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Uninsured Drivers and Car Accidents

The primary reason people drive without insurance is obvous - money. Some drivers intentionally cancel their policy to save money while others fail to pay their bill when it is due and their policy is cancelled for non-payment. Either way, this causes problems for innocent drivers because there is no mechanism by which the insurance company notifies the police or government that a policy has been cancelled. Instead, a driver has to certify that they have insurance when they register a car, but nothing stops someone from cancelling their insurance after doing so. If that is done, as long as the person does not get into an automobile accident, they are saving money.

For people facing severe money issues, not paying insurance is a risk they are willing to take to be able to pay their rent, buy food, or have money for more urgent needs. Moreover, rarely is anyone arrested or even cited for not having insurance – instead, people usually tell a reporting police officer that they have insurance with a company (most likely the one that they previously had) and that is sufficient to avoid a ticket. They also claim that they thought it was valid or didn’t know it had been cancelled. I have rarely, if ever, seen a police officer cite a driver not having insurance, even after a serious motor vehicle accident causing significant personal injuries.

A similar situation is collision coverage. That covers you for damage to your vehicle that is either your fault or not anyone’s fault. Therefore, it generally does not affect any other driver. Many people cancel this insurance to save money; hoping that they do not have an accident. However, if they do have an accident and there is no other driver who is responsible, or the other driver also has no insurance, then they have a problem – there is no insurance to pay for the damage to their car.

If a car is older and the owner is willing to junk it in case of an automobile accident, then cancelling collission coverage may make sense. But, if not, it can cause seroius financial issues - right afer an accident, when you need your car to get to a doctor and continue working, you will not have one and will have no insurance to use to quickly get one. Even if the other driver involved in a motor vehicle accident has insurance, that insurance company may take a long time to invesigate the accident and make a decision on whether to accept liability for your damges, both to your car and your personal injury damages.

Overall, insurance seems like a luxury to many people and for people facing dire financial needs, it may be. But, not having it is not only illegal, but potentially risky. The money you save may not be worth the cost you will pay if you are in a serious motor vehicle accident. Before cancelling your insurance, it makes sense to reduce coverages and raise deductbles.