What Happens If You Have a Car Accident Without Insurance?
It is estimated that car accidents account for more than 65% of all reported personal injuries worldwide. In fact, there is a section of lawyers who have decided to carve out a carrier by just specializing in handling personal injuries, of which car accidents are the largest supply of cases.
If you had a car accident, either you or the other driver will pay for the damages caused. The at-fault driver with no insurance, in addition to paying compensation (damages), will also pay punitive fees on top of numerous traffic penalties and fines.
For instance, Uk Data shows that, in the year 2020, it was estimated that more than 1,460 died in car accidents whereas 22,069 and 92,055 people sustained serious and minor injuries respectively. According to this source, it is estimated that in the USA more than 38,824 people died in car accidents in the year 2021.
I and you know that it is required by law to show proof of financial responsibility towards others before we go behind the wheel. The majority of the states in the USA require any driver to show this responsibility by purchasing car insurance coverage, whereas others offer alternatives like depositing cash or buying bonds.
According to money geek, it was estimated in the last year 2021 that at least 21 million drivers are uninsured in the USA. According to the same source, 1 in 8 motorists hit the roads uninsured. This is the very reason you should buy car insurance to protect yourself financially and also protect fellow drivers.
This post is a bit long and expands on what I already explained. I also answer numerous questions our readers ask us on this site. Go through the contents below and check out this question-answer narration.
Page Contents
What happens if you crash a financed car without insurance?
You are required by law to show that you are financially capable of settling any of your liabilities in case you caused an accident, irrespective of driving your own or financed car. Actually, there is no financial institution that will let your drive a financed car with no full coverage car insurance.
If you are the driver who did not renew the required insurance coverage after the first few years of the car loan, then you are in trouble with your company. You also risk your income and assets. What happens if you crash a financed car without insurance depends mainly on if you are the at-fault driver or not.
1. You are the at-fault driver. Some states are fault states while others subscribe to a no-fault system. Note that these 2 systems have variations which I already explained in previous articles. If you are the at-fault driver and live in a fault state, sorry for you! you will be forced to compensate the driver, and pay for personal injuries on top of paying your monthly installments towards your car loan.
The other driver whom you injured or caused car damages is entitled to so many damages like medical bills, lost present and future income/wages, lost potential to earn a living, pain and suffering, emotional damages, rehabilitation costs, and so many others, not forgetting repair costs for the damaged car. You need to pay all these costs unless you have insurance coverage.
2. You are not the at-fault driver. If you are not negligently responsible for the car accident, the responsible driver will pay all the above damages to you and to your loan company. With the help of the bank that financed your car and the car insurance coverage company, you will go after the other driver to compensate you financially.
What happens if you have an accident in a rental car without insurance?
Just like a financed car, you won’t be allowed to drive away from the car rental lot until you bought full coverage car insurance. Full coverage car insurance implies that you purchase policies like Liability insurance, collision coverage, comprehensive car insurance, and at times uninsured/underinsured motorist coverage.
What happens if you have an accident in a rental car without insurance is the same as what happens with a financed car. You still need to protect yourself financially and also protect others on the road. You also have the additional duty of protecting your car rental company’s prized assets.
Whatever happens to the rental car or financed car simply means you will incur the expenses out of your pockets unless you have the required coverages. In the USA, the average settlement for a car accident where there are no personal injuries is somewhere between $15,000 to $30,000. Be ready to fork out more than that amount especially if there are injuries and lots of property damage.
What to do after an accident that is your fault?
The steps you follow after a car accident that is your fault are the same as when you are not at fault. This is because whether you are at fault or not you still need your car repaired and your medical bills paid by your insurance coverage policies like Collision and comprehensive coverages.
Irrespective of being at fault for the car accident or not, please do the following after any car accident:
1. Stop And Stay safe. Safety is key and the first priority. Make sure you or any other person involved in the accident is safe.
2. Call the police and report the accident. In many states, it is required by law to report any car accident. Other states require reporting an accident only if there are injured or significant property damages. Do not leave the car accident scene before traffic officers arrived, or else you will be charged with a hit-and-run case.
3. Gather information. You are supposed to exchange personal information with another driver. Exchange names, addresses, contact numbers, car registration, license information, car insurance policy information, etc. Do not accept liability. Your insurance company or traffic police should iron out who of you is at fault for the accident.
