its electric charge. When running on gasoline, which must be premium grade, it gets 35 mpg city and 40 mpg city. The Volt offers a balance of utility and convenience, allowing most drivers to use the electric only power except for the occasional long road trip.

2. 2011 Smart ForTwo Coupe or Cabriolet Electric Drive

Smart cars are often confused with hybrids or electric vehicles in general, but they really fall under the unique, two-seat Mercedes Benz offspring. The Smart car’s origins allowed it to enter the market with an instant reputation for quality and craftsmanship. Looking a little like a miniature spaceship, Smart ForTwo boasts 94 mpg equivalent in the city and 79 on the highway for both the Coupe and Cabriolet models. Only available for lease in limited numbers at this time, you’ll be lucky to even see one, much less get your hands on the wheel. The cost of a lease works out to about $28,000.

1. 2011 Nissan Leaf

The 2001 Leaf beats all others for fuel economy with its all-electric motor. Priced at around $33,000, the Leaf offers the equivalent of 106 mpg in the city and 92 on the highway. The four-door hatchback makes it an excellent choice for environmentally conscious families.

These fuel-efficient wonders can save you a lot of money on gasoline. Unfortunately, until there is more of a history for insurance companies to look at, you won’t save a lot on insurance premiums. In the coming years however, these cars, often driven by responsible and eco-conscious individuals, should prove to cost less to insure once they prove themselves.

Acquiring Insurance for Domestic Partners

Domestic partners are beginning to have the opportunity to take advantage of some of the privileges that had previously only been available to legally married individuals. With new domestic partner legislation being passed in states across the nation, more people can legally combine their finances into regular households.

More Availability with Legalized Partnerships in Some States

Prior to the legalization of domestic partnerships, two grown adults living in the same home could not be included on the same insurance policy. In areas where partnerships are legal now, most car insurance companies stipulate that everyone on the same car insurance policy must be related by blood or by marriage.

In these states, car insurance companies are not required to consider domestic partners as members of the same family. Partners living in these states will have a more difficult time tracking down car insurance that will allow them to be included on the same policy. Still, some car insurance companies include domestic partnerships as part of their regular business practices no matter what state they are located in.

Even though domestic partnerships are not recognized as traditional marriages in every state, they are legally binding relationships entitled to the financial benefits that married couples enjoy. Each state that has passed domestic partnership laws carries different regulations regarding the partnerships, though, so you might need to check into the details for your state before you begin trying to purchase a joint car insurance policy.

Partners Must Share Home Address

Even in states where domestic partnerships are allowed, the partners must reside in the same home location in order to qualify for a joint car insurance policy. Just like the recognized family members that are included in traditional joint accounts, sharing a residence is required by almost every car insurance company that offers special discounts for multiple policies or multiple cars on the same policy. The insurance company sees domestic partners as family members, the same way a spouse or child is a family member.

Insurance Companies Not Required to Provide Partnership Policies

Depending on the specific details of the domestic partnership laws in your state, car insurance companies might not be required to recognize domestic partnerships. The fact is that car insurance companies are not required to recognize any relationships for special discounts. Married individuals and other traditional family relations do not automatically have the right to share a car insurance policy. It is strictly up to the insurance company whether or not they allow joint policies. In states with domestic partnership laws on the books, though, an insurance company that offers joint policies to married couples would be required to offer the same benefits to domestic partners.

Discounts Available for Domestic Partners

The car insurance discounts that domestic partners can enjoy are the same discounts that married couples can take advantage of. These discounts usually include a special rate for including more than one car on the same policy. You may also qualify for a special discount on your car insurance if you choose to purchase home or life insurance through the same insurance company. Discounts and special insurance packages will vary depending on which insurance company sells you the insurance.

A Traffic Ticket Doesn’t Have to Cost You More for Car Insurance

It is common knowledge that receiving a traffic ticket will cause your insurance rates to go up immediately. The truth is that premium increases don’t always follow traffic tickets in every case. The severity of the ticket and the means used by the courts and your insurance company will make a big difference in your ultimate consequences. Your previous driving record will also play a part in whether or not your insurance rates rise after your traffic ticket.

How Severe Is the Ticket?

Insurance companies do not treat all traffic tickets the same way. The less serious your ticket is, the better your chances will be of escaping without too much damage to your insurance premiums. Speeding tickets within a certain range are generally not even reported to insurance companies. If you are caught driving recklessly, however, the ticket will be reported and could cause your rates to increase. Speeding more than 15 mph over the limit, following too closely, or failing to yield for an emergency vehicle are examples of tickets that might be cause for concern.

