What Happens If You Have No Insurance and Get Into a Car Accident?
Car insurance is one of the critical aspects of owning a vehicle in the U.S. With the cover, which will depend on the type of vehicle, you are protected against liability damages in case of an accident.
On top of that, you are complying with the law by getting insurance coverage for your car. In fact, it is illegal to drive without insurance in nearly every state in the U.S. Still, according to data from the Insurance Research Council, an estimated 12.6 percent of US drivers are uninsured.
So what happens if you get into a crash in an uninsured vehicle? The outcome will depend on several factors, such as the nature of the accident and your state. Read on to find out.
Car Insurance Laws in the U.S.
Every state except New Hampshire and Virginia requires motorists to carry minimum liability insurance. Virginia drivers can drive without coverage if they pay an uninsured motorist fee.
In addition, most states require motorists to purchase liability coverage for bodily harm and property damage. Others need drivers to purchase additional coverages such as personal injury protection and underinsured motorist coverage.
That said, drivers who ignore these regulations and drive without insurance are subject to legal and financial consequences. The penalty for such offenses will depend on a myriad of factors, including the law in that particular state, the driver’s record, and how the accident occurred.
Below are a few of the possible consequences:
- Vehicle impound
- Driver license suspension
- Criminal charges
- Fine and/or jail time
Let us look at the different outcomes depending on the at-fault party and the state.
If You Reside in a State that Requires Car Insurance and You Are at Fault
The financial and/or legal implications will mostly depend on the state where the accident occurred. That said, while there are multiple ways in which states govern their insurance sector, below are the two most common systems states use:
No-Fault State
In such states, drivers pay for their own vehicle damage and even medical bills (sometimes) regardless of who caused the accident. Here, drivers must carry personal injury protection or risk settling the costs themselves.
The other driver may file a lawsuit against you for damages not covered under personal injury protection, such as pain and suffering. In such cases, the no-fault state will set the payment grounds.
Tort/At-fault State
In these states, the other driver can sue you for damages. If you lack the funds to settle the claim, a judge can use your assets or future income to pay.
If You Reside in a State that Requires Insurance and You Are Not At Fault
It would be best to consult your state’s Department of Motor Vehicles (DMV) on whether you can recover damages from the at-fault party. This is because some states have adopted the “No pay/No play” policy that restricts or limits the amount of damages an uninsured driver is entitled to recover, even if the accident was not their fault.
Below are the states with these kinds of insurance laws
- Alaska
- California
- Indiana
- Iowa
- Kansas
- Louisiana
- Michigan
- Missouri
- New Jersey
- North Dakota
- Oregon
If You Reside in a State that Does Not Require Insurance and You Are At Fault
New Hampshire and Virginia are the only states where drivers are not required to carry minimum liability insurance.
Say you live in New Hampshire and cause an accident without insurance. You must pay for all damages, including bodily harm and property damage. Sometimes, you may be required to provide proof of sufficient funds.
On top of that, you may be required to purchase insurance for three years after the accident.
In Virginia, you can pay a $500 Uninsured Motor Vehicle fee at registration and at each registration interval. Still, if you cause an accident, you must pay for all damages, including bodily injury and property damage.
If You Live in a State That Does Not Require Insurance and You Are Not At Fault
If you get into a car accident in New Hampshire and Virginia and are not at fault, you can obtain damages from the driver, if they are uninsured, or from their provider, if they are insured.
Parting Words
“If you are ever involved in an accident in an uninsured vehicle, the best course of action would be to contact your attorney. The penalties will vary depending on your state of residence, but your attorney can guide you through it,” says injury attorney Megan Burns.
Also Read: How to Choose the Right Tenant Insurance Coverage for You
