Uninsured Drivers and Car Accidents

Despite being required by law in most states, some drivers do not carry insurance on their cars. When an uninsured motorist is involved in an accident, the lack of coverage can cause hardship for the uninsured driver, and also for any other persons who suffer injury as a result of the uninsured driver's negligence.

Liability for the Driver

The consequences of being uninsured vary by state. Some states now limit the damages that an uninsured driver can recover following a car accident, even when they are not at fault.

  • Many states bar uninsured drivers from making a claim for non-economic damages (typically "pain and suffering").
  • Uninsured drivers may also face increased potential liability in some no-fault states. For example, an at-fault uninsured driver in Michigan may be liable for all damages to another driver's vehicle, while insured drivers have their liability capped at $500.
  • In most states it is a criminal offense to drive without having your car properly insured.

When an uninsured driver causes injuries to another person, the driver will not be able to call upon the auto insurance carrier to defend against any resulting lawsuits, or to pay any settlement or award of damages resulting from litigation. They may have to pay a judgment out of their personal assets.

In many states, a driver with an unsatisfied judgment resulting from a car accident will be unable to renew his driver's license until the judgment has been paid. Uninsured drivers may be forced into bankruptcy.

Problems Recovering Damages

As uninsured drivers often have little to nothing in the way of personal assets, and by definition do not have any insurance coverage for the accidents they cause, a person injured by an uninsured driver may have difficulty recovering adequate compensation for those injuries. A person injured by an uninsured driver should explore the possibility of:

  • Uninsured Motorist Coverage: When you purchase auto insurance, you will typically have the opportunity to purchase uninsured motorist coverage. Such coverage may be required by law in your state. Make sure that you have an adequate amount of uninsured motorist coverage, which will help compensate you for your injuries in the event that you are struck by an uninsured driver.

  • Other Auto Insurance Coverage: Sometimes an uninsured driver will have coverage under somebody else's policy, for example, by virtue of being a dependent residing in the household of an insured driver. Coverage can depend upon state law and insurance regulation, as well as the terms of the other driver's insurance policy, but this is an avenue of recovery that should be explored whenever possible.

    Be sure to check to see what coverage you have under your own policy, or through the insurance policy of another member of your own household.

  • Personal Assets: Although most uninsured motorists have little to no money that can be reached to pay an accident judgment, that is not always the case. For example, a driver may have failed to properly add a recently purchased vehicle to an auto insurance policy, a car owner may have allowed an excluded driver to operate the vehicle, or the owner may simply have forgotten to pay the insurance bill, resulting in the denial of coverage.

  • Additional Defendants: Sometimes additional parties will be liable for a car accident, and it may be possible to obtain recovery through their insurance or from their assets. For example, the at-fault driver may have borrowed the uninsured vehicle from an owner who may be liable under a state's owner liability statute or theories of negligent entrustment. The at-fault driver may be using the uninsured vehicle to perform job-related duties, raising the possibility that the driver's employer will be liable under theories of vicarious liability or negligence.

A good personal injury lawyer can help an injured client identify possible sources of compensation.

Uninsured Motorist Insurance Claims

If you have uninsured motorist coverage through your own insurance policy, you may make a claim for compensation through that coverage. Your insurance policy will set a time limit for reporting an accident that may result in an uninsured motorist claim, and the time limit may be very short, so make sure that you make a prompt report of the accident to your insurance company consistent with that time limit.

Your insurance company will verify that no insurance coverage is available from other sources. If it verifies that the accident involved an uninsured driver, the insurance company will evaluate the claim and injuries. Its evaluation process will involve the review of your medical records and history. It will take recorded statements from you and possibly from other witnesses, often under oath. It may have you evaluated by doctors it hires to evaluate your injuries, to opine on whether they were caused by the accident, and to assess your treatment options and prognosis.

Once your insurance company has fully investigated your claim, if it agrees that you suffered a compensable injury in an caused by an uninsured driver it will make an offer of compensation based upon its evaluation, up to the amount of your policy limits, the maximum payout you may receive under your insurance policy.

  • If the insurance company offers you the limits of your policy, you will settle the claim for that amount.
  • If your insurance company offers less than the policy limits and you find the offer to be inadequate, you may attempt to negotiate for a higher pay-out.

If negotiations are unsuccessful, your insurance policy will describe how coverage disputes are to be resolved.

Unlike a claim that you would make against the at-fault driver, you do not have the option of litigating an uninsured motorist claim. Instead, your policy will require that disputes be resolved by a process such as arbitration, through which a private arbitrator (or a panel of arbitrators) reviews your claim and issues an award that is binding on you and your insurance company.

The right to appeal from an arbitration award is very limited, and in most cases the arbitrator's judgment will be the final resolution of the claim.

Copyright © 2006 Aaron Larson, All rights reserved. No portion of this article may be reproduced without the express written permission of the copyright holder. If you use a quotation, excerpt or paraphrase of this article, except as otherwise authorized in writing by the author of the article you must cite this article as a source for your work and include a link back to the original article from any online materials that incorporate or are derived from the content of this article.

This article was last reviewed or amended on May 7, 2018.