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In 2019, 12.6% of motorists, or about one in eight drivers, were flat-out uninsured, according to a 2021 study by the Insurance Research Council, an industry-funded research group. But that’s just a national average of drivers on the road with no liability protection. In fact, 21 states and the District of Columbia had uninsured motorist rates higher than 12.6% in 2019, according to the same study.
One in eight drivers has zero auto liability insurance
So, the danger of getting hit by an uninsured driver is real, whether you are driving your car, sitting on your porch or walking across the street. When a driver does not carry insurance coverage and causes an accident, everyone ends up paying for that accident in the end.
What happens when you are involved in an accident, and the other driver is at fault but has no insurance or not enough insurance? What steps can you expect your own insurance company to take to recover damages on your behalf?
What Is Subrogation?
Subrogation is a legal term that refers to an insurance carrier’s legal right to pursue a third party that caused an insurance loss to the insured. In short, subrogation allows your carrier to claim the money it has already paid you if you’re in an accident and are covered, with insurance products that include Uninsured Motorist (UM).
If the at-fault driver is not insured or underinsured, your own collision, uninsured driver insurance and PIP may cover your expenses.
If the at-fault driver is not insured or underinsured, your own collision, uninsured driver insurance and PIP may cover your expenses, but your carrier might later decide to pursue the other driver in court to pay for your costs, which include your deductible.
Your carrier might later decide to pursue the other driver in court to pay for your costs, which include your deductible.
The insurance company will not legally go after an uninsured at-fault driver if you do not carry collision/comprehensive or uninsured motorist coverage. Filing uninsured motorist claims is generally the most successful way to get your expenses covered after an accident with an uninsured driver.
What’s Uninsured Motorist Coverage (UM)?
Uninsured motorist coverage is an insurance product that is designed to protect you from losses caused by uninsured driver or a hit-and-run driver. There are two types of uninsured motorist coverage:
Uninsured motorist bodily injury coverage
Uninsured motorist property damage coverage
Uninsured motorist coverage typically can’t be for a higher dollar amount than your own liability coverage.
For example, if you have $50,000 in liability coverage, your uninsured motorist coverage can only be for $50,000 or less. However, if the uninsured driver causes more than $50,000 in damages, your uninsured-driver policy will pay only up to $50,000 and no more.
What’s Underinsured Motorist (UIM) Coverage?
While uninsured motorist coverage pays out after an accident with a driver who caused the smash-up but has no insurance, this coverage is for crashes with a driver whose minimum coverage insurance cannot cover all the resulting costs. This coverage has two aspects:
Underinsured motorist bodily injury coverage
Underinsured motorist property damage coverage
If your claim is higher than the liability limits of the at-fault driver’s insurance, your underinsured driver coverage will go a long way to paying the balance.
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What Do UM and UIM Coverage Pay For?
Many insurance companies sell uninsured and underinsured coverage as one insurance product. However, both types of insurance protect you against the same losses:
Damage to your vehicle
Damage to your home
Pain and suffering compensation
Many insurance companies sell uninsured and underinsured coverage as one insurance product.
In some cases, both types of coverage will even pay for babysitting, house-cleaning and other services that you cannot perform as a result of a car accident.
A Note on Overlapping Car-Accident Coverage
While your health insurance will pay for your medical bills and personal injury protection (PIP) will pay for your and your passengers’ medical bills, uninsured/underinsured bodily injury coverage will start to pay when your health insurance and your PIP run out.
While your collision insurance will pay for any damages to your vehicle as a result of an at-fault non-insured motorist, uninsured/underinsured property damage will start to pay out when your collision coverage runs out.
So, while these insurance products end up paying for the same respective things, they actually don’t overlap. Uninsured/underinsured coverage offers extra protection to safeguard your financial stability in the event of a catastrophic loss.
Is Uninsured or Underinsured Coverage Required?
