New Laws Leave Uninsured Drivers Unprotected

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There are many, many reasons not to drive without car insurance.   Not only is it against the law in every U.S. state (uninsured drivers risk high fines, license suspensions, and jail time, depending on the jurisdiction), but uninsured drivers expose themselves to significant personal financial liabilities if they are at fault in an accident.   The number of uninsured drivers is also one of the primary reasons that some states (such as Alabama) have very high insurance rates.

Regardless, uninsured drivers have generally been able to recover from another driver’s insurance if the other driver is at fault in an accident.   That’s changing, on a state-by-state basis.   It’s called “no pay, no play” legislation, and in essence what it means is that if someone is not carrying car insurance, and they get into an accident, regardless of fault they have limited recovery rights.   In other words, an uninsured driver won’t be compensated for anything other than hospital bills or car repairs, even if an insured driver is at fault in an accident.

Legislative Trends

Recently, Oklahoma passed a bill that would limit the ability of uninsured drivers to recover non-economic damages (such as pain and suffering) from an insured driver.   In a serious accident, non-economic damages are typically the most expensive payout for insurance companies to make.   With the passage of this law, insurance companies will no longer be liable for anything other than hard expenses of uninsured drivers.

The thought process behind this type of legislation is that faced with the prospect of the inability to recover for post-accident pain and suffering, many uninsured drivers will be more inclined to seek out at least minimum liability coverage.   It is also no small matter that statistically, many insurance fraud cases are initiated by uninsured drivers after a staged accident.

Besides Oklahoma, several states already have (or are considering) “no pay, no play” laws.   Kansas, Minnesota, and Montana have such legislation in the works, and Alaska, California, Iowa, Louisiana, Michigan, New Jersey, North Dakota and Oregon all have some form of restrictions on what uninsured drivers can recover in an accident.

Do You Still Need Uninsured Drivers Coverage?

Are “no pay, no play” laws going to eliminate the need for insured motorists to carry coverage against uninsured drivers?   Absolutely not.   There will always be people who, for whatever reason, do not carry car insurance yet still get behind the wheel.

If you’re in an accident with an uninsured driver, and that driver is at fault, there is no other way to make sure that your personal injuries or property / car damage will be covered.   “No pay, no play” simply gives uninsured drivers another incentive to obey the law, and purchase car insurance.