Could I Really Lose My License For Driving Without Auto Insurance?
California has a financial responsibility law which is similar in all states. This law specifies how much minimum insurance a driver must possess to drive on California roads. In California this minimum coverage is $15,000 and is referred to as Liability Insurance which covers a driver for any damage they cause to another in an auto accident. This includes damage to a victim’s health or property damage to the victim’s car. Liability insurance will cover and protect you no matter who is driving the car unless that party is specifically excluded from the policy. An exclusion takes place when a kid or other family member is specifically excluded or not covered and then drives the car. If the owner lets a friend drive the car then that person is covered.
The law states that auto insurance follows the car. Thus if your friend is using your car and they have auto insurance then the insurance on the car is primary. Thus if you have $15,000 of coverage that would be primary and kick in first. If your friend who is driving your car is insured for $100,000 on their car, that would be secondary. However it would only pay for the difference between their $100,000 policy and your $15,000 policy……..thus their company would pay only $85,000.
Here in the Coachella Valley we read about Checkpoints all the time. The abundance of checkpoints is because we have more Drunk Driving deaths in the greater Palm Springs community than anywhere else in the state…..per capita. At the check point you will be asked for your driver’s license, registration and insurance. Driving without insurance in some states will result in the police officer towing the car. We must all remember that sometimes we drive in another state and do not know the laws of that state.
If you are in an auto accident in California and do not have liability insurance coverage on THAT CAR then DMV will SUSPEND your license to drive for ONE YEAR…..period. Then if you drive without a valid driver’s license and are stopped you are guilty of driving without a valid California Driver’s License which is a violation of 14601 of the Vehicle Code. In the Indio court that could result in the DA requesting a sentence of 10 days in jail.
Not only do you have to worry about losing your license for not have liability insurance you also have to worry about your financial exposure. If you have assets and you are not insured then all your assets are at risk. An injured driver can sue you and get a judgment and then attach your assets. The judgment can be renewed every 10 years so that it follows you for the rest of your life or until you file Bankruptcy or pay it off. In addition if your coverage is not high enough you still have Financial Exposure for the difference between your coverage and the value of the victim’s case. I always advise my clients to have enough coverage to purchase an Umbrella insurance policy for a few million which is much cheaper than the underlying coverage you might purchase for 1-2 million of coverage. I believe my umbrella policy costs $300- $400 for two million of additional coverage.
Remember that the whole purpose of having insurance is to protect your assets in the event that you are found to be at fault in an auto accident that causes injuries to an innocent party. Carrying auto insurance will also help to keep you out of jail in some instances. If you drive without insurance you may have more difficulty obtaining affordable auto insurance in the future. Auto insurance companies like to see that you have had insurance in the past and don’t like to take on drivers that are higher risks, such as those driving without auto insurance.
Do yourself and your neighbors a favor and obtain auto insurance overage……at least the minimum limits of liability insurance that are required by your state. It will protect you and it is the right thing to do.