In most states, licensed drivers are legally required to purchase auto liability insurance, which covers the injury or death of another person or damage to their property in an accident that you caused. While many states require neither uninsured motorist coverage (UM) nor underinsured motorist (UIM) coverage, here is a breakdown of the states that require one or both:
State UM UIM Connecticut✔✔ District of Columbia✔ Illinois✔ Kansas✔ Maine✔✔ Maryland✔✔ Massachusetts✔✔ Minnesota✔✔ Missouri✔ Nebraska✔✔ New Hampshire✔ New Jersey✔✔ New York✔ North Carolina✔✔ North Dakota✔✔ Oregon✔✔ South Carolina✔ South Dakota✔✔ Vermont✔✔ Virginia✔ West Virginia✔ Wisconsin✔✔
When you are shopping around for the cheapest insurance, you’ll be getting a lot of quotes. Those quotes will reflect the mandated minimum insurance for the state in which you live. So if you are looking for auto insurance and you live in Wisconsin, the car insurance quotes you get will comprise not only bodily injury and property liability insurance but also underinsured and uninsured driver insurance.
States with the Most Uninsured Drivers
Non-insured drivers are everywhere-just check out the eyebrow-raising statistics below! According to the Insurance Information Institute, the Insurance Research Council’s figures reflect “the number of uninsured motorists based on insurance claims, using a ratio of insurance claims made by people who were injured by uninsured drivers relative to the claims made by people who were injured by insured drivers.”
State Percentage of Uninsured Motorists Mississippi29.40% Michigan25.50% Tennessee23.70% New Mexico21.80% Washington21.70% Florida20.40% Alabama19.50% Arkansas19.30% District of Columbia19.10% California16.60%
But no matter which state you live in, your own insurer may highly recommend getting uninsured motorist and underinsured driver insurance.
When Should I Call a Personal Injury Lawyer?
If you don’t have uninsured/underinsured insurance and the at-fault driver doesn’t have insurance, you can still file a personal injury lawsuit against the driver. Injury lawyers usually offer a free consultation for legal advice, so there’s no harm in checking out your options.
If you choose to file a personal injury lawsuit against the driver who is at fault for the accident, you should be aware of the filing deadline, which could be 30 days or up to two years, depending on the state. However, it is important to remember that this sort of lawsuit is not the best bet in the world: After all, if the negligent driver can’t afford the money for an insurance policy, they probably don’t have the money to pay for any damage to you or your car.
If you decide to go forward with a lawsuit, your lawyer will probably do a credit and asset check of the other driver. Even if that at-fault driver is short on cash, they may have personal property, financial assets, business investments or, say, a family trust. When a personal injury lawyer files a claim, this discovery process is crucial.
After that, your lawyer may file a lien on any of other driver’s assets to prevent the defendant from unloading them during proceedings. After bringing suit, a judgment against the defendant may be made. Often, the defendant enters into a payment plan. While your lawyer may not charge you any legal expenses, they will take a percentage of the money that results from a successful claim.
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What To Do After an Accident
Getting into an accident can be a confusing, traumatic event. Whenever you are involved in an accident, you should immediately contact your own insurance company, whether or not you are the at-fault driver. You need to get the ball rolling as soon as possible for the best outcome, especially if the other driver is an uninsured or underinsured motorist. Furthermore, your insurance company will be investigating every aspect of the accident. If you are making an insurance claim, you need to be able to back up your version of events.
Call the Police
After a crash, your first call should be to local law enforcement. This is particularly true if it turns out the other driver has zero insurance. For one thing, the police report is an official record of the event that your insurance company will definitely want to have. Also, the police report will help you to recover damages when you make an uninsured motorist claim.
At first glance, the damage may not seem that bad, but a dented fender could mean your vehicle’s frame is out of whack. Not only that, your injuries may be more severe than they appear to be at first. The extent of your injuries may not be clear until much later, due to the human body’s capacity to block out pain in stressful events.
Of course, at-fault drivers and uninsured or underinsured drivers may well try to dissuade you from calling the police, but you should always call the police, especially if you end up making an uninsured motorist claim.
Document the Scene
It’s never been easier to document the scene of an accident and the damage to your car and the other car. One way to gather evidence is to take pictures using a traditional camera, your phone or a tablet. Take close-up photos of the damage, whether that damage is to your car, the other vehicle or a fence, stop sign or other roadside furniture. You could also take pictures of the other driver and their license plate. Further, you should also take snaps of the entire scene to provide a larger context. The more evidence you gather, the more you can prove your case to investigators and attorneys about what really happened.
