The Cost of Driving Without Car Insurance

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 22, 2021

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Here's what you need to know...

  • Driving without insurance is a bad decision and can result in numerous consequences
  • Consider public transportation and walking to work if you don’t want to pay for auto insurance
  • There are ways to lower your car insurance premiums like reducing coverage or raising deductible

Have you ever considered driving without car insurance as a way to save some money? Many people have considered this, or worse, have done it.

With the current state of the economy and more and more people struggling financially, you, like many, may be looking for a way to cut costs.

Driving without car insurance is not the way to do so!

Driving without car insurance is not only risky; it is illegal in almost all 50 states.

Most states refer to laws governing the amount of car insurance you must have to operate a vehicle on the road as financial responsibility laws.

These laws impose strict penalties including hefty fines, suspension of a driver’s license, community service, and in some cases, even jail time, for failure to carry proper motor vehicle insurance.

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Lawsuit Implications

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Each year more than six million auto accidents occur across the United States, and people are injured or killed in at least half of these. What happens when you cause an auto accident resulting in injuries while driving without car insurance?

Most likely you will be sued for every penny you have to your name. If you are found negligent you may find yourself paying the injured party for the rest of your life. Add to this the expense of legal fees and time out of work and you can kiss retirement goodbye.

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Financing Implications

When you purchase a vehicle and finance through a lender, you are required to provide proof of insurance. This does not mean, however, that once your loan is secured, you can simply cancel the insurance.

In most cases, insurance companies are required to notify lenders when a customer has canceled their insurance.

Your lender may then place insurance of their choosing on the vehicle at your expense or may simply repossess the car because you failed to meet the requirements of the loan by driving without car insurance.

What can you do if you are struggling to pay for car insurance and have considered driving without insurance? First, consider other means of transportation:

  • Do you live in an urban area where public transportation is readily available?
  • Are your job and most of your errands close enough that you can walk, ride a bike, or take a taxi?

Finding alternate means of transportation can result in huge cost savings not to mention the benefit to the environment.

Perhaps you do live in an area where you have access to public transportation but are concerned about not having a vehicle for those occasional times when you need to travel a longer distance.

Consider short-term car rentals and pay as you go car insurance. You can reserve a car for use whenever you want with gas and auto insurance included simply through the click of a button on your computer.



Not everyone lives in an area where the use of public transportation is convenient or even available. Not owning a car may not be an option for you. If this is the case, there are ways to make car insurance affordable.

  • Carry only liability – In most states the minimum requirement for motor vehicle operators to carry is called liability insurance. With liability insurance, you are covered if you cause damage to someone else’s vehicle or injury to another person. Damages to your own vehicle are not covered, however.
  • Drop collision and comprehensive on older cars – Once you have paid off your car loan, and your vehicle decreases in value, these coverage options are less important.
  • Raise your deductible – While you still have to ensure you’ve got in-pocket money for this, a higher deductible will lower your monthly premium.

No matter what level of insurance you determine is best for you, there is always going to be some cost involved. Perhaps you are already struggling to pay bills or have recently been laid off from a job.

Budgeting for insurance costs may be challenging, but the cost is not even close to what you may pay if you drive without insurance.

Finally, you need to do your research! There are many affordable options when it comes to car insurance. Companies are becoming increasingly competitive in today’s economy to gain your business.

You need to do your homework and compare rates and packages to find the one best suited to your needs and financial situation. If you have considered driving without insurance, take a moment to consider the true cost if you are caught or in an accident.

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