The Consequences Of Driving Uninsured [INFOGRAPHIC]

Millennials don’t have it easy – homeownership rates for millennials are down compared to other generations, and their retirement savings are far below what they need to be, on average. This extends to car insurance as well. Millennials pay significantly more for car insurance than other generations, and worst of all, are far more likely to drive uninsured.

Driving Uninsured

[REITs]

Q4 hedge fund letters, conference, scoops etc

Unfortunately, driving while uninsured has its own costs, too. We typically think of the consequences of driving uninsured as being mostly legal – when an officer asks you for insurance and registration, you don’t want to be caught light-handed. However, driving while uninsured is expensive, too. Compare.com found that drivers who let their auto insurance lapse pay 44% or more for their car insurance policies than drivers who have kept up with their payments.

Driving Uninsured

There are also substantial legal penalties for driving uninsured. In Delaware, uninsured drivers can face a mandatory fine of $1,500 to $2,000, and a license suspension for six months. Penalties vary substantially by state – for example, in Tennessee, it’s considered a simple traffic infraction – but the financial cost will get you no matter where you live.

Car Insurance

Car Insurance

The reasons why drivers are letting their policies lapse may vary. A lot of them may have just stopped driving and assumed they wouldn’t need it anymore. But even if you’re not getting behind the wheel, car insurance companies won’t cut you any slack. “Even if someone has no plans to drive their car during the period of non-payment, insurance companies can define the policy as lapsed, meaning when they try to renew the policy, the premium cost can be substantially higher,” according to Andrew Rose, CEO of Compare.com.

Driving Uninsured

The solution? If you’re hanging up your driving gloves, call your car insurance company and ask them to change your policy to comprehensive-only. This will ensure your car from damage while it’s sitting in the driveway (for example, if a tree falls on it) while not insuring you for any driving. This will be substantially cheaper than leaving your policy alone and will save you money over the long-term.

Car Insurance

And if you’re currently insured? You might consider uninsured motorist insurance. It helps ensure that if you’re in an accident with a driver without insurance, you’ll still be covered. It’s typically an inexpensive add-on to a policy, and can save you some pretty significant headaches if you encounter an uninsured driving on the road.




About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver