A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 26, 2021

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Here's what you need to know...

  • In most states, car insurance is a legal requirement
  • There are legal consequences for not having insurance even if you are not involved in an auto accident
  • If you are in an accident and do not have insurance, the outcome may depend on whether you are in a no-fault state or not
  • If the other driver is not at fault and files an uninsured motorist coverage claim with their own insurance company, the insurance company may come after you for subrogation

Most of us try our best to drive safely and defensively; however, car accidents still happen. When they do, it is a relief to know we can rely on our auto insurance company to make things right.

The key is finding an auto insurance company that will not overcharge you on your premium. If you need a lower rate for your auto insurance, try an online price comparison tool.

These tools allow drivers to compare several different car insurance carriers, policies, and prices all in one place. Before these types of calculators, comparing quotes was time-consuming and challenging. Now drivers can be in control of the premium paid and select insurance that is the right fit.

Enter your zip code into our FREE comparison tool to find the right insurance for you!

Auto Accidents and No Insurance

Even when there are no serious injuries, car accidents can become a major headache. There will likely be insurance claims to file, vehicles to get repaired, and potentially even traffic tickets to pay.

It can take a while for life to get back to normal after even a minor car accident. However, being involved in an auto accident and not having the legally required types and amounts of auto insurance will increase the hassle and headache of a car accident and will even have legal ramifications.

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Consequences of Driving without Auto Insurance

Nearly all states require that their drivers have a minimum amount of car insurance. This coverage protects everyone on the road. The act of not having auto insurance, even if you are not involved in an accident, can lead to many different consequences, depending on your state. These consequences include:

  • Fines
  • Imprisonment
  • Vehicle impoundment
  • Community service
  • Suspension of your driver’s license
  • Suspension of your car registration

If you are involved in an auto accident, you could face the above legal consequences and more, including severe financial implications.

Fault and No-Fault States

What happens next is determined by what kind of state the accident occurred in. If you are in a fault state, and the other driver is at fault, you can file a legal claim against the other driver’s auto insurance carrier.

The claim can be for property damage to your vehicle, bodily injury for any injuries you suffered, or for both, which is called a third party claim.

In an at-fault state, you will still face the legal ramifications for not having insurance coverage, but you will have recourse for your own damages if there are any.

In a no-fault state, it will not matter who was at fault. Each driver will file a claim with their own insurance company for their property damages and bodily injuries. Each state will have their own laws on how their no-fault system works.

However, if you do not have insurance, you will be left to pay your own medical bills, for your own car repair or replacement, and any other expenses you incur about the accident.

If you are in a no-fault state, and the other driver is likely the at-fault party in the accident, you can still make a legal claim for your property damages or bodily injury expenses. However, the amount you can ask for and recover will be limited.

What if the accident is my fault and I do not have auto coverage?

The unfortunate truth is that, if you do not have auto insurance, and you are likely the person at-fault for the accident, you now have some trouble on your hands. No matter what state you are in, you will now be personally liable to cover the other party’s damages and face the legal consequences of not having insurance.

At this point the best policy is honesty. Do not lie to the police or the other driver about the status of your insurance coverage or refuse to answer questions.

Lying at this point will only serve to make problems worse for you and the situation. The best way to protect yourself from ever being in such a situation is to ensure that you have auto insurance coverage at all times.

Without auto insurance coverage, unless you have a fair amount of personal assets such as large amounts of money or property, the other driver will most likely file an uninsured motorist claim with their own car insurance company if they have elected this type of coverage. Some states do make having uninsured motorist coverage mandatory.

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Will I owe money to the other driver?

Once the other driver’s car insurance company has made them whole again within the terms of the policy which can including paying for their lost wages, medical bills, and for their property damages, they will probably sue you to recover the amount that it spent to resolve the claims of the other drivers. This process is commonly known as subrogation.

Unfortunately, at this point, you will need to be prepared to pay some amount of money in order to settle this case and have it over once and for all.

Most insurance companies realize that people in your situation do not usually have a lot of money, and therefore, they will not be expecting you to pay the entire amount that they paid on the claim. They do, however, expect some amount of reimbursement.

In most cases, you will be legally required to turn in a financial affidavit and possibly even copies of your recent tax returns so that they have options to get payment from you, whether you willing do it or not.

If you refuse to pay or work with them on a payment arrangement, they could garnish your wages or levy your bank accounts. It is best to communicate with them and agree on a satisfactory settlement and payment arrangements.

When it comes to accidents and auto insurance, the adage that an ounce of prevention is worth a pound of cure rings true.

It is much easier to obtain, at the minimum, the legal amounts and types of auto insurance that you are required to have, which can save you a lot of money and additional problems in the event of an accident.

If you are having trouble affording your auto insurance premiums or are simply curious if you could be paying a better rate, try using an online auto insurance price comparison tool. These free tools could put money back in your pocket each month and still allow you to have great coverage.

Enter your zip code in our FREE comparison tool below to get started!