Do I need insurance to drive a car?

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Here's what you need to know...
  • If you own a vehicle that’s registered to be driven on public roads, you’re required to comply with state financial responsibility laws
  • Most states require all owners to have a minimum amount of liability insurance to pay for damages that they cause while operating a motor vehicle
  • Failure to comply with state law could result in major fines and other civil and criminal penalties


In the United States, approximately 12.6 percent of drivers don’t have liability insurance. While this percentage is down from a decade ago, when doing the numbers you’ll discover that there’s more than 1 million licensed citizens that are choosing to drive without any type of insurance protection.

With so many uninsured drivers on the road, it might appear as if it’s an option. In actuality, insurance is required in most states other than New Hampshire, where liability insurance is completely optional.

While it’s a legal requirement to buy insurance to own a car, it’s not always required by law to drive one.

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Who is required by law to purchase auto insurance?

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You’ll need to refer to the auto insurance laws in your state to learn who is required to carry coverage. In most instances, the state officials place the burden of carrying insurance on a car on the shoulders of the vehicle owner.

The owner is the individual who holds the title or who is named on the registration.

If the owner is married, the spouse may also be on the hook for proving they are insured when driving the vehicle in question.

For drivers who don’t have an insurable interest in the car but do live in the household, there’s no obligation to buy a policy.

There are, however, rules stating that all household members should be listed as covered drivers on policies to prevent problems when filing a claim.

What is the difference between compulsory insurance and financial responsibility laws?

All states except for New Hampshire have either an explicit car insurance law or one where buying car insurance is one way to comply with the law.

It’s important that you can distinguish between a state with compulsory insurance laws and one with financial responsibility laws.

Here’s a breakdown of how each type of law works so that you know how you can comply when you purchase a vehicle:

  • Compulsory Auto Insurance Laws –When a state mandates a compulsory insurance law, auto insurance is mandatory and all residents who own a car must comply. It’s most common for states to require drivers owners to carry a minimum amount of Bodily Injury Liability and Property Damage Liability
  • Financial Responsibility Laws –Financial responsibility laws are in place to require vehicle owners to demonstrate that they are able to pay for the damages they can cause in a vehicle accident. Instead of making auto insurance mandatory, the law gives owners options to comply with the law

Why Vehicle Owners Should Have Car Insurance

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It’s tempting to self-insure if you’re given the option, but it’s important that you think about the consequences before you make this decision.

When you’re posting a cash deposit or a bond, you’re putting all of your assets and your savings at risk.

Just one single catastrophic accident can lead to hundreds of thousands of dollars in damage that you’re responsible for paying.

Instead of ending up in court where you’ll have to pay your own attorney fees and judgments it’s smart to pass the burden on to the insurer who covers court costs and provides liability protection.

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Does insurance follow the car or the driver?

If you’re driving your own vehicle, you most definitely need insurance to protect your assets and wages, but the answer isn’t so simple when you’re borrowing a car.

There’s a widespread debate concerning whether car insurance follows the car or the driver, and this is relevant to the topic in more ways than one.

If you’re borrowing a car, it’s important that you know that the owner’s insurance will cover you before making assumptions.

If you’re given permission to drive and you don’t live in the household where the car is parked, you’ll probably qualify as a permissive user.

In this case, the owner’s liability coverage and physical damage will payout while you’re driving.

Can you get coverage if you don’t own a car but you drive?

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You can’t always rely on your friend’s or relative’s insurance to cover you if you’re borrowing a car. If you don’t own a car, it’s still wise to get insurance.

This is why some carriers will offer specialty coverage for licensed drivers who drive from time to time but who don’t plan on owning a car in the near future.

These specialty policies are called non-owners insurance policies and they aren’t offered by all carriers.

Here’s a list of the types of coverage a non-owners policy will provide:

  • Bodily Injury Liability (BI) –up to per person and per accident limits
  • Property Damage Liability (PD) –up to per occurrence limit
  • Medical Payments –offered by some carriers
  • Uninsured Motorist – up to BI limit offered by some carriers

When Not to Buy Non-owner’s Coverage

If you live in a household with access to the car you’re borrowing, don’t buy non-owners insurance. You should only buy when you’re driving cars you don’t have regular access to.

Here are some scenarios where it’s appropriate:

  • You frequently rent cars
  • You borrow out-of-state relatives cars
  • You are required to buy liability insurance to post an SR-22
  • You want to keep a prior insurance discount for when you own a car

As you can see, you typically need insurance when you drive a car. There’s a possibility that the insurance that’s following the car might protect you, but this isn’t guaranteed.

If you’re interested in pricing shopping for protection, now’s the time to start. Use an online comparison shopping tool to see how much you’ll pay for coverage based on your current situation.

Once you’ve price shopped, select a reputable company and invest in both a peace of mind and protection.

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