UPDATED: Mar 13, 2020
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Getting into an accident can be frightening – but getting into an accident without car insurance can be even worse.
What happens if you get into an accident without insurance? Today, we’re explaining everything you need to know about encountering this worst-case scenario.
First, driving without insurance is illegal in most states. If you are caught driving without insurance, then you will most likely face at least a fine. In certain states, you could lose your license and registration, have your vehicle impounded, or even go to jail.
Those are the penalties for getting caught just driving without insurance. So what happens if you cause an accident without insurance?
If You Caused the Accident, You Must Pay All Damages Out of Pocket
Let’s assume you’re an uninsured driver and you caused an accident. You were speeding. You ran a red light. You failed to signal. You were on your phone. Regardless of what happened, you’re considered at-fault for the accident.
In this situation, you will need to pay for all damage to your vehicle out of your own pocket. You could also be sued by other people for any losses and injuries you caused to them.
If your actions injured a pedestrian, for example, then you might have to pay for that person’s medical bills and lost wages. If you injured the other driver and passengers, then they could sue you for vehicle damage repairs, medical expenses, pain and suffering, and more.
Depending on the extent of damage and injuries, this could add up to hundreds of thousands or even millions of dollars. If you collide at high speed with a minivan filled with a family, for example, then you could be on the hook for considerable medical bills.
Typically, your car insurance would cover all of these things. People buy car insurance because it covers their personal liability: when you cause an accident, you’re liable for all the damages you caused. Those damages are your fault, and you are required to pay for them. That’s why you pay for car insurance: the car insurance company has agreed to take on your liability, and you’re paying them to absorb that risk
When you don’t have car insurance, of course, that liability rests entirely on you. You are now personally liable for the accident and all resulting damages. You are personally required to pay for those damages.
If You Live a No-Fault State, You Might Not Be Required to Pay Certain Medical Expenses
Most states in America are at-fault states. In these states, the at-fault driver’s insurance company covers all of the expenses related to the accident.
Twelve states in America, however, are considered no-fault states, including Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.
In these states, drivers make claims through their own insurance for minor injuries regardless of fault. Even if you blatantly caused the crash, the other driver will make a claim through his personal insurance to cover his own medical bills.
In no-fault states, the other driver may not be able to sue you for medical costs unless the injuries are severe or the total reaches a significant amount.
This can significantly lower your liability after an accident. However, you will still be required to pay for any property damage repair costs and certain other expenses (assuming you’re the at-fault driver).
Each state has its own rules governing what happens when an uninsured driver causes an accident.
What Happens If I’m in a State with No Car Insurance Requirements?
Technically, driving without car insurance in these states isn’t illegal. However, the at-fault driver is still financially responsible for any property damage or injuries caused.
If you were the at-fault driver in the accident and you don’t have insurance, then you’ll pay out of pocket for any damage or injuries you caused.
If the other driver was at-fault, then you can file a third-party claim with the other driver’s insurance company to cover your vehicle damage and injuries, among additional costs.
What Happens If Someone Else Caused the Accident and I Have No Insurance?
Let’s say someone else caused the accident and you have no insurance. In this case, rules vary between states.
In most states, the situation is treated like a normal accident. The at-fault driver is liable for all damages from the accident. Even if you don’t have insurance, you can sue the at-fault driver for car repair damages, medical bills, lost wages, pain and suffering, and other costs. There are no restrictions on what the uninsured driver can and cannot claim.
Some states, however, have “no pay, no play” laws. Under these laws, uninsured motorists cannot claim certain damages after an accident, even if the other driver was at fault. You did not “pay” for car insurance, so you cannot “play” for compensation after an accident.
In “no pay, no play” states, uninsured drivers cannot sue for damages that cannot be quantified by a dollar amount. That means you cannot sue for physical pain, emotional distress, and mental suffering. Even in these states, however, the uninsured driver can still sue for quantifiable things like vehicle damage, medical bills, and lost wages.
Additionally, “no pay, no play” states may require drivers to pay a large deductible before they can sue the other driver for property damage costs. Drivers in Louisiana, for example, must pay $25,000 towards repairs themselves before suing the other driver for property damage costs.
States with “no pay, no play” laws include Alaska, California, Indiana, Iowa, Kansas, Louisiana, Michigan, Missouri, North Dakota, New Jersey, Oklahoma, and Oregon.
Getting Into an Accident with No Insurance Will Cause Insurance Premiums to Rise
Any time you get into an accident with no insurance, you can expect car insurance premiums to rise.
Driving without insurance is risky behavior. When a car insurance company sees that you were caught driving without insurance, they may double your premiums. If an insurance company sees you caused an accident while driving without insurance, they might raise premiums even higher.
Some people drive without insurance all the time. Others just accidentally let their car insurance lapse. Unfortunately, car insurance companies may charge the same high premiums to both drivers.
Typically, safe drivers drive with insurance. Insurance companies like to insure safe drivers. Unsafe, risky drivers drive without insurance. In the eyes of the insurance company, someone who drove without insurance in the past is more likely to make a claim in the future. They’ve exhibited risky behavior in the past, and they’re more likely to exhibit risky behavior in the future.
Driving without insurance is illegal in most states. Getting into an accident without insurance, however, can be financially devastating.
As the at-fault driver, you may be personally liable for any damages and medical expenses incurred in the accident. Even if you’re not at fault, you may run into problems with “no pay, no play” laws, which prevent uninsured drivers from suing insured drivers for certain damages after an accident regardless of fault.
Consider speaking with an attorney who specializes in car accident claims. Or, compare car insurance premiums today and get back on the road with insurance as quickly as possible.