4. Take pictures/videos. Take pictures of the accident scene, the vehicles still in contact, skid marks, neighboring signposts, buildings, any injuries, etc. Just snap up anything you think could act as evidence or help you argue out your case.
5. Inform your auto insurance company. Most insurance agents want you to report a car accident as soon as a crash occurs, or else you will find it hard to file your claim. Make sure you do not reveal any incriminating information to any insurance company because this could affect your settlement claims later.
What to do after a minor car accident?
It is always better to report a car accident irrespective of being severe or minor. This is because you want to get compensated later by either your insurance company or the other party. For instance, a police report about a car accident could help you prove you were not responsible for the accident.
Your minor personal injuries in that minor car accident could be entitled to damages like medical bills. Once more, what you think are minor injuries could aggravate to life-threatening days after the accident. You do not want the other party to think your injuries that showed up weeks or months later are due to another cause other than the accident you had weeks or months ago.
If you had any car accident, be minor or not, simply inform the police, inform your insurance company, and gather all necessary information and evidence like pictures or videos.
What happens if you get insurance after an accident?
The car insurance coverage you bought after the accident or on the very day you had an accident won’t help you at all. Insurance coverages usually take a certain period to be in force for instance after 1 month. In some instances, your coverage could be in force immediately after you finish all the documentation and paid the required premiums.
Your car insurance policy clearly states when your coverage will be in force or will start working. You should ask your auto insurance broker just in case. Your insurance coverage won’t protect you unless you finished clearing all the formalities as asked by your company.
What happens if the person at fault in an accident has no insurance?
The person who causes an accident is always liable for all the damages incurred by the innocent and careful party. Though you expect everyone to carry auto insurance, this is not always the case a reason everyone needs a backup. A person who can not afford insurance coverage usually has no money to compensate you.
Here is what happens if the person at fault in an accident has no insurance:
1. File a lawsuit against the at-fault party. Sometimes you only have an option of suing the at-fault person if you think the person has enough savings or property. If the person at fault decides to sell his property in a bid to escape paying damages, let your attorney know. The courts of law could prevent him from doing that.
2. File a claim from your Collision coverage. If your car was damaged during the accident, you could file a claim through this coverage. Collision insurance coverage only protects your car from collision damages. It won’t pay your medical bills.
3. Try your uninsured /underinsured motorist coverage. This is coverage that comes into play if you were involved in a hit-and-run car accident, or if the other driver has no or insufficient coverage to pay the damages you incurred.
4. Your PIP (personal injury protection). In no-fault states like Michigan and Florida, each driver involved in the accident claims through their own coverage up to the policy limit. You have no right to go after the other driver’s coverage unless your PIP limit is not enough to cover your medical bills. PIP does not cover costs to repair your car, but only covers personal injury bills.
If the driver at fault for the accident has no insurance coverage, the best option is to file a claim through your insurance coverage or file a personal injury lawsuit to force the at-fault party to pay from his pockets.
Borrowed car accident no insurance
Here are some of the possible things that could happen in situations of borrowed car accidents with no insurance.
1. Car insurance follows the car. In some states or districts like Washington and Merryland, car insurance follows the car but not the driver. In such places, the car’s coverage will protect your borrowed car. In such places, you need no own coverage to drive an insured car.
2. Car insurance follows the driver. In states like Florida and others, car insurance follows the car first and then the driver. This means that, if driver A borrows a car belonging to B, and driver A crashes it, then the insurance coverage belonging to B pays. If B has insufficient coverage, then A’s insurance coverage pays to top up the damages.
In states where car insurance follows the driver, using the above scenario of drivers A and B. Here car insurance coverage belonging to A pays the damages or else, driver A pays his out of his pocket.
In states where car insurance follows the car, also using the above scenario of drivers A and B, the insurance coverage for driver B pays the damages. Driver B will pay out of his pockets if he has no insurance coverage.
Note that some states and other insurance companies want you to list any potential drivers on your policy. The insurance company won’t pay a dime if a non-listed driver crashes your car. I advise you to ask your insurance agent for a proper explanation since traffic laws vary from one state to another.
What happens if someone hits you and they don’t have insurance?
This is almost a similar question I already answered earlier in this article. First of all, no person should suffer injuries and financial losses due to the negligence of another party. This is the reason you need to prove that you a capable of settling any liability you are held for during driving.