As we all know, your memory can play tricks on you. That’s why it’s important to take notes while the accident is still vivid in your mind. Takedown the other driver’s contact, registration and insurance info, the make and model of their car, the location of the accident and any other pertinent details. In fact, many drivers keep a little spiral notebook in their glovebox to record their gas mileage; this notebook is a handy place to record information that will help you to recover money from your insurance company.
Speak to Bystanders
If there is anybody around the scene of the accident who saw what happened, you should ask them what they saw and write it down. Further, you should get their contact information and give them yours: They may remember something later, and you may need them to appear as a witness in court.
Get a Medical Report
Whether you are treated by EMTs at the scene, staff at a hospital or your family doctor, you should make sure to secure a medical report. Just like a report from law enforcement, a medical report is an official document that the legal process recognizes as legitimate. When you are being treated, let the medical personnel know that you’ve been in an accident and need a full check-up, including X-rays and other tests that can discover, verify and document that you have suffered internal injuries, fractured or broken bones or a brain injury.
Keep All Your Receipts
In order to get a fair settlement from your own insurance company, you’ll need to document and store all receipts related to the expenses which you incurred as a result of the accident with a non-insured or underinsured driver. For example, if you are making an uninsured motorist claim, you’ll want to gather and retain any proof of doctor visits, rehab costs for injuries and lost wages, if your injuries cause you to miss work or potential income.
Penalties for Driving Without Insurance
Did you know that you can be fined and receive other penalties for not possessing proof of insurance? If law enforcement asks you for proof of insurance, you should have either your insurance ID card, your declarations page or a proof-of-insurance letter from your carrier, whether that is the actual hard copy or a close-up picture of the hard document. Many carriers have an app that allows you to call up your proof of insurance on your phone.
Of course, not having your own policy for auto liability protection is worse than not having proof of insurance, and getting into a car accident without insurance when you are at fault for the accident is worse than both. Here are some of the penalties a driver without liability could face:
- Tickets and fees
- License suspension or revocation
- Registration suspension or revocation
- License and registration reinstatement fees
- Vehicle impoundment
- SR-22 requirements
- Jail time
An SR-22 form is another kind of proof of insurance that you have to pay for every year you’re required to file an SR-22 form. It proves that you meet the minimum level of required financial responsibility.
Your specific penalties will vary according to your state, your driving record, the damage you’ve caused and other factors. Needless to say, driving with zero auto liability leaves you vulnerable to enormous risk that could rescind your driving privileges or devastate your financial health.
The Cost of Driving Without Car Insurance
The financial repercussions of driving without auto insurance can be heavy, but just imagine if you were to cause a car accident in which the other driver and their passengers were seriously injured.
If the fines and penalties of driving without proof of insurance can run up to $4,500 in some states, the cost of a personal injury claim could end in a lifetime of debt, the loss of your house and possibly bankruptcy. You could be on the hook for tens or even hundreds of thousands of dollars.
Is spending about $1,500 a year for your own insurance policy that much to pay for your peace of mind and the financial stability of your family?
Don’t Let Your Insurance Lapse
If you let your car insurance lapse, it’s not a criminal offense unless you get behind the wheel when it’s not valid.
It’s important to note that every car insurance company looks at your insurance history when calculating your premium. A lapse in insurance suggests a lapse in judgement that insurance carriers interpret as risky behavior; in fact, you might see your auto coverage rates spike when you reinstate your auto coverage, even if you were not using a car while your insurance lapsed.
Your car’s registration may automatically be invalidated if your vehicle coverage lapses. Savvy drivers renew their insurance well in advance of their policy’s expiration, and some insurance companies will even give you a discount for renewing early.
Never Drive Without the Right Insurance
We hope the information contained in this article will inspire and motivate you to protect yourself against the potentially disastrous results of getting on the road with no insurance or not enough coverage.
Whether you are looking to buy the state’s mandated minimum liability coverage or you want to add underinsured motorist coverage to your policy, SmartFinancial can help match you with the right insurance company at no charge. What’s more, SmartFinancial’s AI-powered algorithms will sift through hundreds of policies in your area to find the one that’s right for your budget. Just enter your zip code below and answer some simple questions.