If you don’t carry state-mandated minimum car insurance requirements, you could face stiff penalties even if you weren’t at fault for the car crash. Here’s all you need to know
Driving without valid car insurance can attract stiff penalties in most states. However, if you crash a car without car insurance, the consequences can be even more severe than they already are. Let’s take a look at the penalties you could face under different circumstances.
Crashing a car without auto insurance in a no-fault state
Currently, at least 12 states have adopted what is known as a “no-fault” car insurance system. In a no-fault state, the injured party HAS to seek compensation from their own car insurance policy no matter who was at fault for the car crash. There’s very limited scope for the injured party to file a lawsuit against the at-fault driver in a no-fault state.
Depending on state laws, the injured party can only file a lawsuit if a court deems the injuries “severe” or “substantial” or when their medical bills exceed a certain amount.
Thus, one could say that the at-fault driver is unlikely to be named as a defendant in a lawsuit. Furthermore, the injured party cannot directly seek compensation from the at-fault driver, which is you.
However, if a lawsuit does get filed against you, you will have to pay for damages or injuries you caused as an uninsured driver out of your own pocket. In some cases, you will also need to hire an attorney at your own expense if you do not choose to try to defend yourself in court.
When faced with these lawsuits, telling the court, “I can’t pay that amount” is not a valid argument. If you are found accountable after a trial and asked to compensate the other motorist for their losses, the court will judge against you.
Know more about no-fault insurance and how it works here.
Crashing a car without car insurance in a tort state
States that do not follow the “no-fault” insurance system — which includes most states — are referred to as “tort” states. The laws in these states state that if you are at fault in a car accident and another person is hurt, that injured person has the right to sue you for all of the damages they experienced due to the car crash. That means you could end up paying their medical bills, lost wages, property damage, as well as compensation for physical and mental agony caused by the car crash.
If you do not have a liability insurance policy, you will be held liable for covering the cost of damages to the affected party. To put it in simpler terms, you will be required to pay them out of your own pocket. The other driver has various options available to them if the case goes to trial and the court pronounces a judgment against you.
What does liability car insurance cover? Find the answer here.
What if the other driver was at fault for the car accident?
If you were wounded in a car accident that the other motorist caused, there are certain limitations on what you can collect from that driver if you do not have your car insurance.
Several states have enacted a policy known as “No Pay, No Play.” If you were driving without valid car insurance at the time of the accident, the compensation you can collect for your injuries might be limited. For example, you will not be able to obtain compensation for pain and suffering, but you could recover compensation for your medical expenses.
“No Pay, No Play” is practiced in Alaska, California, Kansas, Louisiana, Iowa, Michigan, New Jersey, Oregon, Oklahoma, and North Dakota.
Read: How to change your car insurance when you shift states
What are the penalties for driving without car insurance?
If you are involved in a car accident without valid insurance, several jurisdictions will impose criminal or administrative fines against you. Almost every state will fine you hundreds or even thousands of dollars if you violate their laws. Most states will also impose penalties, which may include the suspension or revocation of your driver’s license. Click on the state below to know more about the penalties for driving without car insurance:
- Florida
- Georgia
- New York
- South Carolina
- North Carolina
- Texas
- Utah
- Indiana
- Arizona
- Pennsylvania
- Maryland
- Connecticut
- Hawaii
- West Virginia
- Louisiana
- Missouri
- New Mexico
- Rhode Island
- Delaware
What if I had insurance but no proof?
If you cause an accident but have proof of insurance, your penalties could be less severe. However, we recommend keeping proof of insurance (policy ID card) along with other documents such as your registration and driver’s license on you at all times. To know more about the documents you MUST have in your car at all times, head here.
What if the accident wasn’t my fault? How do I prove it?
If you’re in a car crash that wasn’t your fault, the first thing you should do is gather evidence and witnesses. If not, the insurance company may try to blame you and deny your claim. Here are some of the steps you must take after an accident:
- Call the cops: Having the cops file a report and take pictures of the scene can help you afterward.
- Take photographs: Take pictures of the scene of the accident. You can later use the photos to prove that you are not at blame.
- Gather information from witnesses: Gather contact information and statements from witnesses before they leave the accident scene.
- Gather information from the other driver: You’ll need it to file your claim.
What happens if I don’t have insurance and total my financed car?
It’s bad enough to total your car without insurance, but it’s worse if you financed it. If your car is totaled and you still owe on loan, you will be responsible for the remaining sum. If this occurs while you are uninsured, you will be responsible for the loan’s remaining balance.
Although situations vary at this time, some lenders may want full payment right away. Others will assist you in setting up a payment plan, which you must adhere to, or risk losing your license and having it reported to credit bureaus. Hence, it’s always better to have some level of car insurance coverage.
Read: How to refinance your car loan?
How to find affordable car insurance
Your location, driving history, and the brand and model of your car are all factors used by insurance providers to determine your car insurance premiums. However, some of these factors (such as a lapse in coverage) can significantly increase your premiums, making it difficult to get affordable auto insurance. When shopping for the cheapest car insurance policy, you should consider the following factors:
- Compare quotes from several car insurance companies to find the best deals.
- Look for discounts, such as rebates for going paperless or driving a vehicle with approved safety features.
- Maintain a spotless driving record.
- Increase your deductible.
If you are looking for the best car insurance rates in your state, tap the banner above to use our car insurance tool. Our dedicated team of insurance analysts can help you obtain car insurance quotes from several insurance firms in under 10 minutes! What’s more, we keep your data protected while you get multiple quotes without affecting your credit score.
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