What Happens If You Have a Car Accident Without Insurance?
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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.
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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 car insurance rates when they shop for a policy.
What you have to pay after an accident with no insurance
If you cause the accident
In most states, if you cause an accident, your insurance company pays for the damage and injury costs of victims. If you have no insurance, the victims might sue you.
The process is different if a state is considered a “no-fault” insurance state. In these states, drivers make claims through their own insurance for minor injuries, no matter who caused the crash. This means other people may not be able to sue you for medical costs unless the injuries are severe or the tab reaches a significant amount.
Each state sets its own rules for the situations in which legal action is allowed.
If someone else causes the accident
Those with no insurance may be limited in what they can sue the at-fault driver for, depending on the state.
If you live in a state with “no pay, no play” laws, uninsured drivers are prevented from suing for damages that can’t be quantified with a dollar amount. These include physical pain, emotional distress and mental suffering.
Uninsured motorists in “no pay, no play” states also may have to pay a massive deductible toward repairs before they can sue for property damage costs. For example, in Louisiana if an uninsured driver gets in a car accident and isn’t at fault, they can’t collect the first $25,000 in property damage and the first $15,000 in personal injuries.
States with “no pay, no play” laws are:
Alaska.
California.
Indiana.
Iowa.
Kansas.
Louisiana.
Michigan.
Missouri.
North Dakota.
New Jersey.
Oregon.
Car insurance is usually required
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.
For instance, Alaska doesn’t require insurance in places where registering your car is optional; people in other parts of the state do need coverage.
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Easily compare personalized rates to see how much switching car insurance could save you.
Penalties for getting caught without insurance
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.
If you have insurance, but no proof
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.
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