Being involved in a car accident is always stressful. But things can get worse if you are hit by someone who does not have insurance. What will you do to cover your medical costs and damages?
While most states require that all drivers have insurance, one in eight drivers on the road is driving without insurance.
Moreover, there is also the question of what you do if the other driver is underinsured, or if you are involved in a hit and run accident and you are unable to identify the at-fault driver.
Read on as we look, first, at what the regulations are around auto insurance. We will then look at what you can do in the case of being hit by an uninsured driver or an underinsured driver and if you are involved in a hit and run accident.
Finally, we’ll take a look at uninsured motorist coverage and how it can help you if you are hit by an uninsured or underinsured driver.
Do You Need Auto Insurance?
In all states, except for New Hampshire and Virginia, drivers are required to have collision insurance to cover the cost of any damage they might cause to another person’s vehicle, and the medical expenses of the driver and passengers of the other car in the event of an accident.
In some states, you can forgo insurance if you can show that you have sufficient finances to cover any damages you may cause. These drivers must show that they have funds meeting the minimum amount of car insurance required by the state. These drivers will be issued documentation confirming their “financial responsibility.”
The amount of coverage required also varies from state to state. You can find links to the state insurance commissioners, who set insurance minimums, here. But, as an example, in New York you are required to have $10,000 for property damage for a single accident, plus $25,000 for bodily injury and $50,000 for the death of someone involved in an accident.
The penalty, if you are caught driving without insurance, again varies from state to state. But in New York, the fine is between $150 and $1,500 or 15 days in jail.
Also, if an uninsured driver is hit by another driver and the other driver is at-fault, that uninsured driver is still covered by the liability of the at-fault driver. But many states have enacted “no pay, no play” laws, which limit what uninsured drivers can claim from the insurance of another driver. For example, they are not able to claim compensation for noneconomic damages such as pain and suffering.
What Happens If Someone Without Insurance Hits You?
The rule in most states is that the driver considered “at fault” is liable for all the costs of the accident, including medical costs for everyone involved and for damages to the property of the other driver.
Sometimes both drivers are considered at fault. For example, one driver is declared 60% at fault and the other 40% at fault. In this case, the driver who is less than 50% at fault can still claim damages from the other driver, but there are often limits on what they can claim.
If you are hit by an uninsured driver and they are at fault for causing the accident, you are free to sue the driver for damages and associated legal costs. If they do not have the money to pay, in most states you can go after some of their assets to recoup your costs. For example, you can pursue their savings, a portion of their earnings from future paychecks, or even their home.
If you are in a no-fault state, then your insurance company will still be liable for some of your expenses, no matter who caused the accident. So you will need to file a claim with your insurance provider as well.
Bodily Injury Liability
Many states also require that drivers take out bodily insurance coverage, to cover their own medical expenses and those of any passengers in their car who may be injured in an accident, no matter who is at fault. In states where this is not mandatory, it is still optional.
If you have this insurance, obviously you can draw on that to cover your medical expenses, though not damages.
What Happens When You Are Hit By An Underinsured Driver?
Sometimes you are involved in an accident and the other driver is insured, but their level of insurance is not sufficient to cover your costs. For example, they may only be covered for $5,000 in property damage (the mandatory minimum in California), but your repair costs are set to cost $10,000.
In this case, you can pursue the underinsured driver and/or their insurance company for additional funds. This can be resolved through a settlement, or if they are unwilling, you are allowed to sue.
Insurance companies will often settle these cases, especially if the shortfall relates to direct medical bills.
What Happens When You Are Involved In A Hit And Run Accident?
If you are involved in a hit and run accident, where you are hit by an at-fault driver and they drive off and are never found and identified, you can be in a tough situation as there is no one for you to pursue for your costs.
In this case, if you have comprehensive insurance, you can claim your damages on your own insurance. However, in some cases, this will mean your premiums go up as a result of your claim.
Some insurance companies won’t take away your no-claims discount for this kind of no-fault accident, so they will pay out without raising your premiums. To prove you were not at fault you will need to provide them with the police report number for the accident, contact details for any eyewitnesses, and photographs of the accident location.
Uninsured Driver Insurance
You can take out insurance that will protect you in the case of being involved in an accident with a driver with no insurance.
We have already mentioned bodily injury coverage, which covers the medical costs for you and any passengers in your car regardless of who was at fault in the accident. This is mandatory in some states and can supply a lot of peace of mind when it comes to being caught up in an accident.
Another option is uninsured or underinsured driver insurance. This covers your costs if the person at fault for the accident is unable to pay for whatever reason.
As this is sold as an optional add-on in the vast majority of states, there are a lot of options, so you pay only for what you need.
For example, you can choose to cover just bodily injury, just property damage, or both. If you already have bodily injury insurance, you may not need this for uninsured drivers. You can also choose to cover yourself for both uninsured and underinsured drivers, or both. Many people will choose to cover themselves just for uninsured drivers, betting that the state minimum will be enough to cover their expenses.
You usually won’t be penalized for making a claim if you are in an auto accident with an uninsured driver, and your current insurance company shouldn’t hike your premiums.
However, like all claims, this claim will be recorded on your CLUE report, which is one of the tools insurance companies use to determine your insurance credit score. Therefore, if you change insurance companies after making this type of claim, you may find that the premiums they offer you are higher than expected.
You can learn more about insurance credit scores and how they work here.
If you are looking for a car insurance provider, check out our list of the best car insurance companies.
Being involved in a car accident is always stressful, but things can become even more so if you discover that the other driver doesn’t have car insurance or is underinsured.
You can still pursue the at-fault driver for damages, but this can be a long and challenging process if they simply don’t have the money to pay.
Another option is to invest in uninsured driver insurance, which can cover your costs in these situations. There are a lot of options to personalize this add-on. For example, you can save money by just covering yourself for medical costs if damages to your vehicle aren’t of vital importance.
Unfortunately, despite the fact that almost all states require drivers to be insured, it is often upto us to protect ourselves in case of the unexpected.