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Legal Options When The Other Driver Has No Insurance

Although mandatory automobile insurance laws have been enacted in all but 5 states, insurance industry statistics indicate that 10 to 15% of all vehicles on the road on any given day are being operated without liability insurance. If the driver of such a vehicles is involved in an accident, the accident victims may be forced to pay their own medical bills and other costs such as vehicle repair or replacement.

In today’s post, the motor vehicle / commercial trucking accident lawyer at The Doan Law Firm will discuss the legal options that may be available to those injured in motor vehicle accidents where the at-fault driver is either “underinsured” (having insurance, but not enough coverage to cover all damages) or have no motor vehicle accident insurance.

Who is required to carry motor vehicle liability insurance?

Both federal interstate commerce rules and state laws require proof of motor vehicle accident liability insurance before a vehicle can be legally registered. In addition to “standard” or “minimum” coverage, motorists can usually purchase additional coverage, known as “endorsements” or “riders,” such as:

  • Personal Injury Protection (“PIP”): PIP provides additional accident injury coverage if 1) your standard policy benefits are not sufficient to cover your medical expenses and 2) the other driver is underinsured or uninsured.

  • Underinsured / uninsured motorist: This coverage “kicks in” if the other driver’s insurance does not cover your accident expenses or if the other driver has no insurance. Both PIP and underinsured/uninsured motorist coverage are usuallynot part of a standard auto policy and must be purchased separately.

Privately owned non-commercial vehicles

All but 5 states have mandatory motor vehicle liability insurance laws setting the minimum amount of insurance that a driver must carry in order to legally operate a motor vehicle

Currently, and as mentioned above, five states do not have mandatory insurance laws. In general, if you live in a state without a mandatory insurance law, you must a cash or surety bond with the appropriate court or state agency in order to legally operate a vehicle. These states are:

Commercial trucks

The Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) is the agency responsible for enforcing mandatory minimum commercial vehicle liability insurance requirements. Currently, these minimums are:

Additionally, commercial trucks that operate within the border of a single state (intrastate trucking) are subject to insurance requirements that are specific to that state. Such insurance requirements are usually set by the state’s Department of Transportation, Public Service Commission, taxation and revenue office or some similar agency.

“No-fault” Insurance

With no-fault insurance, each driver’s insurance carrier covers its driver up to the maximum amount provided by the insurance policy. In most cases, state law will prohibit accident injury lawsuits in no-fault cases except under narrowly defined circumstances. If you live in a no-fault state and are involved in an accident, you should contact an experienced auto accident lawyer for advice on how to best proceed with your injury case.

Currently, 12 states (Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania and Utah) and 1 territory (Puerto Rico) have some type of no-fault motor vehicle liability insurance law.

Insured vs Underinsured vs Uninsured Drivers

There are 3 scenarios that you may have to deal with following a motor vehicle accident:

You are insured, other driver is insured

In most vehicle accident cases, this is the best situation to be in: your and the other driver’s insurance adjusters put their heads together, work out a settlement agreement, and everyone goes home reasonably happy.

You are insured, other driver is “underinsured”

If the at-fault driver has insurance but that insurance is not sufficient to cover your expensesand you have underinsured motorist coverage, you may be able to file a claim with your insurance company for uncovered expenses.

You are insured, other driver is uninsured

If both drivers in an accident being insured represents a “best case,” the “worst case” is being involved in an accident with a driver who has no insurance coverage!

Since the uninsured driver has no insurance company that you may turn to, the only way to recover damages from such a driver is to file a lawsuit. However, if you win that lawsuit you will most likely find that the uninsured driver has little income and even fewer assets to pay any judgement that you may win. Because you will also be responsible for court costs and other legal expenses, most lawyers will advise you that it isn’t practical to sue an uninsured driver. There is one exception to this scenario: a 3rd party lawsuit.

In a 3rd party lawsuit, you would file suit not only against the uninsured driver but against a party that indirectlycontributed to an accident without being directly involved. Examples of 3rd lawsuits would include a suit against a bar that served alcohol to an obviously intoxicated customer that later caused an accident or an auto shop where a mechanic improperly repaired a brake system that failed, causing an accident.

In summary, underinsured and uninsured driver accidents are all to common and usually lead to an innocent accident victim being forced to pay their own medical and other expenses. There are situations where it may be possible to file a lawsuit against an uninsured driver, but the probability of recovering damages is so slight that most lawyers will advise that you not pursue such a course of action except in special circumstances.

  • Arizona: Non-insured drivers must post $40,000 in cash, bonds, or certificate of deposits with the State Treasurer

  • Mississippi: Must post a bond equal to the state minimums (25/50/25) or make a cash or security deposit equal to those minimum limits.

  • New Hampshire: New Hampshire does not require a bond, but drivers will be held fully liable in case of an accident.

  • Texas: A surety bond or a deposit of $55,000 with the state comptroller or the county judge

  • Virginia: A driver must pay $500 a year to drive uninsured in Virginia. The $500 is an administrative fee anddoes not replace motor vehicle liability insurance.

  • trucks weighing less than 10,001 lbs., transporting nonhazardous materials: $300,000
  • trucks weighing at least 10,001 lbs., transporting nonhazardous materials: $750,000
  • trucks transporting oil” $1,000,000
  • trucks carrying hazardous materials: $5,000,000

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