Do You Need Insurance To Drive?

Key Points:

• If you own a registered vehicle, you’re required to have insurance in nearly every state.
• States require liability insurance, which compensates other people when you cause an accident.
• Driving without insurance has legal consequences, and a lapse in coverage will increase your rates in the future.

If you’re a first-time driver, you may be wondering: Do you need insurance to drive a car?

Yes, you do need insurance to drive a car. Almost every state has minimum car insurance requirements. And in the few that don’t, you’re responsible for covering damages you cause.

Below, we’ll discuss car insurance requirements and which providers we recommend from our picks for the best auto insurance companies. Any time you shop for car insurance, we recommend getting quotes from multiple providers to be sure you’re getting the right price for coverage.

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Do You Need Insurance To Drive?

There are only two states where you can drive without an insurance policy: New Hampshire and Virginia. In these states, you can forgo insurance, but you will be held liable for damages you cause. If you cause an accident and don’t have insurance, the state can suspend your license or fine you. Most people do not have enough assets to self insure, so even in New Hampshire and Virginia, drivers typically need to get car insurance.

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Why Do You Need Insurance To Drive A Car?

Car insurance protects you and your finances in the event of an accident. If you’re driving uninsured, you could face serious legal repercussions. Nearly every state requires bodily injury and property damage liability insurance:

• Bodily injury liability insurance (BI): This covers the medical costs of the other driver in an accident you cause.
• Property damage liability insurance (PD): This type of coverage protects you from having to pay for repairs to another car or other property after an accident you cause.

Some states also require medical coverage and/or uninsured motorist insurance:

• Medical payments (MedPay): MedPay covers your medical bills after an accident, regardless of who was at fault.
• Personal injury protection (PIP): PIP covers your medical bills after an accident in no-fault states.
• Uninsured/underinsured motorist coverage (UM/UIM): UM/UIM coverage pays for damages to your vehicle after an accident with an uninsured motorist or when the other driver’s insurance does not cover the full cost of damages and medical bills.

Two other kinds of coverage that are important to consider when looking for a new car insurance policy are collision and comprehensive coverage. These aren’t required by law, but are strongly recommended. Lenders require these to fund an auto loan.

• Collision coverage: If you have this type of insurance, damages to your car will be covered after an accident, regardless of which party is at fault.
• Comprehensive car insurance: This type of insurance covers damages to your car that aren’t the result of a collision. It can include hail storms, floods, animal damage, theft, vandalism, and more.

Do You Need Insurance To Buy A Car?

Yes, you need auto insurance coverage to buy a car. You can get same-day insurance coverage over the phone from major insurers like State Farm and Progressive. So, it is possible to go to the dealer, shop for your car, then get insurance for that model before you sign on the dotted line. Dealers will require coverage to let you drive off the lot, and lenders require it for an auto loan.

Do You Need Insurance To Buy A Used Car?

If you already have an insurance policy for a different car, you can use that coverage when buying a new vehicle. You’ll typically have a week to 30 days to notify your provider about a new car. If you’re adding this car to your policy, you’ll have to pay more for your insurance.

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Do You Need Insurance To Drive Someone Else’s Car?

You are usually covered when driving someone else’s car even if you don’t have an auto insurance policy. This is because car insurance follows the vehicle. So, make sure your friend has insurance, first. It’s generally not a problem if someone else drives their car with permission.

Depending on how frequently you drive a friend’s car, or any car not insured in your name, you might or might not need car insurance. If you borrow a car frequently from someone you live with, you should be listed as a driver on their policy. But if you frequently drive vehicles you don’t own, you might want to consider purchasing non-owner car insurance.

Non-Owner Car Insurance

Non-owner car insurance is for people who don’t own a car of their own but frequently drive someone else’s vehicle. It includes liability coverage to pay for bodily injuries and property damage that you cause in an at-fault accident. It does not cover damage to the car you’re borrowing, nor does it cover your injuries in an accident you cause.

Non-owner insurance is also a good idea if you frequently rent vehicles. Rental agencies will require you to buy their insurance add-ons, which can be expensive. In the long run, non-owner insurance can be cheaper instead of buying add-ons each time.

