|Here is a list of the difficulties a driver faces if they get into an accident without auto liability insurance. |
We will also include some free defense attorney tips for dealing with the problem if it already happened to you.
“No Proof of Insurance” Traffic Ticket Violation Following an Accident.
Every person with a California Drivers License is required to comply with California’s Financial Responsibility Law. (Vehicle Code section 16028.) Unless you post a cash bond with the Department of Motor Vehicles, this means drivers must have auto liability insurance.
Vehicle Code Section 16028 also requires drivers to carry proof of that liability insurance with them at all times while driving. A driver who has insurance, but fails to carry proof with them is actually in violation of the law and faces a fine. Although many judges will give people a break if they show up in court with proof of insurance that covers the date of the incident, the judge is not required to do so.
There are 2 main tips for dealing with this problem. The first is to get liability insurance coverage immediately. The second tip is to show up in court in person on or before the date listed on your citation with proof of insurance.
If you can appear in court in person with proof of insurance, there is a possibility you may get relief. A defendant accused of an auto insurance violation can appear for Arraignment or Trial with proof of insurance and ask the judge for dismissal. It may not happen, but there is nothing to lose. And you need insurance anyway, right? Maybe you can lock in a rate before that accident appears on your DMV Driver History Report.
As side from that, at the very least, if you have to pay a fine an in person court appearance makes it easy to ask for a payment plan and to make sure your citation does not melt into a “failure to appear” problem.
Many traffic citations for driving without valid auto insurance are issued after an accident, and are served upon the accused defendant by mail. If you are involved in an accident without insurance, make sure any responding officer(s) get your current mailing address to make sure the citation does not get ignored.
Uninsured’s Drivers License Is Suspended Automatically for 6 Months
When a person gets into an auto accident with damages more than about $500 (just about every accident), they are required by law to notify the Department of Motor Vehicles of the accident within 10 days, regardless of fault. DMV has a standard form for these notices, called an SR-1, and it requires the driver to tell DMV their insurance policy number. DMV then uses the form to contact the insurance company and verify that there was a valid policy.
If the Department of Motor Vehicles cannot verify the liability insurance for one of the drivers, (or if there is no report), there is an automatic 6 months Drivers License Suspension for the violator that cannot be challenged. The suspension applies regardless of who was at fault for the collision.
After an auto accident report, the DMV verifies the insurance coverage with the insurance provider. DMV does not rely on a driver’s paper proof of insurance after an accident. The policy must be valid on the date and time of the accident or the drivers license is suspended.
People caught driving on a suspended license face criminal charges (for example, a Vehicle Code section 14601.1 violation), 2 points on their driving record (same as a DUI), arrest, and impoundment of the car for 30 days.
The secret to dealing with a drivers license suspension following an accident without insurance is to report it to the Department of Motor Vehicles as soon as possible (same day) so that the suspension starts – and ends – as soon as possible. A delay in reporting to DMV only delays the suspension.
Uninsured Drivers Must Pay Legal Costs and Liability Damages Out of Pocket If They Get Sued and/or Found Liable.
Auto Accidents that result in injuries or property damage often produce lawsuits in civil court. The types of damages that are often claimed in court after an auto accident are:
1) medical bills, 2) compensation for pain and suffering, 3) lost wages; 4) loss of enjoyment of life; 5) property damages, etc.
Even in a small accident, these “Damages” can be thousands or tens of thousands of dollars.
Drivers who get sued in civil court for these damages will need professional legal help, or risk getting railroaded. If you lose one of these lawsuits, the court will issue a judgment that may be executed against your bank accounts, your wages (current and future), your house, and even your personal property way in the future.
When you buy an auto liability insurance policy, you get 2 very valuable protections against this problem that most people do not fully understand. They are called the benefits of:
1) Defense and 2) Indemnification.
These protections become very important if you are unlucky enough to be at fault in an accident – or if you get unfairly sued for an accident you did not cause.
“What? What does that mean? I thought that insurance means they pay for my damage?”
The benefit of “Indemnification” means that the insurance company (insurer) is required to pay for any damages you are responsible for up to the policy limits. When you have liability insurance coverage, if the court says you must pay, the insurance company must “indemnify” you for that loss up to the policy limits. That is what “Indemnification” means. The insurance company must pay for the damages the law says you are responsible for.
If the damages exceed your policy limits, then you have to pay the excess out of your own pocket. If you are uninsured and found liable for damages, you must pay it all out of your pocket.
And worse yet, if an injured person wins a civil judgment against you for an auto accident, the Dept. of Motor Vehicles will suspend your drivers license until the entire bill is completely paid off, even if it takes 20 years.
