Final answer:
Driving without liability insurance in Virginia results in a $500 fine, license suspension, and potentially higher insurance premiums. An example shows that with 100 drivers sharing costs, each pays a $1,860 premium to cover total damages of $186,000. Maintaining insurance is also important to ensure a fair distribution of costs based on risk assessment.
Step-by-step explanation:
If you drive in Virginia without liability insurance coverage on your vehicle, you face several penalties. The consequences include a $500 fine, suspension of your driver's license, and potentially higher insurance premiums. Insurance companies determine premiums based on various factors including driving history and previous insurance coverage. Lack of insurance can lead companies to view you as a higher risk, thus increasing your premiums.
Using a simplified example of how car insurance works, consider a group of 100 drivers. If each driver pays a $1,860 premium each year, the total collected by the insurance company will amount to $186,000. This figure is necessary to cover the anticipated costs of the accidents across the group for that year. Those who drive without insurance not only face penalties but also affect the risk pool, potentially shifting costs to insured drivers. Actual insurance calculations involve risk assessment where companies charge lower premiums to those deemed lower risk. If risks are not individualized, lower-risk drivers may end up subsidizing the costs of higher-risk drivers. Therefore, maintaining insurance not only follows legal requirements but also supports a fair distribution of costs among drivers.