Originally contributed to Credit.com

Auto insurance is compulsory in every U.S. state except New Hampshire, and motorists must carry their state’s minimum requirements to legally drive a vehicle. But not every driver follows the letter of the law. In fact, in 2011, the Insurance Research Council found that one in seven drivers on the road does not have any car insurance at all. Anyone involved in a collision with an uninsured driver (or even those who are underinsured) are therefore potentially vulnerable to substantial expenses.

At Quoted, we’ve explored possible reasons these 30 million drivers might lack insurance: they might not have the legal ability to obtain a driver’s license (without which obtaining auto insurance is quite difficult and often more expensive). They might not be able to afford insurance premiums offered to them. (Credit score-related pricing and increased prices for those living in low-income areas often means higher prices for those with the least money.) Or, perhaps they are simply irresponsible.

But if you’ve just gotten into a crash with someone who lacks insurance, the reasons don’t really matter. What matters is knowing the next steps, knowing what common mistakes to avoid, and knowing how to get compensation for medical expenses and repairs to your vehicle. A few pieces of advice:

Reviewing accident

Never Take Cash at the Scene

If you find yourself the victim of a minor crash, the other party might offer you cash at the scene, suggesting that you both expedite the process and settle the repair bill without the interference of police and insurance companies. And while the idea might sound appealing—especially if you’ve got kids in the car, you’re late for work, or you’re on the side of a busy highway—taking cash instead of trading contact and insurance info is never a good idea.

Estimating repair costs is difficult–even if the damage looks minimal, there could be hidden structural damage that will really hike up the bill. Even trained mechanics can misestimate at first evaluation. (If you’ve never been quoted $200 only to later receive a stomach-dropping call that the repairs will actually be in the thousands, count yourself lucky.) Another reason not to take the money and run: many injuries aren’t immediately apparent, especially with a post-crash adrenaline rush.

You might correctly assess that someone offering you cash at the scene doesn’t have insurance, and you might figure the cash they’re offering is all you’ll get, but that’s not necessarily the case. If you have uninsured motorist coverage (and you should), your own insurance will likely cover your repair costs, but you’ll need the other party’s info to make the whole process much easier (and much more likely to result in a payout for you). See this overview of uninsured motorist coverage to consider whether or not it makes sense for your policy. Accepting cash and also making an insurance claim is fraud, and—setting aside the obvious ethical objections—insurance companies are notoriously good at identifying and prosecuting fraud.

Who is Responsible for Damages after a Collision?

As with all things car insurance, it depends.

Nearly every state sets minimum liability insurance requirements—this will cover the other party’s damages in the event you cause a wreck—and drivers can purchase additional comprehensive and collision insurance—which covers their own bills in the event they cause a wreck.

Some U.S. states are “no-fault” states and some are “tort” states, meaning you may have to sue for damages. Esurance explains: “In no-fault states, drivers go to their own insurance company for payment after an accident. The question of who is at fault in the accident doesn’t usually enter into the equation. In tort states, car insurance companies pay for damages based on who is at fault. So if you’re in an accident where the other driver is deemed completely at fault, their company would have to cover all damages — yours and their own.” Note: “fault” here only applies to bodily injuries and associated costs (medical expenses, loss of wages) and does not apply to property damage (vehicle damage).

Now, all of this assumes both drivers carry at least their state’s minimum insurance—but we know that one in seven drivers does not. So what then?

Without uninsured motorist coverage, your only other form of possible compensation is the courts.

Uninsured Motorist Coverage

If you get into a crash with an uninsured driver, it’s likely that you’ll be dealing with someone who lacks (or is unwilling to disclose) financial means or proper identification, or is reluctant to undertake a task legally required by U.S. residents. In this case, uninsured motorist coverage is your best protection. If you don’t have uninsured motorist coverage, your only other form of possible compensation is the courts, but if the other party didn’t have the means to purchase auto insurance, the likelihood that they will be able to pay judgments (if you win) isn’t great.

Many states (21, plus Washington, D.C.) require drivers to carry uninsured motorist coverage, while other states don’t even offer it. And the coverage can vary widely. Ask your agent for details, and when shopping around, be sure to take note of what types of uninsured motorist coverage each potential insurer offers.

car wreck

How Collisions with Uninsured Drivers Affect Your Premium

Generally, if you’re truly not at fault in a crash, your rates won’t go up after a collision — even if you have to use your own uninsured motorist coverage. In fact, in most states, if you’re not at fault, it’s illegal for your insurer to raise your rates. However, some insurance companies might still consider the details of your collision and deem your driving habits as making you more likely to get in another incident, thus increasing their risk.

And DMV.org notes that the laws against surcharges for uninsured motorist claims usually only apply to the first time you find yourself in that situation. If it happens a second time during the same policy period, you might see a surcharge. So it’s a good idea to check with your insurance company or agent to understand the specifics in your state.

If the collision isn’t your fault and you do not have uninsured motorist coverage, your only real option is to sue the other party — or pay for damages out of pocket. You can always still make the claim and pay your collision deductible to pay for the damages, but the event will be documented as an at-fault accident and could increase your rates.

If the other party refuses to give info or drives off, know how to document the scene.

Worst-Case Scenario

If the other party refuses to provide their identifying information for whatever reason (they drive off, there are language barriers, they say they don’t have insurance or don’t want to share the information with you), the best thing you can do to protect yourself is to get as much information as quickly as possible. Some tips to document the situation:

  • Take pictures. Include the location and the condition of your car, and the scene including the other car, driver, and his or her car and plates (if possible to do so safely) to prove the collision took place.
  • Write down the color, make, model, and license plate of the other car and any details you can remember about the other driver.
  • Note the “when” and “where” of the crash — you will need to inform the police of the specifics, and you may wish to pursue security footage at a later time.
  • Look for witnesses and see if they’ll share their contact information to back your story.

The most important tip to remember when dealing with an uninsured driver: call the police. Even if the damage looks minimal, even if the other party asks you not to, calling law enforcement is your failsafe to protect yourself and your finances.

About The Author

Julia is a writer living in New York City. She's written hundreds of articles about the auto industry, from demystifying car insurance to exploring the latest vehicle technologies."

  • Kathy

    The uninsured driver by law is not there. A driver without a proper operators license is not there. I can not be held responsible for any accident they are involved with because they are not a legal driver. If they are at fault you can expect that you will pay. If you are at fault you will pay for everything! My proposal is that an illegal driver must assume all fault. They can not be concedered a damaged party because they by law can not be there. I would rather go to jail than pay for their illegal driving. The accident would not have happened except for their presence. Any fines or punishment does the legal drivers no good. Laws need to change.