Massachusetts requires a registered automobile to carry a minimal amount of bodily-injury-to-others and property-damage insurance. Do all states (or Canadian provinces) require this?
Now I know that Judge Judy participants do not represent a cross-section of America, but I can’t believe how many uninsured motorists go on that show. They come up with any-excuse-in-the-book not to pay for any damage that they cause. I, myself, was hit by an uninsured motorist. The damage was $400 (less than my deductible) and I knew that even if I did get a judgement, I probably would never collect. The question here is: What percentage of drivers are driving without insurance because it was cancelled for non-payment (or any other reason)?
New Hampshire is among a small handful of states that has no mandatory car insurance laws.
State law, however, does require you to pay for costs of bodily injury or property damage resulting from a car accident you caused. The best way to meet this requirement is by purchasing New Hampshire car insurance.
Texas has a mandatory financial responsibility law, but purchasing insurance is just one way to go about this. If you want, you can deposit $55,000 in escrow with your local county judge or the state comptroller, and then they’ll give you a certificate which takes the place of a proof of insurance. You can also file a surety bond backed by unencumbered real property in the state with a bunch of caveats.
Most people just opt for the insurance. I’ve never heard of anyone going for the bond or the security deposit, but it’s in the law and I guess some people must do it.
Wisconsin only got that in the last few years (5? 10?) so it wouldn’t surprise me if other states didn’t have it.
Also, as far as “I’d never collect”, I always say, go for it anyways. I sued someone for about $600, collected the money the next day but didn’t file the paperwork saying I collected it (I didn’t know I had to). He contacted me about 10 years later asking me to file it since he couldn’t get a home loan with that unsatisfied $600 judgement hanging over his head. So, yeah, you might not collect, but it might come back to haunt him some day and then you’ll collect.
Someone who has that kind of cash to drop to avoid paying for automobile insurance is probably in a better position to pay a judgment than someone squeaking by with the minimum required liability insurance ($30K per person, $60K per accident). You can end up with a multi-million dollar judgment against you either way, and if it happens you’re boned. The plaintiff is equally boned, since if you can’t pay the judgement they’ll never see it anyway.
When I lived in Tennessee 10 years ago, they had a financial liability law. You are required to EITHER have $10,000 worth of liability insurance OR have the ability to pay damages out of your own pocket up to $10,000. If you have an accident with no insurance and you can’t pay the damages, they suspend your driver’s license until you either get insurance or post a $10,000 bond.
The most recent and reliable source of Uninsured Motorist information is a 2011 study conducted by the Insurance Resource Council (IRC). Accordign to the IRC report, the 10 states with the highest percentage of drivers without insurance are as follows-
2011 IRC (Insurance Research Council) Uninsured Motorists by State
It’s scary, but based on their findings, only three out of every four drivers were insured in the five worst states! Many of the drivers who are insured only have the “state minimum” liability limits which is ridiculously low in most states. For example, here in Georgia, the law requires 25/50/25 limits. That means $25k per person up to $50k per incident Bodily Injury liability and $25k Property Damage liability. It is VERY easy to exceed $25k in Property Damage (most new cars cost more than $25k) and minor/moderate injuries can easily exceed those amounts as well.
Unfortunately, the only way for responsible drivers to protect themselves, their families and their assets is to purchase MORE insurance! Uninsured (UI) and Underinsured (UIM) Motorist Coverage (both Bodily Injury and Property Damage) are well worth the cost for the peace of mind they afford.
UI and UIM are consolidated as a single coverage in Georgia and I pay $41 per year for my 2012 Mazda CX-9 and $48 per year for my 2015 Volvo S60 for this coverage. For that extra $89 per year, I’m covered for $500k in Bodily Injury and $50k in Property Damage regardless of whether the at-fault driver has any or insufficient coverage to pay my damages.
Unfortunately, the only way for responsible drivers to protect themselves is to purchase MORE insurance! Many of the drivers who are insured only have the “state minimum” liability limits which is ridiculously low in most states.
I think NH is the only state left that does not require insurance.
In MA driving an uninsured vehicle is illegal. The owner is subject to fines and the car can be impounded. Having NH plates is not an exception to this rule, so if you live in NH and want to be able to drive in MA you must carry insurance.
Uninsured drivers cause all types of problems everywhere. The usual reason is non-payment. If they can’t afford their insurance, chances are they can’t afford to pay for any damage they cause, leaving the injured party to have to front the cost of all associate bills with the hope that someday the uninsured party will be able to make good on the debt.
