More drivers are skipping insurance: About 35% of drivers say they've driven uninsured in the past year because they couldn't afford coverage.
The risk can be huge: One at-fault accident could leave you paying for repairs, medical bills, legal costs, and fines out of pocket.
Look for savings elsewhere: Compare rates, ask for discounts, and adjust deductibles before dropping coverage altogether.
As auto insurance premiums continue climbing, some Americans are making a dangerous financial decision: driving without insurance.
A new survey from CoverageProfessor found that 35% of drivers admit they have driven without insurance at some point during the past year because of financial pressure. Meanwhile, 56% say they delayed renewals or missed payments, and 58% of uninsured drivers say they canceled coverage altogether because they simply couldn't afford it.
While skipping coverage may seem like an easy way to cut costs, the financial consequences can be devastating if you're involved in an accident.
Why uninsured driving can backfire
Many drivers try to justify the risk. According to the survey, 27% of uninsured motorists say they only drive short distances or stick to familiar roads, believing that reduces their chances of getting into an accident.
Unfortunately, accidents don't care whether you're driving across the country or just heading to the grocery store.
If you're found at fault in a crash while uninsured, you could be responsible for:
Vehicle repairs
Medical bills
Lost wages
Legal costs
Property damage
In some states, drivers can also face license suspensions, vehicle impoundment, fines, and other penalties.
Even a minor fender-bender can end up costing you thousands of dollars. Which as it turns out is far more than a year's worth of insurance premiums.
Why rates keep rising
Insurance companies point to several factors driving premiums higher, including more expensive vehicle repairs, higher labor costs, increased medical expenses, and more distracted driving accidents.
The result is that many households are struggling to fit insurance into already stretched budgets. In fact, the survey found that 34% of drivers have taken on a side hustle or second job to help pay for coverage.
If your rates have jumped recently, there are several ways to reduce costs without going uninsured.
Shop around every year
Many drivers stay with the same insurer for years without comparing rates. That can be a costly mistake.
Rates vary dramatically between companies, even for identical drivers. Getting quotes from three to five insurers can sometimes save hundreds of dollars annually.
Pro tip: Don't wait until your policy expires. Start comparison shopping 30 days before renewal to give yourself time to switch if necessary.
Raise your deductible
If you have adequate emergency savings, increasing your deductible can significantly lower premiums.
For example, moving from a $500 deductible to $1,000 often reduces monthly costs. Just make sure you can comfortably cover the higher deductible if you need to file a claim.
Ask about possible discounts
Many consumers never request available discounts.
Common savings opportunities include:
Safe-driver discounts
Multi-policy discounts
Low-mileage discounts
Good-student discounts
Defensive driving course discounts
Automatic payment discounts
Paperless billing discounts
Pro tip: Call your insurer once a year and specifically ask for every discount you qualify for. New programs are added regularly.
Consider usage-based insurance
Many insurers now offer telematics programs that track driving habits through a smartphone app or plug-in device.
Safe drivers who avoid hard braking, speeding, and late-night driving can often earn meaningful discounts. These programs aren't ideal for everyone, but they can be especially valuable for your low-mileage drivers.
Review your coverage on older vehicles
If your car is worth only a few thousand dollars, it may make sense to evaluate whether comprehensive and collision coverage are still cost-effective.
Dropping optional coverage can lower your premiums, though drivers should carefully weigh the potential out-of-pocket risk.
Pro tip: Before dropping coverage, compare the annual premium cost against the vehicle's actual cash value. The math just might surprise you.