What Happens When You’re in a Car Accident With No Insurance

You must have proof of financial responsibility before you can legally operate a motor vehicle in most states. Driving without car insurance carries steep penalties including traffic tickets, hefty fines, and even license suspension. The burden gets even worse if you’re involved in an accident without car insurance — regardless of fault for the crash. Be prepared to pay out-of-pocket for damages you cause. You could even face restrictions on how much compensation you’re entitled to if another driver causes the accident.

Before you can legally operate your vehicle on public roadways, most states require you purchase minimum liability car insurance. In some states, you can meet financial responsibility requirements with a surety bond or other financial document.

Failing to maintain car insurance brings big consequences, and they’re only exacerbated when you’re involved in an accident. Of course, your exact consequences depend largely on your state’s laws, but they also depend on who caused the accident and which driver is uninsured. Regardless, one thing you can be sure of is it’s going to be messy.

>>MORE: Disability Insurance: Why You May Need It in a Car Accident

Penalties for Driving With No Car Insurance

States impose a range of penalties for driving with no car insurance including, but not limited to:

  • Traffic ticket.
  • Steep fines. Often, it’s cheaper to buy an auto insurance policy than pay the fines for not carrying coverage. (See chart below.)
  • License suspension.
  • Vehicle towed, which also comes with impound costs.
  • Driving record points.

These penalties are on top of any property damage and bodily harm costs.

>>MORE: How To Get A New Car After A Total Loss Accident?

Which Driver Doesn’t Have Car Insurance?

How you handle a car accident with no insurance depends on which driver is uninsured: you or the other driver.

You Have No Car Insurance

It is highly unlikely to get a new car insurance company to pay for a previous car accident. If you’re involved in an accident with no insurance, you can’t buy a policy to cover the accident.

>>MORE: What Does Health Insurance Cover in Car Accidents?

When You Cause the Accident And Live In a Fault State

The majority of states are “fault states”. If you caused the accident, and you don’t have insurance, you are financially responsible for your own property and bodily damage, but also the other driver’s property and bodily damage.

Don’t have enough funds to easily write a check to cover the other person’s auto repairs and hospital bills? The other driver could sue you for those costs as well as costs to cover missed work, continuing rehabilitation, and even emotional pain and suffering.

When You Cause the Accident and You Live in a No Fault State

Regardless of who causes the accident, drivers in no-fault insurance states make claims through their own insurance companies for minor injuries.
They include: Arkansas, Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, and Utah. Each state sets its own rules for when legal action can be taken. Generally the at-fault driver can’t be sued unless the injuries are significant and/or the costs reach a certain amount.

When The Other Driver Causes the Accident

Now, if the other driver caused the accident and you don’t have car insurance, you’ll still be in trouble — no-fault state or not — because you’re driving without auto insurance. What this means is:

The police and your state’s motor vehicle agency will find out; it won’t be a secret. So while you might not be responsible for the other driver’s damages, you will face other consequences such as a traffic ticket, fine, license suspension, and driving record points all for not having coverage.

There will be limits on the financial compensation you’re entitled to if you’re uninsured and live in a “no pay, no play” state.

What is a “No Pay, No Play” State?

In a “no pay, no play” state, if you get injured by another driver and you don’t have car insurance, you cannot sue for damages that don’t have a quantitative dollar amount such as emotional distress, mental suffering, and physical pain. Some “no pay, no play” states require a large deductible before you can sue for property damages; Louisiana requires a $25,000 deductible.

These “no pay, no play” states include: Alaska, California, Indiana, Iowa, Kansas, Louisiana, Michigan, Missouri, North Dakota, New Jersey, Oklahoma, Oregon.

>>MORE: What Is Accident Forgiveness, Should You Get It and Who Offers It?

Other Driver Has No Car Insurance

When you’re at fault for an accident and the other driver doesn’t have car insurance, there isn’t much you can do. Your state’s motor vehicle agency will handle the driver without insurance, but you’re still responsible for the property and bodily damages you caused (unless you live in a no-fault state). Of course, if you live in a “no pay, no play” state, be aware of the financial limits the other driver is entitled to.

