Statistics suggest nearly 14% of drivers in the United States have no vehicle insurance, and while that’s a requirement to drive legally on the roads in every state, not everyone follows the rules. Car insurance offers you a multitude of protections if you’re in an accident. It helps to fund the cost of the car repairs themselves, but it also helps cover the medical bills for you or anyone you’ve injured in your vehicle. What happens, though, if you’re in a car accident with someone without insurance? It’s a complex question with a fairly complex answer.
Three Key Options
If you’re involved in a car accident, no insurance means high costs for you, even if it wasn’t your fault. If you are involved in a crash with a motorist who doesn’t have any insurance, you essentially have three options:
- Pay for the damages to your car out of your pocket.
- Ask your insurer to cover the cost.
- Sue the other driver.
One choice is to simply pay the damages out of pocket. That, however, can be a serious problem. According to the Insurance Information Institute, the average cost of damage in any car accident is $3,231. Not very many people have that much money available to pay the out-of-pocket damage to a vehicle.
In most cases where there is an accident with a driver who has no vehicle insurance, you will most likely have to turn to your car insurer. Collision coverage is part of many car insurance plans. This extra coverage will pay for any repairs to your vehicle if you are involved in an accident that was your fault, if you’re in an accident with an uninsured driver, or if a hit-and-run driver damages your vehicle. Collision coverage doesn’t apply to your injuries; the collision coverage only pays for the cost of getting your car fixed.
There are some limits when it comes to collision coverage, so it pays to understand the policy you’re purchasing and explore a few “what-if” scenarios with your insurance agent so you understand the limitations of any policy.
You also have the option of suing the other driver, but if he or she was driving without vehicle insurance in the first place, it is highly unlikely that the individual may have any money to pay you after the court case. Most likely, he or she won’t even show up for the trial.
Prepare in Advance For These Kinds of Accidents
The best way to avoid tough choices like these is to purchase uninsured motorist coverage when you buy your vehicle insurance policy, which offers protection in case you are hit by an uninsured driver. In most states, uninsured motorist coverage is already included in the bundle, and you have no choice of opting out. However, there are some states where uninsured motorist coverage is optional. In general, there are two types of uninsured motorist coverage:
- Uninsured motorist bodily injury coverage that will cover the involved medical bills and lost wages.
- Uninsured motorist property damage coverage that covers any damage to your vehicle. It may also cover the costs to fix your property if it is damaged during the accident.
It is best to purchase coverage for both bodily injury and property damage.
Wondering exactly how much coverage you need? The most often recommended figure for uninsured motorist coverage is $100K bodily injury/person and $300K bodily injury/accident. You can have a deductible of $500 or $1,000.
The cost of this add-on isn’t excessive either. A general rule is that uninsured motorist coverage will increase the total cost of your vehicle insurance by about 5%. So if you are paying $1,000 a year for your regular car insurance, you can expect to pay an additional $50 a year. However, the final figure will also depend on your age, driving experience, and location.
The No-Fault State Difference
Florida is a no-fault state when it comes to car accidents, so the fact that the other driver may not have been insured is irrelevant, and you may not need uninsured motorist coverage. In Florida and eleven other no-fault states, your insurer will pay for all your medical bills and other expenses after a vehicle accident. Further, your ability to sue the uninsured driver may also be limited unless you have suffered life-threatening injuries or have enormous medical bills that go beyond a certain amount. To understand exactly how this coverage works and whether you need additional coverage because you work or regularly travel in other states, it may be best to contact your insurance company.
If the other party doesn’t have car insurance, you could be out quite a bit of money if you’re in an accident. Understanding what your policy covers and what it doesn’t is essential before an accident happens.