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Driving without insurance? It'll cost you



Car and dollar signDriving without insurance may seem like a money-saving strategy, but you're taking a big gamble that likely won't pay off. If you have an accident, you are going to be responsible for paying all medical and property damage costs, and you could lose assets such as your home. Even if you're lucky enough to avoid that, you will wind up paying more for a new policy after a lapse in coverage.

But you can still find sufficient coverage if you know what steps to take.

All states except New Hampshire require you to have a minimum amount of liability insurance, and some also require other types of coverage such as personal injury protection and uninsured/underinsured motorist coverage. Penalties for driving without insurance vary by state; you could get a ticket with a hefty fine if you get caught and lose your license and have your registration canceled.

About one in eight drivers nationwide is uninsured, according to a 2014 report by the Insurance Research Council. So chances are good you won't be the first person with your problem to approach an agent.

Consequences of driving without car insurance

You do need to be realistic, though. An insurance lapse puts you in a riskier category of customers. Some carriers may deny your application.

That doesn't mean others will follow suit--- in fact some companies specialize in catering to the high-risk market. But don't be surprised if a carrier refuses to cover you.

"And some carriers might limit the amount of coverage they'll offer you," says Jim Kuryak, principal of Niagara National Insurance Group Inc., an independent agency in the Buffalo, N.Y. "You can expect your premiums will be higher."

With an insurance lapse you won't be eligible for as many discounts, says Amanda Shore, an operations analyst for the Insurance.com call center. Companies offer discounts for continuous coverage. The longer you've maintained insurance, the better.

What about short lapses?

Kuryak says in many cases an insurance company will reinstate the policy if the lapse is only a few days, especially if you have a good record with that company. If the lapse is longer, then you'll have to reapply for coverage, and the company might deny the application, forcing you to search elsewhere.

His advice to customers who are uninsured: "Get something in place ASAP or turn the plates in."

Otherwise fines could accumulate, depending on your state's regulations. In Kuryak's state of New York, for instance, the fine for a car insurance lapse is $8 a day for the first 30 days, $10 a day for 31 to 60 days and $12 a day for 61 to 90 days. Your car registration is suspended for the same number of days you keep the plates without having liability coverage. After 90 days your driver's license is revoked if you haven't gotten insured and still have the plates. That's not counting the traffic court fine you'll face if you get in an accident without insurance.

Shore says if all you can afford is the bare minimum of coverage to comply with state requirements, that's better than nothing. Once you maintain that coverage for six months, you can shop around. The good news: You'll find more options and better rates for being insured.

The cost of a lapsed car insurance policy

National average clean-record premium -- $1,215

7-day lapse: $1,287

15-day lapse: $1,287

30-day lapse: $1,291

60-day lapse: $1,368

Above rates methodology: CarInsurance.com commissioned Quadrant Information Services to provide a report of average auto insurance rates for a 2014 Honda Accord for nearly every ZIP code in the United States. We calculated rates using data for six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm.)

Averages are based on insurance for a single 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. This hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage. Average rates are for comparative purposes. Your own rate will depend on your personal factors and vehicle.

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