It’s easy to take car insurance for granted. You’re in an accident, and, fortunately, nobody’s seriously hurt.
No big deal, right? Just swap insurance details, and the driver’s policy will cover the damage.
But what if the other driver doesn’t have insurance?
You might think it’s a rarity, but it’s quite common. It seems that not even the possible penalties for driving without insurance — which can include fines, a suspended license, or a short stint in jail — are enough to put people off.
According to the most recent data from the Insurance Information Institute (III), 12.6% of drivers — approximately one in eight — in the US don’t have insurance.
Let’s put that into perspective. There are approximately 227.5 million drivers across the country. Based on the III’s percentage, that means around 28.6 million of those drivers don't have insurance.
That’s more than the population of Australia and just a few hundred thousand people short of the population of Texas.
It’s not hard to picture how problematic this is.
What would happen if you were in more than just a fender bender and sustained severe injuries? You might rack up thousands of dollars in medical bills and be unable to work for months.
If the other driver doesn’t have insurance, what are your options?
Check Your Insurance Policy
The type of insurance drivers legally need varies by state. In fault states (including Alabama, California, Colorado, Indiana, Maine, Nevada, South Carolina, Texas, Vermont, and Washington), drivers are required to have mandatory liability coverage. This is designed to cover property damage and the cost of injuries if you cause an accident. Likewise, if another driver causes your accident, this liability coverage kicks in to protect you.
But mandatory liability coverage isn’t the only type of insurance you may have on your policy.
Personal Injury Protection (PIP) is another type of coverage that covers your medical bills and a percentage of your lost income after an accident. In some cases, this is included by default unless you explicitly opt out of it when you take out your policy, so it’s worth checking to see if you have PIP coverage.
PIP is mandatory in no-fault states, including Florida, Hawaii, Kansas, Massachusetts, New York, and Utah. In these states, drivers cannot sue each other for damages — except in certain circumstances, such as significant injury or death — so in the event of an accident, your PIP policy will cover your medical expenses and lost wages, regardless of who is responsible for the accident.
There’s also a type of car insurance designed specifically for accidents caused by an uninsured driver. Called uninsured motorist coverage (UM), this pays for damages when an uninsured driver has caused an accident through reckless or negligent behavior. UM can be used to cover the cost of your medical bills, lost wages from being unable to work, funeral expenses (if the accident causes a wrongful death), and pain and suffering (compensation for the physical and emotional pain caused by your injuries).
Again, uninsured motorist coverage is mandatory in some states, so it’s worth checking the requirements in your state. If you’re in a state where it isn’t required, you may be able to purchase UM separately.
Finally, it’s worth checking your policy for collision coverage. This offers limited protection — it only covers the cost of vehicle damage in an accident, so you can’t use it to recover your medical bills and lost wages — but it can be useful if the other driver isn’t insured.
Apply for Uninsured Motorist Funding
Some states have uninsured motorist funds designed to compensate individuals who have suffered damages after an accident with an uninsured driver.
These programs, their eligibility requirements, and the amount of compensation payable vary by state. For example, Massachusetts’ fund, called the Massachusetts Automobile Insurance Plan (MAIP), caps compensation at $20,000 per person and $40,000 per accident. This means that if several people are injured in an accident, a maximum of $40,000 can be paid out across all parties.
In most cases, people are only eligible for funds if they have been injured in an accident and have exhausted all other possible means of recovery. The claims process can also be long and tedious, and may not fully compensate you for your losses. Still, you may be eligible, and it can serve as a safety net for individuals who are in an accident with an uninsured driver and have exhausted all other options for recovering damages.
File a Lawsuit
Your final option for recovering damages after an accident with an uninsured driver is to file a personal injury claim. This can be worthwhile if you suffer significant losses, as a payout can compensate you for your past and future medical bills, past and future lost income, pain and suffering, and loss of enjoyment (such as if your injury prevents you from doing certain activities and it impacts your quality of life).
That said, it’s worth considering if filing a lawsuit is your best option. If the other driver doesn’t have insurance because they can’t afford it, they’re unlikely to have the means to pay your damages, whether you’re entitled to $10,000, $50,000, or $200,000.
However, you may recover your compensation over time by placing a lien on any property or other assets the responsible driver owns or seizing a percentage of their wages.
It’s also worth investigating whether another party was liable for your accident. Some common examples of third-party liability include:
- An uninsured driver was acting as an employee when they caused the accident — you may be able to pursue compensation from their employer.
- The uninsured driver’s car was defective — for example, the brakes may have been faulty. In this case, you might be able to hold the manufacturer responsible.
- A road defect or hazard, such as an obscured sign, a pothole, or shoulder drop-off, caused the crash — you may be able to recover compensation from the company responsible for maintaining the roadway.
Proving third-party liability can be tricky, but if an uninsured driver doesn’t have the means to cover your losses, it can be the better route for getting the payout you deserve. A car accident lawyer can investigate your case and determine your best option for recovering compensation.
All is not lost if you’re in an accident with an uninsured driver and don’t have additional insurance coverage. But the best way to protect yourself from losing out is by being prepared — checking your insurance policy and making a judgment call on whether you need additional coverage. Of course, no one wants to be in an accident, and you’re more likely than not to be in one with an insured driver, but as the statistics show, the alternative scenario is not uncommon.
This article was produced and syndicated by Wealth of Geeks.