When the other driver is both uninsured and at fault for the accident, you have a few options. You can:

  • Tap into your own car insurance policy’s Uninsured Motorist Property Damage Insurance (UMPD) and Uninsured Motorist Bodily Injury Insurance (UMBI). These coverages protect you when the other driver is uninsured or underinsured, and most states require them as part of their minimum liability car insurance requirements.
  • Take the other driver to court. Check your state’s statutes of limitations; if you wait too long, you won’t be entitled to anything.

States That Monitor & Penalize Uninsured Drivers

If you’re driving without car insurance or proof of another acceptable of financial responsibility, you might not have to wait until you’re in an accident to get in trouble. Many states actively monitor their registered drivers’ auto insurance status, and all states penalize uninsured drivers with fines, licenses suspension, or both.

StateMonitoringFines & License Suspension
AlabamaPassiveUp to $1,000
AlaskaPassive$500/License suspension
ArizonaActiveUp to $1,000/License suspension
ArkansasActiveUp to $250
CaliforniaActiveUp to $200/License suspension
ColoradoActive$500/License suspension
ConnecticutActiveUp to $200/License suspension
DelawarePassive*Up to $3000/License suspension
FloridaActiveUp to $500/License suspension
GeorgiaActiveUp to $185/License suspension
HawaiiPassiveUp to $5000/License suspension
IdahoPassiveUp to $1000/License suspension
IllinoisPassive*Up to $1000/License suspension
IndianaPassiveUp to $1000/License suspension
IowaPassive$250/License suspension
KansasPassiveUp to $2500/License suspension
KentuckyActive$1000/License suspension
LouisianaPassive***Up to $700
MainePassiveUp to $500/License suspension
MarylandActiveUp to $2500
MassachusettsPassiveUp to $5000/License suspension
MichiganPassiveUp to $500/License suspension
MinnesotaPassiveUp to $3000/License suspension
MississippiPassive**$500/License suspension
MissouriPassive*$500/License suspension
MontanaPassiveUp to $500/License suspension
NebraskaPassive$50/License suspension
NevadaActiveUp to $1000/License suspension
New HampshirePassiveLicense suspension only if you’re in an accident.
New JerseyActiveUp to $5000/License suspension
New MexicoActiveUp to $1000
New YorkActiveUp to $1500/License suspension
North CarolinaActiveUp to $150/License suspension
North DakotaPassiveUp to $5000/License suspension
OhioPassive*Up to $660/License suspension
OklahomaActive$250/License suspension
OregonPassive*Up to $1000/License suspension
PennsylvaniaActive$300/License suspension
Rhode IslandPassive*Up to $1000/License suspension
South CarolinaActiveUp to $550/License suspension
South DakotaPassiveUp to $500/License suspension
TennesseeActiveUp to $300/License suspension
TexasActiveUp to $4000/License suspension
UtahActiveUp to $1000/License suspension
VermontPassiveUp to $500/License suspension
VirginiaActive$500/License suspension
WashingtonPassiveUp to $1000/License suspension
West VirginiaActiveUp to $5000/License suspension
WisconsinPassive$510/License suspension
WyomingPassiveUp to $1500/License suspension

*This state randomly audit registered vehicles.
**New legislation could create a database of insured vehicle to actively monitor.
***This state restricts an uninsured driver’s right to compensation, regardless of who’s at fault for the accident.

Getting Car Insurance After An Accident

Understand that getting affordable car insurance after an accident while uninsured isn’t going to be easy. Take a look at this comparison on the cheapest car insurance by provider.

Every insurance company you shop with is going to look at the penalties you incurred — traffic tickets, license suspension, the fact that you weren’t insured and illegally driving — and hold those penalties against you when determining whether to insure you and the cost of your premiums.
However, there are still plenty of ways to get the lowest car insurance policy possible in this situation. Get started by shopping online, which is the fastest way to get quotes from multiple providers.

>>MORE: How Much Will My Insurance Go Up After An Accident?

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