The Risks of Driving without Auto Insurance

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The Risks of Driving without Auto Insurance

Car insurance is mandatory in most of the states. Moreover, the states that do not require you to have car insurance on a mandatory basis, requires you to have at least the minimal coverage. Now, the question is why do you need car insurance and if your life is risky without car insurance.

Car insurance is important mainly for the financial reasons rather than the physical one. It is indirectly related to your life. You actually require car insurance so that you can manage to handle the costs of repairing a damaged car or pay compensation to the other person hurt in the accident (if any).

Life Risks without Car Insurance

Car InsuranceIt is not your life that a car policy helps in saving. It is rather, your finances that a car policy helps in saving. That is, when you get involved in a car accident, there are various costs associated with the accident. There are the medical costs, the costs of repairing your car, the cost of paying compensation to the other driver and so on.

So, in such a situation if you do not have enough savings in the form of insurance, you may end up incurring huge debts.

So, the main reason due to which you will be required to buy auto insurance is your finance and in order to manage the different costs of maintaining a car. There is another very important reason too, due to which you need to buy car insurance. It is because, your state may require you to have car insurance policy on a mandatory basis.

Legal Requirements for Auto Insurance

There can be some legal issues too, if you do not have car insurance. Other than the states requiring you to have a minimum coverage, the other driver can also sue you for the compensation. The cost of handling a lawsuit is quite a costly proposition. So, it is important for you to have car insurance if you own a car and if you drive that.

It can indeed seem to be a risky proposition to drive a car without car insurance in place. In addition to the above reasons, you may also be required to face different forms of lapses in the coverage. That is, if you actually have been driving a car without car insurance, you will end up having lapses within the coverage with regards to your records.

This will mean that when you will be applying for a car loan, the insurance company in question is going to find this out from the records. With regards to this, it can be said that such lapses are taken by the insurers as red flags. As a result, they can charge you really high premiums.

This can seem to be one of the worst situations where you will be required to buy one if you are in a state that requires you to have car insurance as a rule.

So, it can really seem to be a risky thing to drive a car without the insurance in place. Though, there are no direct life consequences but there can be other financial consequences too.