What Happens if Two Vehicles Driving Without Insurance Collide?

A reader wrote in with this question: “I live in Minnesota and was recently hurt in a motor vehicle accident. The lady who hit me was driving without insurance and so was I. She admitted fault for the accident. What happens when neither party’s vehicle is insured?”

First, we’re sorry about your injury and hope you’re recovering. Physical injuries always complicate auto accidents, and that’s especially true when one or more party’s driving without insurance.

States fall into two categories when it comes to auto insurance: no-fault states and at-fault states. Minnesota is a no-fault state. So, your only choice may involve filing a personal injury claim with an attorney’s help against the other driver.

We’ll explain a little bit more about at-fault and no-fault states and how they assign liability for car accidents below.

What Happens When You’re Driving Without Insurance and Wreck in a No-Fault State?

Minnesota’s no-fault state status means it doesn’t matter who caused the auto accident. Each party’s insurance policy must pay for the damages to their own property, including any medical bills.

State law requires this no-fault insurance coverage because it pays for the following expenses after your car wreck:

  • Medical costs
  • Unpaid time off work
  • Auto repairs or replacement costs
  • In the event of death, $2,000 for funeral expenses

Minimum no-fault coverage in Minnesota is $40,000 divided up into $20,000 for medical expenses, $20,000 for property expenses. Of course, you can choose to purchase coverage that goes beyond these dollar amounts.

In addition, you can file a claim against the liable party if your damages exceed their policy amount. But in this case, both drivers involved in the crash were driving without insurance. For this reason, there are no insurance policies either driver can file a claim against to recover their damages.

Other states that are no-fault states include:

  • Arkansas
  • Delaware
  • Florida
  • Hawaii
  • Kansas
  • Kentucky
  • Maryland
  • Massachusetts
  • Michigan
  • New Jersey
  • New York
  • North Dakota
  • Oregon
  • Pennsylvania
  • Texas
  • Utah
  • Washington

Who Pays for Accidents in At-Fault States When You’re Driving Without Insurance?

At-fault states are also known as traditional or tort insurance cases. In states like these, the law says that police must hold someone responsible for each auto accident. Once they determine liability, the responsible person’s insurance policy must cover the following expenses:

  • Damage to the liable driver’s own vehicle
  • Repair or replacement costs for any other vehicles involved in the crash
  • Any medical expenses from car accident injury victims

If you don’t see your state in the bulleted list shown above, then you live in an at-fault state.

But if you’re in an accident in an at-fault state, the driver that admits liability pays for your medical bills. In most cases, that involves filing an insurance claim or suing the other driver’s insurer for those expenses.

Driving Without Insurance: What About Small Claims Court?

Because both of you were driving without insurance at the time of your accident and the other party admitted liability, you can file a lawsuit in small claims court.

In Minnesota, the technical term for small claims court is “conciliation court.”

Small claims court gives people an avenue to help recover money without an attorney’s help. You still appear before a judge and take part in a legal proceeding. However, it’s usually a much simpler format and less formal than a traditional hearing with attorneys representing either party.

Anyone may file a small claims court case. If either party is younger than 18, then a parent or legal guardian must also attend.

Here’s what else to expect if you take your case to Minnesota small claims court:

  • Each party must represent themselves when the judge calls them to do so.
  • You can only sue for money you can show a receipt for, nothing else. That means if you’re driving without insurance, you can’t get paid for things like pain and suffering.
  • $15,000 is the most money you can possibly win in Minnesota small claims court.

Even if You Win Your Case in Small Claims Court, You May Not Get Any Money

This assumes the other person driving without insurance has the funds to pay whatever amount the judge awards you. When someone cannot afford auto insurance, they’re equally unlikely to have the money to pay a small claims court settlement. In such cases, court records will show the amount the defendant owes you for driving without insurance. But you’ll have to find a way to collect any court ordered settlement, and that’s often quite difficult to do.

Your best bet, as usual, is talking with an auto accident attorney for free about your claim. Never assume you know what your outcome will be until and unless you do so!

Lisa Allen

Lisa Allen is a writer and editor who lives in suburban Kansas City. She holds MFAs in Creative Nonfiction and Poetry, both from the Solstice Low-Residency Program in Creative Writing at Pine Manor College. Prior to becoming a writer, Lisa worked as a paralegal, where she specialized in real estate in and around Chicago.