Did you know that in 2021, US traffic fatalities reached a 16-year high? Despite these grim statistics, the Insurance Research Council recently discovered that one in eight drivers are uninsured. Unfortunately, the more you drive, the higher your chances of being involved in an accident. The shocking fact is that car accidents (even minor ones) can negatively impact your life and finances.  If you’re wondering what happens if you get in a car accident without insurance, this article will answer this question as well as explains the differences between at-fault versus no-fault states, the penalties you might experience if you’re in an accident, the correct amount of insurance coverage you should have, and more.

Car Insurance 101—Understanding How Car Insurance Works and Various Types of Insurance

Before we delve deeper into this subject, let’s discuss car insurance and how it works. Car insurance is a type of coverage an individual purchases to have financial protection against bodily injury or physical damage to a car if they are ever involved in an accident with another driver. There are eight different types of car insurance:
  • Liability insurance policies cover property damage and/or injuries to another person that are the result of an accident in which you are at fault. Most states require a minimum amount of liability insurance coverage.
  • Bodily injury liability insurance protects you when you may be responsible for a car accident that causes bodily injury to the other party and helps pay the medical cost and lost income resulting from the injuries.
  • Underinsured coverage: This is used when the at-fault party’s insurance does not cover all the damages caused by accident, and the injured party’s underinsured policy covers the rest.
  • Uninsured coverage: This comes into play when you are involved in an accident with a driver who doesn’t have insurance, and this policy pays your medical and car repair costs.
  • Comprehensive coverage: This policy provides coverage to your vehicle for events that are outside your control, like vandalism, fire, natural disasters, and other incidents.
  • Collision coverage: This coverage is often used in the event of a collision with another vehicle or object, irrespective of your fault.
  • Medical payments insurance:  This covers medical expenses when you or another person are injured as a passenger, driver, or pedestrian, regardless of who’s responsible for the accident.
  • Personal injury protection: Also called no-fault insurance, a personal injury policy pays health-care expenses like medical bills, funeral costs, and lost income of the injured party, no matter who is at fault.
State-Mandated Insurance Requirements
Although there are different types of insurance, not all states require motorists to have mandatory car insurance. Even so, it’s surprising that some individuals refuse to get insurance even if it is state-mandated. Since each state is different, the type of insurance required can vary from state to state. For instance, New Hampshire does not require drivers to have automobile insurance; however, uninsured drivers must prove that they are financially capable of covering injuries or damages in the event of an “at-fault” accident. In contrast, most states (except Florida) require their drivers to have at least bodily injury liability insurance. Some states, like Washington, DC, require motorists to have bodily insurance, property damage liability coverage, and uninsured or underinsured coverage. Florida only requires drivers to have property damage liability and personal injury protection. Finally, in half of the states, drivers must have uninsured or underinsured coverage. Regardless of where you live, if you don’t carry the legally mandated level of insurance, or if you are involved in an accident or stopped on suspicion of another crime but can’t prove you’re insured, you may receive hefty fines and possible prosecution if you cause a serious accident or are a repeat offender.

What Should You Do If You’re in a Car Crash Without Insurance

Living in a state that doesn’t require drivers to maintain a specific type of insurance doesn’t exempt the injured party from recovering damages from the person who caused their injuries. For instance, you have options if you’re injured in a car crash, but the other person is uninsured or underinsured. You can file:
  • A noninsured claim with your insurance company (assuming you have insurance for underinsured or noninsured motorists).
  • An insurance claim with your company to see if they’ll cover the damages.
  • A lawsuit against the other party to be compensated for sustained injuries and damages if your insurance company refuses to pay or they don’t pay enough.
Understand Your Rights
If you’re in a state where insurance isn’t mandated, but you’re at fault or partially at fault, you may still be responsible for some of the damages. For instance, let’s say you live in Virginia. This state follows the doctrine of contributory negligence, which means that you’re only able to recover for damages you didn’t cause. So if you caused 10% of the injuries, you could only recover 90%. In contrast, if you’re in New Hampshire, you’ll be held to a modified contributory negligence standard. This means that, as a plaintiff, you may be able to recover if you’re less negligent than the defendant. If you’re over 51% responsible, you can’t recover. Furthermore, failing to pay the damages can have immediate legal consequences, including suspension of your driving license. It may also include paying for medical expenses, vehicle impounding, the other party’s legal fees incurred while bringing a lawsuit, higher insurance rates than an average insurance payer, and other consequences.

What’s Fault Got To Do With It?

Determining who is at fault can significantly affect the amount you can recover.
 If you live in a state where car insurance is required:
  • If you are at fault, you’ll face penalties and have to pay the damages caused, and the driver can also bring a lawsuit against you.
  • If you are not at fault, you’ll also receive a ticket for driving without insurance and have to pay a fine, depending on state requirements.
  • If you live in a no-fault state, the driver must first claim their damages from their insurance company, and if the damages exceed the threshold, they can seek compensation from the other party. However, you can still face legal issues if you don’t have car insurance.
If you live in a state where car insurance is NOT required:
  • In this case, if you are at fault, you will have to pay the compensation from your pocket, and the other party has the right to sue for damages.
  • If you are not at fault, you can file a third-party claim with the other party who will be responsible for paying the damages.

Penalties in a Car Accident Without Insurance

If you are involved in a car accident and don’t have car insurance, it may lead to numerous penalties, including:
  • Having to pay the injured person’s health-care expenses, lost wages, and pain and suffering.
  • Fines: If you drive without insurance, penalties range from $50 (in states like North Carolina) to $1,500 (in states such as Delaware and New York), depending on each state.
  • Paycheck garnishment: The court can grant a garnishment order which means the damages can be directly deducted from your paycheck.
  • Vehicle impoundment: Your vehicle may be impounded and towed if you do not have the minimum insurance required.
  • The requirement to obtain an SR-22 insurance certificate. This certificate proves that the driver has car insurance meeting the minimum liability coverage required in a particular state.


Although your state may not require that you have insurance, the consequences of driving or being involved in a car accident without insurance can be disastrous for your finances and health. Now that you understand the repercussions and penalties you could face without insurance, the next step is choosing the right policy for you. Selecting a policy that offers adequate protection can be a game changer if you’re ever involved in a car accident. Always research the amount of insurance you need, determine what type of policy your state requires and what protection you need, and then move forward with your purchase to ensure that you and your loved ones are protected in case of a crash. Read this article in case you’re ever involved in a car accident and need to know what to do. You can also click the button below for a free lawyer consultation.  Or read this article if you’re curious to know what your accident settlement could be worth.

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