Most states require drivers to have automobile insurance as a condition of registering a car or motorcycle. But if you live in the few states that do not have this requirement, or if you let your automobile insurance lapse, and you get into a car accident, what will happen after the accident depends on who is at fault for the accident and whether you live in a “no-fault” state. (Learn more about car insurance laws in your state in our State Car Insurance Laws section.)
If the Other Driver Is at Fault in a "Fault" State
This is the easy one. If you get into a car accident that is the other driver’s fault, and you are not in a no-fault state, you don’t have to do anything different from what you would have done if you did have car insurance.
Since the accident is the other driver’s fault, you would not need to notify your car insurance company even if you had car insurance (although that's always a good idea). If you were injured or suffered property damage in the accident, you would make a claim against the other driver’s insurance company.
If The Other Driver is at Fault in a "No-Fault" State
No fault insurance means that your automobile insurer will pay some or all of your medical bills if you get into a car accident, regardless of who was at fault for the accident.
In some “no fault” states, there is a limit to what your own automobile insurance company will pay. After your medical bills exceed the state’s “no fault” limit, you or your health insurer are responsible for paying them.
If the other driver is likely at fault for the accident (i.e., the other driver rear ended you or ran a red light or a stop sign), and you are in a no fault state, then you will still be entitled to make a claim for personal injury or property damage against the other driver, but your overall recovery may be limited.
Remember that, in no fault insurance states, it is your insurance company that pays for the first portion of your medical bills. In no fault states, your insurer may also pay for the first portion of your lost earnings and property damage claims. (Learn more about How No-Fault Works.)
If you have no automobile insurance, then it is likely going to be you, not the other driver’s insurer, who will be responsible for paying the first portion of your medical bills. Nor will the other driver’s insurer be responsible for paying the first portion of your lost earnings or property damage claims. However, your ability to make a personal injury claim against another driver for his/her negligence does not depend on whether you have car insurance yourself. You will still be able to make a personal injury claim against a negligent driver. (Get more information on Fault for a Car Accident.)
If You Are Likely at Fault
If you think that you are likely going to be at fault for a car accident (i.e., you rear ended the other driver, or you ran a red light or a stop sign), and you have no automobile insurance, then, unfortunately, you will likely have a problem regardless of what state you are in. There is not much that you can do except tell the other driver that you have no insurance. Do not refuse to answer questions about the insurer. That will just make matters worse.
What will happen next is that, unless you obviously appear to have a lot of money, the other driver will then file an uninsured claim against his/her own insurer. After the insurer resolves the claim (which may take years), the insurer will likely sue you to recover whatever it paid its own insured. This procedure is called subrogation.
If an insurer sues you in a subrogation case, you are going to have to pay it something in order to settle the case and make it go away. In subrogation cases, the insurer knows that defendants (you would be the defendant) most likely do not have much money, so it will not be looking for a lot of money if you do not have it. But it will be looking for something, and, in order to get out of the case, you will need to fill out a financial affidavit for the insurer and perhaps even provide the company with copies of your tax returns.
The fact is, driving without car insurance is a bad idea. You shouldn't do it. If you can’t afford to insure your car, you probably shouldn't drive. If you have no insurance and you cause a car accident, nothing good is going to happen.