If someone hits you and he/she does not have insurance, then you have a right of filing a lawsuit against him for the losses you incurred. You also have an option of filing a claim against your collision, and or uninsured /underinsured coverage. You could also have the enforcement attach his property or future income to recover your damages.
How long can your license be suspended for accident without insurance?
Of course laws and traffic regulations vary from one state to another, or between different areas of jurisdiction. In the USA, some of the penalties you will receive for driving uninsured include; paying a fine, getting your car impounded, and at worst having your driving license suspended.
For example, an insured driver found driving in Missouri will have his license suspended for a year, pay a $500 fine, pay $400 before being reinstated, and he could also face jail time of about 15 days.
In California, a driver caught driving while uninsured pays $100 to $200 if caught for the first time, and also pays other fines and reinstatement fees. Committing the same offense again will require you to pay a fine between $200 to $500 plus other fees.
Getting insurance same day as accident
Your car insurance coverage should be in force soon after paying your premiums and signing all the required documentation. For instance, the coverage you bought one hour ago should protect you if you had an accident 1-2 hours later as long as you signed and it’s in force.
However, you will have a lot to prove. For instance, having an accident the same day you bought your car insurance policy will be investigated deeply by your insurance company because they will initially think you committed fraud. You will still need to prove the accident happened by following all the steps I earlier explained in this article.
Things could even go sour if you bought the coverage online today and had a car accident on the very day. This is because buying coverage online does not require the physical presence of your car. The company may think you hid the wrecked car and decided to buy the coverage.
Switching car insurance after accident
In my last articles, I already explained when and why car accident prices go higher and what to do to get cheaper car insurance rates. According to NerdWallet, your car insurance rates could increase by more than 51% a year if you caused an accident.
From a study done by ValuePenguin, it was found that on average, your car insurance rates will rise by more than 46% for any accident you caused that resulted in personal injuries.
Yes, you should switch your car insurance company once in a while if you think your company is charging you relatively higher rates. This is why you should always be on the lookout for cheaper prices. Many insurance companies do not value your royalty and instead charge longstanding customers highly.
Switching your insurance company after an accident is okay, but it won’t help a lot because the accident will be already tagged on your name. Some companies usually forgive you if it is your first accident while others simply hike your rates. I recommend you analyze more than 3 price quotations from different companies and choose what suits your insurance needs.
Some companies target specific markets. For instance, they are insurance companies that are good for younger drivers, female drivers, etc. Some companies have a higher degree of leniency with drivers with a poor driving history.
The simple survey I carried out on the car insurance facebook group showed that, Progressive and Geico offer the cheapest rates for drivers with a poor driving history. If you have a history of past accidents or claims and you are looking for fair rates, look no further than Geico and progressive insurance companies.
What happens if an unlicensed driver has an accident with my car?
Just like driving uninsured, driving unlicensed is also an offense, but of course, this depends on where you come from. What happens if an unlicensed has an accident with your car depends on many things. For instance;
- It is not required for the driver to be listed on your insurance policy, your insurance company will pay the damages.
- In states where insurance coverage first follows the car and then the driver, the claimant will get his compensation from both-sides insurance companies.
- Some insurance companies could deny you compensation because having a driver’s license is one of the requirements for buying car insurance. But, some insurance companies still sell coverage even if you are lot licensed driver.
- The driver caught driving without a valid license will probably earn himself penalties and or a driving ticket.
- There is also a likelihood for the unlicensed driver to be declared the at-fault driver. This is a reason why it is so risky to let an unlicensed person drive your car.
If someone borrows my car and gets in an accident am I liable?
In most cases yes, the owner of the car is liable for the injuries and car accident damages when it is being driven by someone else. For instance in Virginia, the car’s insurance coverage covers all expenses related to a car wreck even if it was being driven by someone else. This shows the owner of the car remains the responsible person.
A friend in the UK told me the same. The car’s insurance coverage meets all the costs related to the car accident but in retaliation, your coverage will most like be suspended or canceled in the united kingdom.
In states like Arizona, the owner of the car could be sued for negligently letting an unlicensed person drive the car. As you can see guys, Accident related costs in most cases fall back to the owner of the car.
In summary. The answer to the question, what happens if you have a car accident without insurance? is that, it depends on so many circumstances. Getting involved in a car accident without insurance will land you in trouble where you will pay traffic fines, and fees and at the same time compensate the person you injured, or whose car you damaged.