B. Defense Protection (Insurance Defense Attorneys).
If you get sued because of an auto accident for personal injuries, you will need help. There will probably be one or more plaintiff’s lawyers working very hard to make sure their damages are as high as possible, and to make sure they find all of your assets and money to collect. A person not trained as a trial attorney trying to deal with this alone has no chance of stopping the train.
If you have to hire a defense attorney to protect you from an auto accident lawsuit, they are going to charge you by the hour. A normal hourly rate for a defense attorney would be $150-200 per hour. And if the case drags on for 3 years (like one I have now) it would be a necessary expense that would completely bankrupt most people.
If you have auto liability insurance, most of the worries are over from the start. California Insurance Code law requires the insurance company to hire defense attorneys for you, and pay for their work in defending you against a covered claim.
The requirement that an insurer defend an insured driver following an accident begins even before a lawsuit begins. Under the requirements of California’s Fair Claims Settlement Practices Regulations, auto liability insurance carriers are required to try to settle legitimate claims for their insured drivers/owners before a lawsuit is even filed.
That’s right – the insurance company would have to hire attorneys to defend you, even if the accident was your fault. Even better, the insurance company must pay for them until the end of the case, even if it takes 3 years. And these defense costs are not deducted from the policy limits. There is essentially no limit on how much the insurance company must pay to defend you in a law suit.
Bottom line here is that Auto Insurance is prepaid legal fees for personal injury lawsuits against you. And when you understand that, you understand that the cost of auto insurance is always, always worth the money.
Without auto liability insurance, you are on your own if you get sued in civil or small claims court.
What should you do if you are sued for auto accident damages without insurance? This is a complicated subject that we will address in a different post, but there are some basic rules.
Rule #1 Hire an Attorney If At All Possible.
When you are being sued, there is a danger the court may seize your assets, money, or property. Licensed Attorneys are trained in dealing with these problems, and solving them by settlement whenever possible. Professional help is always a priority if you are being sued.
Even if all you can afford is a few hours of legal advice on your problem, or a few hours of attorney time to draft a proposed settlement agreement, professional help will help you end the problem correctly.
Rule #2 Do Not Ignore the Case If You Get Sued Without Insurance.
When defendants ignore lawsuits, it usually results in a default judgement for damages. A default judgement is almost always higher in value that a contested judgement.
Even if you have to appear in court alone, without an attorney after an auto accident lawsuit is filed against you, it is better than ignoring the case. Courts often have help available in some form for defendants who get sued for auto accident claims without insurance. Such services, in some courts, may include access to free small claims legal advisers, free law library access, free mediation services, free settlement conferences, etc.
Rule #3: Settle the Claim Before Trial If Possible.
The good news here is that all lawsuits over auto accident can be settled by agreement. Almost all auto accident lawsuits end by settlement or agreement of the parties. Even after a lawsuit is filed with the court and a court date is set, a case may be settled by agreement at any time.
If you agree that you are liable for damages, and can come to an agree with the opposing party for payment, you can settle a lawsuit over an auto accident yourself at any time before trial. If you do settle an auto accident claim or lawsuit yourself, make sure you get the complete agreement in writing – using an attorney that you hire if at all possible. Settlement agreements can also be made at a court hearing, and put in the official court record during the hearing. If you cannot have an attorney prepare a settlement agreement for you, getting a settlement on the record in open court is usually just as good an option.
Settlement agreements often contain terms for installment plan payments.
An Uninsured Driver’s Right to Recover Damages Is Limited By Law.
What if the accident was not your fault, and you were injured, but were also uninsured? California law puts limits on the damages an insured driver may recover following an accident. If you are uninsured, even if some rear ends you at 90 mph and paralyzes you, you cannot get paid for your pain and suffering, nor lost wages.
This is because “Prop 213″, also known as California Civil Code Section 3333.4 restricts drivers injured in a motor vehicle accident from recovering non-economic losses for compensation for pain, suffering, inconvenience, physical impairment, disfigurement, and other non-pecuniary damages if the injured person was not insured at the time of the accident.
So even if the accident was not your fault, but in an instant you are severely injured, a failure to simply buy auto insurance as the law requires can jack your life and bankrupt you and your family.
I hate to be so blunt about it, but in the opinion of this defense attorney, Auto Insurance is always, always, worth the money. When you buy auto insurance you are not only complying with the law, but you are paying someone else to take a risk that you cannot afford.
If you have those moments (like we all do nowadays) where you say to yourself “I cannot afford auto insurance” – take a deep breath and think for a second. In reality, you cannot afford to not have it. A lack of auto insurance can jack your life in seconds.
Questions? Leave a comment, we try to answer them all.