Auto Insurance Requirements – Are You in Compliance?

Many people think that driving a car is a “right”, but the reality is that it’s a privilege that comes with many responsibilities. And if those responsibilities are not met, the privilege can (and will) be taken away. For example, most people are aware that it’s a driver’s responsibility not to operate a motor vehicle while under the influence of alcohol and laws have been enacted to enforce this responsibility to meet the auto insurance requirements of their state.

In most states, proof of insurance is a requirement in order to register a vehicle. But all too often, it seems that after the vehicle has been registered, the policyholder may feel the insurance premiums are putting the squeeze on their monthly budget and they then soon decide to drop their insurance coverage. Sometimes the policyholder may very well intend to only permit their coverage to lapse temporarily while they focus on paying off other more pressing debts This is a very dangerous road to travel down, however. Let’s take a look at just a few of the possible ramifications in the event you let your insurance coverage lapse.

First, in the event of a major accident, not having insurance can result in your financial ruin. You may be liable for not only your own medical bills, but also those of anyone you injure as well, plus as any property damage you cause. Needless to say, these losses alone can easily add up into the hundreds of thousands of dollars or more.

Secondly, if the law discovers (through either an accident or traffic stop) that you are driving without the required coverage, it can result in the loss of your driving privileges. And this then has the domino effect of affecting your ability to earn a living if you must drive to your place of employment.

Sure, you may luck out and never get in more than a minor fender bender where the police are not required and therefore the long arm of the law doesn’t discover you are driving without insurance. But is it really worth the risk? We think not.

Don’t gamble by not maintaining your auto insurance coverage. And if you do have coverage, ensure you are not underinsured. Indeed, you should be absolutely certain that not only do you meet the minimum requirements for your state, but that you also exceed them significantly. This is because the minimums stipulated by each state are never enough to fully cover the losses resulting from a serious accident.