What Happens If You Have a Car Accident Without Insurance?

Depending on where you live, you could face fines, lose your driver's license or even spend time behind bars.
NerdWalletJun 15, 2017

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Driving without insurance is illegal in most states. You could face penalties such as fines, loss of your driver’s license and car registration, and even jail time, depending on the state.

If you cause an accident without insurance, you’ll have to pay for all the damage to your vehicle out of your pocket. You could also be sued by other people for damage and injuries you caused them.

Even if you buy car insurance the next day, that policy would apply only to accidents that happen after you buy it.

The outlook is slightly better if someone else hits you, since the driver who’s at fault typically is responsible for damage in a car accident. But state laws may limit what kind of expenses you can recoup if you were driving without insurance in that case.

Uninsured drivers also will have trouble finding cheap  when they shop for a policy.

Almost every state requires drivers to prove they can take financial responsibility if they cause a crash. That often means buying car insurance, although some states allow a bond or cash deposit.

Alaska and New Hampshire are special cases. Alaska doesn’t require insurance in places where registering your car is optional; people in other parts of the state do need coverage. New Hampshire doesn’t mandate auto insurance for residents with clean driving records and only requires proof of financial responsibility after a crash.

» MORE:

Whether you cause a car accident or not, if you’re caught driving without insurance or other proof of financial responsibility, you could face a wide range of consequences.

For example, first-time offenders in Texas face a fine of at least $175. But in Minnesota, the same offense could carry a fine of up to $1,000, up to 90 days in jail and loss of your license and registration.

Check out this compiled by the Consumer Federation of America for a state-by-state breakdown.

You should keep proof of insurance, such as the policy ID card, in your vehicle. Some states allow you to show proof of insurance on your smartphone.

If you cause an accident but have no proof of insurance, it’s less serious than being uninsured. You may get a citation but could potentially get it dismissed by showing proof of insurance in court.

We analyzed rates for drivers in California, Illinois and Texas who had caused an accident and were uninsured. We compared those rates with prices for drivers with clean records.

Rates for drivers who crashed without proof of insurance were significantly higher than rates for good drivers. To a lesser degree, they were also higher than the rates for insured drivers who had caused an accident.

Methodology

Rates for good drivers: NerdWallet averaged the three cheapest rates across 10 ZIP codes per state. We analyzed rates for 30-year-old men and women carrying the following coverage limits:

Rates for drivers with an at-fault crash: We averaged the three cheapest rates for the same drivers as above, but added an at-fault crash resulting in at least $2,000 property damage.

Rates for drivers who crash without proof of insurance: We averaged the three cheapest rates for the same drivers that caused a crash, but also added a violation from the same date for failing to show proof of insurance.

We used a 2013 Toyota Camry in all cases. These are sample rates generated through Quadrant Information Services. Your own rates will be different.

On a similar note...
Dive even deeper in Insurance