Alternatives to Wipe the Ticket from Your Record

Most states offer ways that you can have the ticket removed from your record, especially if it is your first offense. In larger states like California, the option to go to traffic school rather than accept the ticket is available. You must sign the ticket at the time the officer issues it. Other states might require you to visit the courthouse to negotiate a way to keep the ticket from being included in your driving record. You might be able to pay a smaller fine and perform community service or go to a specific traffic school instead of having the ticket charged to your record.

Consequences of Accepting the Ticket

It may seem easier just to accept the ticket, pay the fine, and be done with it. If you don’t actively seek alternatives to accepting the ticket, your insurance rates are far more likely to increase. Traffic tickets can add points to your driving record, which increase your risk level in the eyes of the insurance company. Anything you can do to remove the ticket from your record will save you money in the end, especially if you have had tickets or accidents on your record previously.

State Laws Vary

Each state has different requirements for reporting tickets to insurance companies. You might have to pay additional fees in order to take traffic school and remove the ticket from your record. Many states place a restriction on how many times you can attend traffic school to protect your driving record. Some states will only allow you to use driving school as an alternative if you were caught speeding within 25 mph of the speed limit. To learn about the options available in your specific area, contact the courthouse that issued the traffic ticket. The clerk will give you more information about specific traffic ticket alternatives.

What to Expect for your Insurance Rate after a Car Accident

If you are involved in a car accident, several factors could determine what happens to your car insurance rate. Your rate might go up if the police determine that the accident was the result of reckless driving on your part. You might not see a difference in your rates if the accident was the other driver’s fault. The severity of the accident and the overall cost of the claim you file can also play a part in your subsequent insurance rates.

Police Decide Which Driver is at Fault

The fault of any accident is partially determined by the authorities on the scene. The police will usually issue a traffic ticket to the driver who is at fault based on the traffic law that was broken. In complicated cases, the police may not determine fault until they can investigate further. Your insurance company and the other driver’s insurance company can agree on who is at fault, or battle out the question through arbitration or a lawsuit. Although the police do not decide which driver was at fault for an accident, a traffic ticket weighs heavily against you. The adjuster will look at all aspects of the case and apply any mitigating factors. However, not every accident is the fault of one driver or the other. Sometimes drivers share fault.

What Happens When you are Found at Fault

If you are at fault, your insurance rates will probably increase as soon as the insurance companies reach a settlement, depending on your state’s laws. Causing an accident will put you in a higher risk category with the insurance company, so your rates will increase based on your new standing. The only time your rates would not increase after an accident that is your fault would be if you qualify for a special accident forgiveness discount through your insurance company. Otherwise, you should expect to pay more for your coverage in the near future.

What Happens When the Accident is not Your Fault

If the accident is completely the other driver’s fault, you will probably not notice any changes to your insurance rates. Since the other driver is responsible for the accident, any claims resulting from the collision are paid by the other driver’s insurance rather than yours. This is only true if the other driver is 100% responsible for the accident. If fault is shared among the drivers, your rates will probably increase if you were 50% or more at fault. This depends on your state’s particular laws.

Consequences Depend on Previous Driving Record

Sometimes your insurance rates will increase even if you were not at fault for the accident. If you have a spotty driving record, being involved in an accident of any kind can put you in a higher risk category. The time frame is different from company to company, but most insurance companies will raise your rates if you have had an accident or a traffic ticket within three years of your latest accident. They consider the new accident part of a pattern that reflects your driving behavior as risky, so they increase your rates because there is a higher chance that you will need to file a claim.

Girl vs. Boy Teen Driver Insurance Costs

When it comes time to add a teenage son or daughter to a parent’s insurance policy, the rates often rise. It’s expected, because people are aware that teenagers, statistically, have some of the highest accident rates in the country. But the rates are not just raised; in many cases, they are doubled. Conscientious parents can take action to lower rates for their teenagers.

Insuring a girl can be a little less painful than insuring a boy. The statistics for girls are a bit better for boys, so insurance companies will quote lower rates for your daughter than your son. Because boys are involved in more car collisions than girls, receive more speeding tickets than their female counterparts, and engage in behaviors that are more dangerous while driving, insurance companies see boys as higher risks than girls. With a higher risk, come higher premiums.

Take Steps to Keep Rates from Rising

Even though it will cost less to add a girl to the insurance policy, this will not keep the premiums rising significantly; parents will still need to have another plan. Because both teenage boys as well as teenage girls are new drivers, they have the highest likelihood of needing to use auto insurance. For this reason, insurance companies charge the highest rates for the most inexperienced and newest drivers.

Driving Courses

Insurance companies are more willing to insure a teen driver that has completed s defensive driving courses. These courses are good for reducing a teenager’s rates by 10-15 percent, especially for a male. Every parent of a teenage boy is encouraged to have him attend a defensive driving course. It’s generally an easy course that takes only one day to complete. These courses are also reasonably priced.

Encourage Good Grades

Students’ report cards that show they have achieved a grade point average of 3.0 or higher will impress most insurance companies enough to lower their premiums by 10-20 percent. Good grades demonstrate to the insurance companies that a teenager is more responsible and mature than their peers, and that they would be less likely to engage in the dangerous, irresponsible behaviors of most teens.

Put Your Teen in a Safe Family Car

The best vehicle for a teenage driver is an older model. Older cars have cheaper parts and are less expensive to repair. This fact causes insurance companies to give lower rates for older cars to people no matter how old they are, but it is even more important for a teenage boy. A teenage boy in an expensive, sports car would cause insurance companies to charge astronomical rates.

As teen drivers, both boys and girls, acquire experience and maintain a good driving record, insurance companies will begin to lower their premiums. Two times in particularly, at the 21st and 25th birthdays, mark moments that the insurance companies see as important milestones. Once their teenagers continue do the right things on the roads, patient parents will see their rates go down.

Seven reasons not to let your car insurance policy lapse

Allowing your car insurance to lapse for even one day can be painfully expensive. Car insurance companies charge much higher rates for customers who have experienced any lapse in coverage, no matter how long the lapse was.

1. Rates Increase Dramatically

Statistics show that purchasing a new insurance policy after you have had a lapse in coverage can cost you almost 6% more in higher premiums.[1] Some insurance companies might raise your rates by as much as 8% on a single car if you have experienced any lapse in coverage over the previous year.

2. Driving Without Insurance is Illegal

In every state except New Hampshire, you are legally required to carry a minimum amount of liability and personal injury car insurance coverage before you can register your car or renew your tags. You could face hefty fines, you could lose your license for a time, or your car could be impounded because it is not insured.

3. Those with Lapsed Coverage More Likely to Have an Accident

Research shows that drivers who allow their insurance coverage to lapse are involved in more accidents than those who carry insurance continuously. The same financial trouble that causes someone to cancel his or her insurance policy could also cause someone drive poorly. The emotional strain of unpaid bills can also be distracting to drivers, making them less attentive to the roadway.

4. Insurers Legally Required to Cancel Coverage for Non-Payment

Most states have insurance regulations that require insurance companies to cancel a car insurance policy after a certain period if no payments are received. Your insurance could lapse if your payment is late by a single day in some cases. Usually there is a short window of time before the policy will be canceled, but the longest your payment can be delayed is 30 days in the most lenient situations. Once the policy lapses, you will have to deal with all of the financial and administrative trouble that comes with opening a new policy as someone who has a gap in their insurance coverage.

5. More Expensive to Insure Multiple Cars after a Lapse

The rates for insuring a single car after a lapse in coverage can increase quite a bit, but the rates for insuring multiple cars after a lapse increases even more. Drivers who insure more than one vehicle could pay as much as 12% more for their car insurance than they would pay without any breaks in coverage, even if the coverage lapse were relatively short.

6. Lapse Eventually Costs More than Ongoing Coverage

The recent economic downturn has caused many people to look for new ways to save money while they work to improve their financial outlook. Cutting out car insurance might save you money right away, but it will cost you more in the end. The increase in car insurance rates when you purchase a new policy will be more expensive than the amount of money that you saved on monthly premiums.

7. Paying for an Accident Out of Pocket

If you allow your car insurance to lapse for any reason, you are putting yourself at a high risk. The costs of repairing or replacing your car or another driver’s car can be exorbitant if you are paying out of pocket. You could face legal penalties for being in an accident without car insurance, and you could face a civil lawsuit that might cost you thousands of dollars in a settlement.


10 Ways You’re Wasting Money on Your Car

You can reduce car expenses by quite a lot when you know the cheaper alternatives to your current car expenses. Follow these tips to save hundreds, sometimes thousands on your car expenses.

