Auto Insurance? We don’t need no stinking auto insurance! Right? Wrong.
Aside from the danger of getting a very expense ticket (about $1200), there are other real dangers for driving without auto insurance – including the fact that your life can be jacked in an instant if you are unlucky enough to get into an accident without insurance, even if its not your fault.
|Over the years, as an Insurance Defense Attorney, I have become an expert on disasters arising from drivers without auto liability insurance. They extend far beyond getting tickets. |
And here is a list of the very real dangers a driver faces if they get into an accident without insurance (from minor to life disaster).
Danger #1: Big Fine
Every person with a California Drivers License is required to have auto liability insurance to comply with the Auto Financial Responsibility Law officially known as Vehicle Code section 16028.
Section 16028 also requires drivers to carry proof of liability insurance with them at all times while driving. A driver who has insurance, but fails to carry proof with them is actually in violation of the law and faces a fine of about $1200. Although many judges will give people a break if they show up in court with proof of insurance that covers the date of the incident, the judge is not required to do so. Some Judges are hard asses, and will give no one a break.
Danger #2: Drivers License Suspended Automatically for 6 Months
When a person gets into an auto accident with damages more than $500 (just about every accident), they are required by law to notify the Department of Motor Vehicles of the accident within 10 days, regardless of whose fault it was. DMV has a standard form for these notices, and it requires the driver to tell DMV their insurance policy number. DMV then uses the form to contact the insurance company and verify that there was a valid policy.
If the DMV cannot verify the insurance, (or if there is no report), there is an automatic Drivers License Suspension for 6 months that cannot be challenged. The suspension applies regardless of who was at fault for the collision.
Many people get caught up in this 6 month suspension because although they think that they have proof of insurance, when the DMV goes to the insurance company to verify it, they discover the policy was canceled for a failure to pay. Just having the paper is not good enough. The policy must be valid or the drivers license is suspended.
People caught driving on a suspended license face criminal charges (Vehicle Code section 14601.1), 2 points on their driving record (same as a DUI), arrest, and impoundment of the car for 30 days.
Danger #3: No One Will Help You If You Injure Someone and Get Sued:
Auto Accidents that result in injuries often produce lawsuits. Whoever is injured will normally sue the other driver (and any other owners of the car) for damages in court, including:
1) medical bills, 2) pain and suffering, 3) lost wages; 4) loss of enjoyment of life; 5) property damages, etc.
Even in a small accident, these “Damages” can be thousands or tens of thousands of dollars. If you lose one of these lawsuits, the court will issue a judgment that may be executed against your bank accounts, your wages (current and future), your house, and even your personal property way in the future.
When you buy an auto insurance policy, you get 2 very valuable protections against this problem that most people do not understand. They are called:
1) Defense and 2) Indemnification.
These protections become very important if you are unlucky enough to be at fault in an accident.
“What? What does that mean? I thought that insurance means they pay for my damage?”
“Indemnification” means that the insurance company is required to pay for any damages you are responsible for up to the policy limits if the court says you must pay. That is what “Indemnification” means. The insurance company must pay for the damages the law says you are responsible for.
But if the damages exceed the policy limits, then you have to pay out of your own pocket. This is why policy limits are important.
If you do not have this indemnification protection from auto insurance, and the court says you must pay, you will have to pay out of your own pocket, even if it takes 20 years. And worse yet, if an injured person gets a judgment against you for an auto accident, the Dept. of Motor Vehicles will suspend your drivers license until the entire bill is completely paid off, even if it takes 20 years.
B. Defense Protection (Insurance Defense Attorneys).
If you get sued because of an auto accident for personal injuries, you will need help. There will be lawyers working very hard to make sure their damages are as high as possible, and to make sure they find all of your assets and money to collect. A person not trained as a trial attorney trying to deal with this alone has no chance of stopping the train. It will run you over.
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And if you have to hire a defense attorney to protect you from an auto accident lawsuit, they are going to charge you by the hour. A normal hourly rate for a defense attorney would be $150-200 per hour. And if the case drags on for 3 years (like one I have now) it would be a necessary expense that would completely bankrupt most people.
But if you have auto liability insurance, the worries are over from the start. The law requires the insurance company to hire defense attorneys for you, and pay for them.
That’s right – the insurance company would have to hire attorneys to defend you, even if the accident was your fault. Even better, the insurance company must pay for them until the end of the case, even if it takes 3 years. And these defense costs are not deducted from the policy limits. There is essentially no limit on how much the insurance company must pay to defend you in a law suit.
Bottom line here is that Auto Insurance is prepaid legal fees for personal injury lawsuits against you. And when you understand that, you understand that the cost of auto insurance is always, always worth the money.
Danger #4: You Cannot Get Paid If Someone Injures YOU, Unless You Have Insurance.
Even if some rear ends you at 90 mph and paralyzes you, you cannot get paid for your pain and suffering, nor lost wages if you did not have valid insurance at the time of the accident.
This is because Prop 213, also known as California Civil Code Section 3333.4 restricts drivers injured in a motor vehicle accident from recovering non-economic losses for compensation for pain, suffering, inconvenience, physical impairment, disfigurement, and other non-pecuniary damages if the injured person was not insured at the time of the accident.
It’s really a cruel law in my opinion, but if you are injured without insurance, you are on your own.
So even if the accident was not your fault, but in an instant you are severely injured, a failure to simply buy auto insurance as the law requires can jack your life and bankrupt you and your family.
I hate to be so blunt about it, but in the opinion of this trial attorney, Auto Insurance is always, always, worth the money. When you buy auto insurance you are not only complying with the law, but you are paying someone else to take a risk that you cannot afford.
If you have those moments (like we all do nowadays) where you say to yourself “I cannot afford auto insurance” – take a deep breath and think for a second. In reality, you cannot afford to not have it. A lack of auto insurance can jack your life in seconds.
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