All states require vehicle owners to have some form of financial responsibility in place if they want to drive a vehicle on public roads. Most states simply require vehicle owners to carry a minimum amount of car insurance, while a few states give drivers the option of paying a fee or posting cash or bonds instead of purchasing an insurance policy.
Despite these laws, many drivers take their chances and drive without car insurance or proof of financial responsibility. According to the Insurance Information Institute, about one out of every eight drivers in the United States is uninsured. One way states have cracked down on this problem is by enacting laws restricting an uninsured driver's ability to recover compensation after a car accident. Read on to learn more about these so-called "No Pay, No Play" laws.
The Basics of No Pay, No Play Car Insurance Laws
There are currently 11 states with some version of a "No Pay, No Play" law on the books. In most of these states, these laws prevent an uninsured motorist from suing another driver for non-economic damages, such as pain and suffering, after a car accident. This prohibition still applies when the uninsured driver was not at fault for causing the accident, and it's a consequential one, since compensation for pain and suffering often makes up a large part of a car accident claimant's damages.
A few states also apply the "No Pay, No Play" laws to other drivers who are violating the law, such as someone who was committing a felony or driving under the influence of drugs or alcohol at the time the accident occurred.
Some states restrict the uninsured driver not only from suing for non-economic damages, but economic damages as well (these include things like medical bills and lost wages; learn more about economic versus non-economic damages). Other states allow the uninsured driver to sue the at-fault driver, but only if damages reach a certain amount or if the at-fault driver was under the influence of alcohol or drugs.
"No Pay, No Play" laws aim to prevent uninsured drivers from benefiting from the very system they’re refusing to participate in. The argument here is that it would be unfair for an uninsured driver to recover the full spectrum of damages from someone else’s insurance coverage, when the uninsured driver hasn't paid for his or her own mandatory coverage. In other words, "No Pay, No Play" laws are a legislative declaration that, when it comes to making a car insurance claim and benefiting from the car insurance system, it should be a two-way street.
Here's a list of the 11 states that have some form of a "No Pay, No Play" car insurance law:
- North Dakota
- New Jersey
- Iowa (Iowa’s "No Pay, No Play" law only applies to drivers injured in an automobile accident during the commission of a felony.)
All 11 of these states bar the recovery of non-economic damages by uninsured drivers or drivers committing a felony. However, New Jersey, Michigan and Louisiana also bar the recovery of economic damages by uninsured drivers involved in a car accident.
Louisiana is unique in that the injured uninsured driver may not recover for the first $15,000 in personal injuries or the first $25,000 in property damage. It’s no coincidence that $15,000 and $25,000 are the car insurance minimums in Louisiana for individual bodily injury and property damage.
Exceptions to No Pay, No Play Car Insurance Laws
Many states will still allow an uninsured driver to sue the person responsible for the car accident in certain situations. For instance:
- In Oregon, the uninsured driver can still sue if the at-fault driver was committing a felony or acted recklessly or intentionally.
- In North Dakota and Indiana, the uninsured driver will only be barred from suing the at-fault driver if they also have at least one prior violation of their state’s financial responsibility laws.
- In Missouri and California, the uninsured driver can sue if the at-fault driver was under the influence of drugs or alcohol at the time of the accident.
- In Louisiana and Alaska, the uninsured driver can sue if the at-fault driver was under the influence of drugs or alcohol, acted intentionally, or fled the scene of the accident.