Don’t even dream of suspending your auto insurance to save money unless you plan to get rid of your car entirely or you feel like dealing with some ugly consequences. Regulations vary from one state to the next, but nowhere in the United States is it legal to operate a car without at least minimal insurance. You can save money by changing your insurance coverage, but you can’t get rid of insurance altogether.
You must have auto insurance before hitting the road. Insurance is intended not only to protect you and the passengers in your vehicle but also to protect pedestrians, other drivers and property. Many states even require you to carry coverage for uninsured motorists, in case you're in an accident with someone who doesn’t have proper coverage. Each state has its own coverage requirements, but you'll always need some level of liability coverage in the event of bodily injury or death and for property damage. You must carry proof of insurance in your vehicle.
Cars in Storage
You might decide to save money by putting your car into storage and pounding the pavement with your feet or switching to public transportation. But many states require you to insure a stored car even if it isn’t being driven. It would be mighty tempting to take that stored car for a little spin around the corner just once in a while, and the government knows it. Check with your local motor vehicle department for requirements in your area. Even if you live in one state part-time and in another the rest of the time, like a snowbird who winters in Florida, the stored car needs to remain insured.
Facing the Consequences
The consequences of driving without insurance vary in severity from state to state, but they’re never pretty. In California, for example, if you’re caught driving without insurance, you may have your license and registration revoked and your car impounded. In New York, you’ll face a traffic court fine of up to $1,500 plus a civil penalty of $750 to reinstate your license. New Jersey offenders face financial penalties, court costs, loss of a driver’s license and community service. Other states have similar financial penalties and often revoke licenses.
How to Save Money
You can’t save money by getting rid of your insurance, but there are other ways to economize. Find a reliable insurance agent who will help you comparison-shop for the best rates. If you get a policy from the same insurer as your homeowner or rental policies, you may get a discount.
One simple way to save is to increase the amount of your deductible, which lowers your premium. A higher deductible has some risk if you get into a fender-bender and then have to pay for repairs out-of-pocket, but remember that if you never make a claim, you’ll save plenty of money every year with the reduced premium.
If you have access to alternative transportation, drop the rental reimbursement coverage and save a few bucks that way. If you’re a member of AAA, you can probably drop the towing coverage, too. Other discounts are available if you have anti-theft devices, low mileage, a good credit history or membership in groups such as a college alumni association or a professional organization.
Annabella Gualdoni has written newsletters and reports for corporations and nonprofits since 1994. She is a real estate professional and also teaches subjects including international cooking and travel, dating/relationships and personal finance. Gualdoni has a Bachelor of Arts in international development from University of California, Berkeley, a Master of Arts in international relations from Boston University, and a Juris Doctor from Boston College Law School.