Accident Without Insurance: Who Is Responsible? (Feb 2025)

How Liability Insurance Works

Liability insurance comes in two types. Property damage liability (PDL) coverage pays owners of property damaged by a negligent covered driver. Bodily injury liability (BIL) coverage pays victims injured by a covered driver’s negligence. This system gives innocent victims a way to pay for losses after crashes caused by someone else’s actions.

Negligence occurs when drivers fail to exercise ordinary care, exposing other road users to an unreasonable risk of injury or death. To receive compensation relating to property damage or bodily injuries, claimants must prove the following four elements of negligence:

• Duty of care
• Breach of duty
• Damages
• Causation

The process starts with an insurance claim that explains what happened and why the covered driver is liable. The claim also includes supporting documents like medical records and doctor’s bills.

If the claimant proves liability, the insurer pays the claim up to the policy limits. For example, if the claimant had $38,000 in medical costs and the at-fault driver had $30,000 in BIL coverage, The insurer pays $30,000, and the at-fault driver is responsible for the remaining $8,000.

Risks of an Accident Without Insurance

You face many risks when you drive your car or a car you don't own without liability insurance. States that require coverage can punish uninsured motorists with fines, vehicle registration revocation, and even driver’s license suspension.

These costs may be a drop in the bucket compared to the liability you could face. The two scenarios you might experience when you drive without car insurance include the following:

Car Accident Without Insurance: At Fault

If you cause a crash and lack insurance, you face significant financial liabilities. The law allows accident victims to pursue compensation for economic and non-economic losses. Economic losses include financial costs like medical expenses, income losses, and diminished future earnings. Non-economic losses include pain, suffering, disability, and other losses in quality of life.

Without insurance, you are potentially on the hook for all these losses. If the accident victim successfully proves liability in a lawsuit and wins a damage award, they can enforce a judgment against you. You may need to sell assets to satisfy the judgment. If you do not, the accident victim could try to garnish your wages, attach bank accounts, and place liens against your home and other real estate.

Bear in mind that each accident victim could secure a judgment against you. Thus, hitting a car with a driver and a passenger could multiply your exposure.

Car Accident Without Insurance: Not at Fault

If someone else hits you and you are not at fault,you do not have the exposure for the other person’s losses. More importantly, if the other driver was negligent and insured, you may recover your losses via a claim against their auto policy.

However, when you are not at fault for a crash, it does not necessarily follow that the other driver was at fault. Perhaps no one bears the blame for the collision. This can occur in unavoidable crashes caused by medical events, road defects, bad weather, or poor visibility.

Alternatively, the other driver may be at fault but also lack insurance. When neither driver has insurance, they may end up in court fighting over compensation.

If you buy insurance, you can add several optional features that pay regardless of fault. Medpay coverage pays your medical expenses up to a predetermined policy limit. This coverage usually provides limited benefits, but it can help you get medical treatment when you have no at-fault driver to pursue.

Collision coverage pays to repair or replace your car. You must first meet a deductible. But if the insurer deems your vehicle a total loss, it subtracts the deductible from the payment. Thus, an insurer might pay $7,000 to replace a $10,000 car if you selected a $3,000 deductible. Without this coverage, you must pay to repair or replace your vehicle.

Finally, certain states that implemented tort reform, require you to buy no-fault insurance. This coverage, called personal injury protection, pays your medical expenses and income losses up to a pre-set limit. If you live in a no-fault state and lack this coverage, you must pay out-of-pocket for medical care or rely on your health insurance.

When you get into a crash without insurance, you could face significant legal liabilities. ConsumerShield can connect you with a lawyer who can explain your risks and options. Fill out our contact form for a free case evaluation.