1. Under-inflating tires – Under-inflated tires waste gas mileage because they don’t roll as efficiently. A tire will low pressure sags, putting more of the tire surface against the road, increasing friction and drag. Inflate them properly for the best gas mileage.

2. Buying Expensive Bulbs – Expensive headlight bulbs make very little difference to the amount of light your headlights emit, but they make a big dent in your wallet.  If your headlights seem dim, get new lens covers, or pick some up cheap at the junkyard.

3. Using Pricey Cleaners – You don’t need expensive cleaners for your car. Most of the time, soap and water work well enough. You can use something fancier, but you don’t need it.

4. Washing Your Car at Home – Car washes are an inexpensive way to clean your car. If you do it yourself, you use much more water, time and energy. Your time is valuable than the cost of a carwash. Just be sure to choose the cheapest wash and wax. The then you can do a better job and not take much longer to finish the job.

5. Buying High-Octane Gas – Premium gasoline is only helpful if you have an engine designed to run on it. If you put premium in an engine designed for the regular stuff, there is no benefit. You only need higher octane if your car manual calls for it or if you hear engine knocks. Use only the octane high enough to stop the knock. Then get your car checked to be sure something else isn’t causing the knock.

6. Using the Dealer for Service – Most independent shops will do the same job for less money and often in less time. Do your research beforehand, otherwise, you could find an unscrupulous shop that will take your money and run.

7. Waiting for a Breakdown – If you notice a shock absorber that’s causing uneven tire wear or a brake squeak, schedule the repair right away. Fixing things before they break is usually cheaper and a lot less time consuming than doing it after a roadside breakdown and tow to the garage.

8. Buying Extended Warranties – Buying an extended warrantee is usually money down the drain. Unless your car is particularly troublesome and you anticipate a lot of trips to the dealer, then save the money you’d spend on an extended warranty and use it for a repair if one ever comes up.

9. Paying Too Much for Insurance – Check the limits and shop around. If your car is only worth $1,500, then you may well be over paying. However, never skimp on liability coverage. Compared to the payout you get, it’s very cheap.

10. Speeding – Nothing will hurt more than a large speeding fine. Aside from the fine, you could also end up paying extra for insurance when your insurance company finds out. In addition, it can take years before your insurance rates will go back down.

Top Vehicles to Insure: Highest and Lowest Cost

Car insurance rates depend on several variables that can be different for every driver. In general, the safer your car is and the better your driving record is, the less you will pay for insurance. The kind of car you drive and where you drive it can also make a big difference on the way your car insurance company determines you risk factors.

Small, Fast Cars Most Expensive to Insure

Research shows that smaller cars tend to get into more frequent and more serious accidents than larger cars do. Smaller cars can be more difficult to see, so other drivers run into them more often. Their small size means that they can crumple more easily, especially if they are in a collision with a larger vehicle. Although sports cars are definitely more expensive to cover than most other cars, compact cars are also high on the expensive to insure list. The Scion tC and Honda Civic Si rank in the top ten most expensive list, alongside Mercedes and BMW high performance models.

Family Cars Top the Least Expensive Insurance List
Large SUVs and family sedans are some of the least expensive cars to insure because they tend to be equipped with some of the most comprehensive safety equipment on the market. The list of the least expensive cars to insure includes the Honda Odyssey, Subaru Outback 4WD, Chrysler Town and Country, and the Ford Five Hundred 4WD. These sturdy vehicles can escape from most collisions without sustaining serious damage, and they protect their passengers well from injury in almost every kind of accident. Insurance claims data shows that larger cars make lower insurance claims on average compared to smaller cars.

The State You Live in Could Be More Expensive for Car Insurance

When you look at your car insurance expenses, you have to consider where you live as well as what you drive. Each state has different minimum requirements for car insurance, and those minimums make a large difference in insurance costs. The most expensive states for car insurance include Michigan, Louisiana, Oklahoma, and Montana. In some of these states, the insurance coverage is higher because there are a larger proportion of drivers who are driving uninsured, which makes the insured drivers have to file claims against their own policies no matter which driver is at fault in an accident.

The Least Expensive States for Car Insurance

If you happen to live in a state that has an overall lower car insurance rate, you might be able to afford to drive a car that costs a little more to insure without sacrificing too much of your budget. The least expensive states for car insurance are Vermont, South Carolina, Maine, Wisconsin, and Tennessee. The same exact insurance policy in Vermont can cost as much as $1,500 less than it would cost in Michigan. It is no coincidence that the states with the lowest car insurance costs are also the states with the lowest instances of uninsured motorists on record.