Uninsured and hit: Can you make a claim against someone else?
If you are an uninsured driver involved in a crash another driver caused, can you still make a claim?
The answer is maybe, says Peter Moraga, spokesperson for the Insurance Information Network of California. "It depends on the state you are in," he says. "In California, the state passed a law that if you are in an accident and don't have insurance, you cannot get compensated for pain and suffering." You can still make a claim against the other driver for medical bills.
That law is called "No Pay No Play." Its intent is to relieve at-fault drivers who comply with state insurance requirements from having to compensate uninsured drivers for non-economic damages.
"The reason the law was passed was that legislators felt people who don't follow the law should not be compensated for pain and suffering, as well as punitive damages," Moraga says. Punitive damages are damages awarded based on extreme negligence, faulty products or faulty maintenance.
"The reason for the law is that if you are breaking the law by driving without insurance, you should not be compensated," says Moraga
In addition to California, states with "No Pay No Play" laws are Alaska, Iowa, Kansas, Louisiana, Michigan, New Jersey, North Dakota, Oklahoma and Oregon.
Each of these states have variations in the law. In North Dakota, for instance, motorists found to be driving without insurance after a prior conviction for it are not allowed to recover non-economic damages, meaning those related to pain and suffering, mental anguish or loss of life enjoyment. But Louisiana places a cap on the law, stating uninsured motorists cannot collect the first $15,000 in bodily injury damages or the first $25,000 in property damages.
In the 40 states where "No Pay No Play" isn't in effect, whether uninsured drivers are compensated depends on the outcome of lawsuits. "Based on the state's tort law, the uninsured driver might or might not be eligible for compensation," Moraga says. "That can include medical, pain and suffering and punitive.
"It's a real complicated area."
Tickets for being uninsured
Uninsured drivers involved in crashes caused by insured drivers will likely be ticketed at the scene, says Jann Samarzja, auto lines product senior specialist with American Family Insurance in Madison, Wis. If the uninsured driver is injured and requires hospitalization, the ticketing officer may show mercy and delay the ticket's issuance until the following day, she adds.
The cost of the ticket will probably be just the start of expenses the uninsured driver will incur, Moraga reports. His or her vehicle could be impounded, leading to impounding charges and towing fees. The impounding charge increases with the number of days the vehicle is impounded. To retrieve their vehicles, uninsured drivers have to pay the fees and show they have obtained minimum liability coverage.
"A $500 ticket could actually be double that when you add on court costs imposed by local jurisdictions where the incident occurred," he reports.
In addition to all the above costs, uninsured drivers also face the prospect of being charged one or even two points on their licenses, which will likely affect their rates at renewal time.
"Depending on the state, based on the fact they don't have insurance, uninsured drivers would also incur a surcharge to obtain insurance," he says. "Your risk profile would already be higher because you were driving without insurance. And who's to say you wouldn't break other laws?"
How you lose as an uninsured driver
If you're uninsured and you are hit by another driver, prepare to wait.
"A bodily injury claim can take a while to settle, and you will not have compensation for medical treatment until it is," Samarzja says. "All of it is out of pocket until the settlement. If you the uninsured is seriously injured, you could be talking about thousands and thousands of dollars in medical costs."
If you're uninsured and your vehicle is damaged, you can make a property damage claim against the at-fault driver, except in states that bar uninsured drivers from economic recovery.
If you're uninsured and at-fault, you could be in for a world of hurt. Injured parties can still bring lawsuits against you, regardless of whether you have insurance to protect yourself. And you'll have to pay for your own car damage and injuries.