Auto insurance is not just a necessity it is the law in most states. In fact, I don’t remember coming across any state law where auto insurance is not mandated.
The law is just one part; there are a number of other repercussions too. So just what are the possible outcomes of not having auto insurance?
The most obvious reason for having auto insurance is to be sure that you can be protected against the sudden expenditure that you might have to incur during an accident.
An accident is never planned. It can happen to you or me. We may or may not be at fault, but the damage is the same for both the parties involved in the accident. Firstly, there is property damage. The automobiles of both the parties will have sustained all sorts of damages based on the severity of the accident. Then there is damage to other public property and private property, like a light pole or a stationary wagon or even a shop. Then there is injury or loss of life. Medical expenditure will also be pretty hefty. All of this can be covered by auto insurance.
If you don’t have auto insurance, you might have to end up paying for all the damages through your own pocket. A car is a big investment. If you lost your car all of a sudden, it might throw you back a couple of years financially speaking. And a damaged car just can’t work as well as a good one. If its just cosmetic damages, that’s okay; but if you have sustained major engine or power train damage, you can lose a lot of money.
For example, I remember a friend of mine having to shift down from driving a sedan to a small car. And all he did was park his car in the basement on a rainy day. The water flooded the basement and the repair costs came up to almost three fourth the value of the entire car! He just ended up giving it away and bought a small car.
And if you are the type that like to feel the rush of being on the wrong side of the law, then there is a lot you need to know. The penalties for not driving with valid auto insurance are huge. You might have to pay as much as a few hundred dollars in fine, or have your license revoked. You might even have to serve a jail sentence if you have been involved in an accident without auto insurance protection.