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.
Auto Insurance, 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.

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.

If you cause an accident without insurance, you’ll have to pay for all the damage to your vehicle out of your pocket. Others could also sue you.

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 in the 12 “no-fault” insurance 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 — that is $25,000 in Louisiana, for example.
States with “no pay, no play” laws are:
  • Alaska
  • California
  • Indiana
  • Iowa
  • Kansas
  • Louisiana
  • Michigan
  • Missouri
  • North Dakota
  • New Jersey
  • Oklahoma
  • 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.

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: States where you might not have to get car insurance

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.

Check out this list of penalties for driving without insurance compiled by the Consumer Federation of America for a state-by-state breakdown.

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.

An accident with no insurance hurts future rates

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.

Car insurance prices if you cause an accident without insurance
StateAverage rate for good driversAverage rate with one at-fault crashAverage rate with one at-fault crash and no proof of insurance
California$1,293 per year$2,016 per year$2,084 per year
Illinois$1,029 per year$1,389 per year$1,409 per year
Texas$1,429 per year$2,010 per year$2,092 per year

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:

  • $100,000 bodily injury liability coverage per person
  • $300,000 bodily injury liability coverage per accident
  • $50,000 property damage liability coverage per accident
  • $100,000 uninsured motorist coverage per person
  • $300,000 uninsured motorist coverage per crash
  • Collision and comprehensive with a $1,000 deductible
  • 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.