Consequences of Driving without Car Insurance

Consequences of Driving without Car Insurance

Automotive

Everyone knows that if you wish to drive a car you have to carry auto insurance. When a person first gets their driver’s license from the DMV one of the requirements is showing proof of a valid auto insurance policy that is at least a liability only policy. This is referred to as “Showing Proof of Financial Responsibility”.

Auto insurance is not cheap, especially for someone under the age of 25 or anyone who is going through a financially difficult time in their lives. Many people make the decision to drop their auto insurance policy and take a chance that they will not have an accident. The thought process is typically something like “I’m a good driver; I’ve been driving for X years and never had an accident. I’ll be ok”.

Well that may be true, they might be the best driver on the road, but what about all the other vehicles on the road and all those distractions drivers face today, including talking and texting on cell phones while driving? In reality it could end up costing you more than you think if you are caught driving without insurance.

What is the Penalty for Driving without Insurance?

If an officer stops you and asks for your driver’s license, registration and proof of insurance and you are unable to provide the officer with proof of insurance, depending on what state you live in, the officer may seize your vehicle plates or tags and quite possibly impound your vehicle.

If your vehicle gets impound, you are going to have to pay all the fees associated to the impound to get your vehicle out of impound, which could run several hundred dollars or more depending on how long your vehicle sat in impound before you went to get it.

You may have to acquire new plates or tags for your vehicle, which is another cost. You are also going to have to pay the DMV between $150 and up to $1,000 depending on what state you live in to get your driver’s license reinstated. The biggest ongoing expense is going to be the required SR22 filing that the DMV is going to impose on you in order to reinstate your driver’s license.

An SR22 filing is basically an agreement between the DMV and your insurance provider that says that if for any reason there is a lapse in your insurance coverage that your insurance company is obligated to inform the DMV of this lapse.

An SR22 filing or as it’s commonly referred to SR22 insurance is going to impact your insurance rates for an extend period of time. Because depending on what state you live in your DMV may require a longer SR22 filing period due to your lapse in insurance coverage.

How much does SR22 insurance cost?

You can expect to pay between 2 and 3 times as much for an SR22 insurance policy in this scenario compared to what you would have been paying before for your auto insurance. So if you are under the age of 25 and you were paying say $100 a month for insurance coverage on your vehicle, you can expect your insurance rates to increase to $200 to $300 a month, or more. So as you can see the risk of getting caught driving without insurance can far outweigh the cost of just keeping your auto insurance policy enforce.

If you find yourself in this situation one of the best things you can do for yourself to try and save some money on your insurance is to go out and get multiple SR22 insurance quotes from various providers in your area. If you do not own a vehicle but still need to drive you might want to look into getting a non-owner SR22 insurance policy to save some additional money.

Ditulis Sepeda �� Pada 3:03 PM

How do car insurance companies calculate the premium rates?

How do car insurance companies calculate the premium rates?

Automotive

The business of insurance is called underwriting. The company enters into a contract (called a policy) and agrees to indemnify a group of people like you against defined losses. So it uses some heavy duty math to work out the probability of the losses being incurred. It's called risk assessment and relies on a complicated use of statistics. For vehicle insurance, the companies collect the details from every reported traffic accident in the US looking at the age, sex and occupation of the driver, the make and model being driven, the time of day, the road conditions, and the extent of the damage. The insurers share the information on the current costs of replacement parts and the labor to fit them.

They also manage to talk the health insurance companies into sharing their current costs on medical treatment for those injured in traffic accidents. With all this information, they can make good estimates of the cost of loss, i.e. the total amount they may have to pay out if they insure, say, 100,000 drivers. They take this estimate, add the cost of running the insurance company and a profit margin. This total is then divided between all the 100,000 as their premiums. Some companies divide the total equally so the good drivers subsidize the bad. But the majority adjusts the individual amounts based on the driver's safety record. That way, each policy holder pays more or less depending on how well he or she drives. This is more fair.

But, to cut costs, some insurance companies make more general assumptions about the likelihood of losses. Instead of personalising the risk assessment, they focus the assessment on generalities. The most common is the use of the zip code. In some areas of a town or city, there are higher levels of vehicle theft and vandalism. Some areas have more people driving while intoxicated or impaired through drugs. Because of the design of the local road system, there may also be a higher number of accidents. The insurers therefore charge everyone living in those areas a higher premium. Apart from the unfairness at an individual level, some lawyers believe it is active discrimination because many of the zip code areas loaded with higher premiums have higher concentrations of particular racial or ethnic groups. California has formally prohibited insurance companies from using zip codes, credit scores and other factors not directly relevant to the assessment of driver safety. In those states, insurers continue to trade and make a profit. It has not been the end of the world they predicted.

So, depending on the US state in which you live, your premium may either be calculated based on your personal driving record, or it may be based on your zip code and credit score. Either way, the task of finding the cheapest car insurance remains the same. You have to shop around the companies licensed to sell policies in your state and find the best deal. If there is active competition between the insurers, the premiums will be lower and you will find the cheapest car insurance without too much difficulty. But if the state is unregulated and insurers do not compete, it will be more difficult to find a cheap policy.

Ditulis Sepeda �� Pada 6:01 AM

Lotus, Malaysian-owned Car Racing

Lotus, Malaysian-owned Car Racing

Automotive

Mid this month, Lotus launched the T127 Series race car. The launch is the beginning of the return of British car manufacturers in Formula 1 that after 16 years absence. Seven times champion car construction categories and six drivers took the title in the series Grand Prix Formula 1 Lotus year marks the triumph of 1958-1994. Not surprisingly long history of nostalgia for the old Lotus always mentioned in the launch of this Costworth engined car in London.

But the difference now. Lotus once owned by the late Colin Chapman, now owned by Malaysian-led consortium of young entrepreneurs owner cheap airline Air Asia, Tony Fernandes.

According to Fernandes, this is a government project to promote the Malaysian car manufacturer Proton countries which also owns the Lotus car company. However, Fernandes did not confirm the team's headquarters will move from Norfolk, England, to Malaysia in the near future.

Lotus F1 history began after taking over a proposal to Formula 1 is rejected by the FIA, and the Malaysian team had become one of the new Formula 1 team in just five months, since September 2009. "I am very proud to be here, could show the world the fruits of hard work the team for five months," Fernandes said in a statement, Wednesday, February 17, 2010.

Lotus Technical Director, Mike Gascoyne, said, launching his car has a personal meaning for him. "Return of the Lotus name to Formula 1 is very special. I went to school not far from the old Lotus factory. I grew up in an era when Lotus was always winning the Grand Prix and the Formula 1 championship," Gascoyne said at the launch of Lotus T127.

Ditulis Sepeda �� Pada 2:25 PM