Finance-news's Personal Finance Blog

If you don't have your car insurance payment automatically deducted from your bank account, it may have happened to you. You write the check for your premium and put it in the mail or at least you think you did. A couple weeks later you get a letter-your insurance company didn't get your payment and your policy ended yesterday. You resolve to sign up for auto-pay first thing in the morning-but in the meantime you still have to go to work. On your way home from work, you're stopped by a cop because your blinker isn't working.

He may have only intended to give you a warning, but since you have no proof of insurance, he has no choice but to give you a ticket. No insurance can mean a big fine-what can you do?

First, don't panic. While a no-insurance ticket is serious, it's not the end of the world. How it turns out depends on your state's traffic laws and often on your local prosecutor.

State Attitudes Vary

States generally treat lack of insurance in one of two ways:

Strict Liability

Some states don't care why you had no insurance.Nor do they care if you mistakenly thought you were covered, or if your insurer failed to tell you your policy was cancelled.The fact that you didn't have insurance, regardless of the reason, is enough to convict you.

Intent Requirement

Other states require that you had the intent to drive without insurance coverage.In this case, the state must prove that you were knowingly rather than accidentally driving with no insurance. If you can prove that you believed your policy was still in force, the state may be unable to convict you.

There May Be an Affirmative Defense

Some states allow for "affirmative defense". In affirmative defense, you don't deny that the offense (in this case, driving with no insurance) occurred, but rather that you had a good reason for doing it. For example: in Texas, if you are not required to have liability insurance for a car if it is "possessed solely for the purposes of repair". If your friend asks you to work on his car and you get stopped while driving it to your house (where you're going to work on it), then, provided you have no ownership interest in the car, you have a defense against the charge of failure to maintain insurance.

Vintage cars, since they are not used for "regular transport", may sometimes be exempt. Likewise, some states have an exemption for farm vehicles-usually trucks-which are used solely for the purpose of farm activities and are not driven more than a certain number of miles from the farm location. These vehicles usually require a special license commonly called a "farm tag".

Charges May Be Reduced or Even Dismissed if You Act Responsibly

If you truly were driving without insurance, the best strategy is to obtain coverage as quickly as possible. Some states look favorably on drivers who redress the problem quickly, and even if your state has no official stance, your local prosecutor may have his or her own policy. In many areas, if you obtain coverage promptly after receiving a ticket, your case may be dismissed or you may receive a deferred sentence-meaning that provided you don't re-offend within a certain number of months, the charge is dropped. You may also receive a reduction in your fine if you act responsibly and get insurance promptly. If you don't acquire liability insurance quickly, it has a more negative impact on your insurance, your license and your finances -- plus you run the risk of getting another citation.

If you actually were covered by liability insurance but weren't able to produce proof, your situation is less precarious. Who hasn't forgotten their wallet, complete with insurance card, at home? Or had some important document disappear into the depths of the glove box, never to be seen again? Many prosecutors will drop the charge or reduce your sentence if you are able to prove that you did in fact have a valid insurance policy in force at the time of your citation.

Penalties for Failure to Carry Motor Vehicle Insurance

If you're guilty of driving with no insurance and you have no valid defense, there are several outcomes.

Most tickets issued for failure to maintain insurance result in a simple fine.

Some penalties may include a period of time on probation. This is especially common in the case of deferred sentence; you are often put on probation for the period of the deferral.

Depending on where you're located, if your driving history is extremely bad the penalty may include time in your county jail. In this case, consulting an attorney is advisable.

As with other traffic tickets, if you don't show up in traffic court, it may result in an arrest warrant for failure to appear.

Traffic School

Enrolling in a

defensive driving course traffic school can be help when you get a citation for lack of insurance. Not only will a defensive driving course help you become a safer driver, it can help get your ticket dismissed. Prosecutors are often willing to dismiss charges or impose a deferred sentence if you enroll in traffic school. This stops you from accumulating points on your license and keeps your driving record clear.

Struggling to pay premiums on your car insurance? Don't worry: most driver's can easily lower the cost of their insurance by making a handful of simple changes. All you need to know is how to navigate the insurance market to find better deals, and that's where we come in! The following tips will help you save huge sums of money while still selecting a policy that works for you:

A Surefire Path to Lower Premiums:

Depending on who sells you your insurance, you may qualify for a wide range of discounts that you didn't even know about, which can send your premiums through the floor.

There are three key ways to lower the cost of your car insurance:

1. Safer cars- If the vehicle you drive has improved safety features or does less damage to the environment, your insurer may be willing to offer you a discount. Important features include:

Hybrids
Seat belts that activate automatically
Airbags for the passenger seat
Alternative fuels
An anti-lock braking system

2. Safer drivers- If you've demonstrated that you are unlikely to get in an accident, insurance companies will give you a discount. The following behaviors will help you do this:

Having a B grade or better
Having a low-risk job
Ask your insurance company which jobs it considers low-risk
Passing a

traffic school / defensive driving or supplemental driver's ed class
Driving safely and avoiding accidents
Joining an auto club
Reducing the number of miles you drive each year

3. Combined policies- Companies that offer different kinds of insurance will reward clients who buy more than one policy, sometimes by loweirng their premiums by as much as 30%! If possible, consider buying auto, life, and homeowner's insurance from the same providers.

Comparing Deals

When comparing potential insurers, take into account the opportunities that each one offers for discounts. Some companies offer few such opportunities, while others provide you with lots of ways to pay less.

The best way to find policies that will both fit your needs and help you save money is to compare as many insurers as possible. If you fail to do this, you could overlook some great bargains. The three keys to comparison shopping are:

Asking an independent insurance agent (who can show you quotes from many different insurers)
Calling an agent from each insurer and discussing the company's policies directly
Comparing premiums online

While it's important to consider discounts, make sure to also take starting premiums, coverage, and all other aspects of your insurance agreement into account before choosing a provider.

Other Tips

Besides potential discounts, consider the following factors before deciding on a provider:

A.M. ratings- The better a company's rating, the more likely it is to reward your insurance claims fairly.
Comprehensive coverage- Make sure you fully understand the terms of your coverage before you accept a policy.
Speak to an auto insurance agent about the limits of different coverage agreements to be sure you have protection from likely accidents.
Make sure the policy you purchase provides you with the minimum amount of coverage required by law.
Customer service- Find a provider whose clients are generally happy with the way they are treated. Call the Insurance Department for your state or go online to compare different companies' customer service records.
Starting premiums- Discounts are great, but don't let them fool you into choosing a policy with unreasonably costly starting premiums. It's essential to take both original premiums and potential discounts into account when looking for a policy that meets your needs. Quotes vary wildly from one company to another.