Getting into a serious accident without insurance or sufficient insurance pretty much assures you’ll never be able to get out of the debt it causes.
You owe the money for the multi million dollar claim until it is paid.
The courts will take everything they can from you. States have laws preventing debts from forcing you into abject poverty. They can pretty quickly having you living at the poverty line, garnishing any wages beyond that to pay the debt.
Wow, I had no idea there was anywhere in the US that didn’t mandate insurance.
I do know that here in Michigan, compliance is extremely low and some carriers sell insurance by the week - just enough to get registration and plate tabs for the year. It’s openly advertised. No cite, but last year my insurance guy told me that in some Michigan markets - Flint, Muskegon, Detroit - the insurance compliance rate was only about 20 percent.
A few years ago, when Wisconsin first started requiring insurance on cars, my agent mentioned to me that one of their polices required payment in cash or credit cards (no checks) and it had to be up front (as opposed to getting billed later) since they were having such a hard time with bounced checks. I think it was for the absolute bare minimum the state required and it was something like a month long policy*. It was essentially, just to get your car out of the impound lot.
*Actually, now that I think about it, I’m sure it was a year policy but they were probably making people put the first X months down in cash or credit card since they knew they just wanted the proof of insurance paperwork and had no intention of actually paying the bill when it showed up.
Same thing that happens if you have only $55K in liability insurance coverage. You’re personally responsible for the difference.
There are a lot of states where the fine for a first offense of driving without insurance is lower than the premium for the state mandatory minimum insurance, so every year that you can get away with it, you keep putting your savings in the bank.
Many moons ago Ontario had an option for any driver in the province who could not afford insurance. You paid into the “uninsured vehicle fund” ($65/yr in the early 1970’s, IIRC). If you had an accident, the fund paid the damages, and then your license was suspended until you reimbursed the fund the full costs - essentially a gamble. But, with plastic bumpers and other advances that made simple crashes horrendously expensive, that disappeared eventually.
I knew a fellow who left to work in another province; but he’d had a accident while “insured” by the fund and was suspended in Ontario. I heard that on the way home for Christmas, with a car and license from a different province, he was pulled over by the police. The cop was a nice guy, he was given the option to park his car and catch the Greyhound. Even with a different province license, he was still forbidden from driving in Ontario. Of course, driving while suspended is probably the next most common offense after uninsured.
As I understand it, a good policy should cover you. If you have an accident, your policy pays for your damages - then your insurance company will go after the other driver and his insurance. Theoretically, you will only be out the deductible. “Uninsured driver” may be an option on your insurance policy, or it may be part of the default coverage. YMMV.
But yes, if the damage exceeds what you get from your own insurance, and the other guy’s insurance, then you are what is known as SOL.
I also recall there is some interstate or North American agreement about allowing / recognizing licensing in each jurisdiction, and I thought I read somewhere it included minimal insurance requirements. (possibly, laughably minimal.)
All very different here in the UK. Car insurance is mandatory and if they get caught, people do get pulled out of their cars and left to find their own way, as well as a fine, points on their licence and towing and storage costs. All car insurance is on a central database and the cops can get instant feedback with ANPR cameras on their cars and at the roadside.
Despite this, it is estimated that up to 20% of all cars are not insured - this is simply because of the high cost of premiums, especially for young drivers. When I paid for my daughter’s first premium as a 19yo it was around £2000 - it would be considerably more now, and that was for a cheap, small low powered car. As a 26yo, in a more powerful car and with a clean history, she now pays around £250.
Quebec has provincial insurance (paid with the registration fee and there is also a premium added to the license fee) for personal injury. If you are injured you pay what the insurance board mandates and not a penny more. Insurance for property damage is the driver’s responsibility and is compulsory. I wonder whether this means it is illegal for me to drive in Mass.
Responsible drivers could push their elected representatives to support “pay at the pump” liability insurance, so that every gas-fueled vehicle has basic liability coverage.
The way this works is that the state collects xx¢ per gallon on each gasoline/diesel pump, and uses that money to set up a state fund that covers basic liability insurance for every vehicle registered in the state. So in an accident, at least a minimum level of liability is covered from this fund. Presumably responsible drivers, with some assets to protect from lawsuits, would buy supplemental coverage above that basic limit.
It seems to me to be an improvement over the current state, where about 1/6th to 1/3rd of the drivers on the road have no insurance at all. (And they tend to be the worst drivers, too.)