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Penalties For Driving Without Insurance

Penalties for driving without insurance differ depending on your location and the situation. If you cause a collision and do not have proof of insurance, the penalties will be more severe than if you are fined for driving without insurance. You could receive a fine for hundreds or thousands of dollars depending on any previous issues you’ve had with your record.

Also, when you cause an accident without insurance, the victim can sue you for compensation. In some states, they might be able to sue you in civil court for additional damages beyond the basic repair or medical costs.

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States Where Insurance Isn’t Required

New Hampshire and Virginia are the only states where car insurance is not mandatory. Every other state sets minimum insurance laws for drivers to follow.

New Hampshire

While New Hampshire doesn’t require insurance, it does have financial responsibility laws. This means that if you’re involved in an accident, you are held financially responsible for paying for damages or injuries that you cause.

If you find that you don’t have the savings to afford the potential cost of an accident, you can purchase car insurance as normal. Drivers who do purchase insurance are required to have at least the following coverage:

• $25,000 bodily injury liability per person
• $50,000 bodily injury liability per accident
• $25,000 property damage liability

Virginia

Similarly, Virginians don’t necessarily have to buy car insurance either. Although car insurance is strongly recommended in Virginia, motorists can choose to be held financially responsible. If you choose this option, you need to pay an uninsured motorist fee of $500 every time you renew your registration. This doesn’t provide insurance, it simply lets you drive without it. You might find insurance below $500 per year in Virginia, so it’s a much better idea to get coverage.

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Automobile Self-Insurance

If you read the fine print of your state’s car insurance laws, you might find a section about self-insurance. Automobile self-insurance means you deposit certain cash amounts that cover the minimum liability limits required by the state. You can do this in one of two ways:

• Deposit the required cash with your local Department of Motor Vehicles or State Department of Insurance.
• Purchase a security bond.

Either way, you will have to submit proof that you have the financial capacity to cover the cost of damages or injuries you cause in an accident.

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Do You Need Insurance To Drive: Our Take

To wrap up, you need insurance to drive your own vehicle in nearly every state. You don’t need insurance to drive a friend’s insured vehicle or another borrowed car. While some states don’t strictly require insurance, it’s usually a good idea to have it instead of taking on liability yourself.

Our Recommended Car Insurance Providers

Whether you’re shopping for a new car insurance policy or shopping for a new car, you need insurance to get where you want to go. We recommend getting quotes from multiple car insurance providers before deciding which one is right for you, and we can help you get started.

Geico: Best For Basic Coverage

Not only is Geico available in all 50 states, but Geico offers a wide range of coverages and discounts that could help you save money on your car insurance.

Geico coverage includes the standard types of auto insurance, plus helpful add-ons like:

• Roadside assistance
• Mechanical breakdown insurance
• Rental car reimbursement

Geico has many discounts that could help you save money. Some groups that qualify for discounts from Geico include military personnel, drivers who’ve been accident-free for the past five years, loyal customers, safe drivers, good students, and more.

Read our full Geico auto insurance review for more information.

USAA: Best For Military Members

In our review of USAA, we named this company the best car insurance for the military and their immediate family members because of its high marks from industry experts, extensive coverage, and high number of discounts.

USAA routinely receives top marks in J.D. Power studies, plus it has an A++ financial strength rating from AM Best. Additionally, USAA has coverages like roadside assistance, rental car reimbursement, and accident forgiveness to protect customers on the road. And USAA offers discounts to make a car insurance policy more affordable, including:

• Military installation discount
• Family discount
• Low annual mileage discounts

Read our full USAA auto insurance review for more information.

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Do You Need Insurance To Drive: FAQ

Below are a few frequently asked questions about car insurance requirements.

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How We Rate Auto Insurers

Our review team extensively researches auto insurance providers to deliver informed and unbiased assessments of leading companies. We evaluate several key rating factors that are important to consumers to determine which providers are the best in the industry:

• Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
• Availability: Insurance companies that offer wider availability to consumers in terms of state availability and few eligibility requirements are more likely to meet consumer needs.
• Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
• Pricing: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
• Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer a smooth experience.
• Technology: Providers with an online quote tool, easy-to-use claims app and a usage-based insurance app score best in this category.

*Data accurate at time of publication.

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