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What Happens if I Don’t Purchase Liability Insurance?

car insuranceYou may already know that you’re required to purchase liability insurance if you want to drive in the state of California. Yet, you may also be weighing the risk of a penalty against the cost of insurance.

What happens if I don’t purchase liability insurance ,or allow my current policy to lapse?

If you’re pulled over by the police for speeding, running a stop sign, or even just in a routine traffic stop, you must provide proof of liability insurance. This is also called “evidence of financial responsibility”, meaning you have taken measures to cover damages you could do to other vehicles if you cause an accident. Failing to produce this evidence will result in a traffic ticket in the amount of 1,000 dollars or more.

There are other potential consequences of failing to purchase liability insurance. Your vehicle can be fined and financial ruin.

Even if you never cause an accident, there is a downward cycle of consequences which can feel like a trap that is difficult to escape. If you’re unable to pay that 1,000 dollar (or more) fine, you can lose your license. If you’re caught driving without a license, that is yet another crime punishable by law. It’s easy to see how one mistake can snowball into a mountain of debt.

Once you do purchase liability insurance, remember not to let the policy lapse. If your policy is canceled due to non-payment, you must purchase another policy within 45 days. Otherwise your vehicle registration will be canceled. Driving an unregistered vehicle is, of course, yet another violation which carries consequences.

It’s pretty clear that the easiest thing to do is to simply comply with the law and you haven’t had any accidents or violations, your rates will usually decline to some degree.