Financial Liability

• If you cause an accident and don't have liability insurance, you may be responsible for some very high payments. Other drivers and property owners can take you to court to seek payment for property damage, including repair or replacement of the vehicles you hit. The injury or death of another motorist or pedestrian can subject you to even more expenses, as well as criminal charges. If you're involved in a one-car accident you can still be responsible for paying for the damage you cause to public roads, utility poles, mailboxes and landscaping.
  
  

Fines

• Most states require some level of liability insurance for all vehicles on the road. If the police officer who responds to the scene of your accident discover that you don't have liability insurance, he can issue a ticked for failure to have proof of insurance or operating an improperly insured vehicle. Specific criminal definitions and fines vary from state to state, but fines upward of $100 are not uncommon.
  
  

License Suspension

• Many states also punish uninsured drivers who cause accidents with license suspensions, or points that count against a driver's record. For example, in the state of Missouri a driver who causes an accident and can't show proof of liability insurance will receive four points against her license. Once a Missouri driver reaches eight points within an 18-month time frame, her license is revoked. States may also order supervision, which means that the state actively monitors the driver's insurance purchases to ensure adequate coverage.
  
  

Exceptions

• Some states don't require liability insurance as a prerequisite for driving on public roads. However, these states still require all drivers to have some form of proof of financial responsibility. Check with your state's department of motor vehicles to see if you can arrange for a certificate of deposit or surety bond that will cover the cost of damage you cause in an accident. If you have proper proof of responsibility in lieu of liability insurance, you can avoid fines but may still be responsible for paying for damage that exceeds the value of your bond or deposit.