What are “no pay, no play” auto insurance laws?
"No pay, no play" auto insurance laws mean that drivers without car insurance cannot receive a payout from an insurance company, even if they aren't at fault for the accident.
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UPDATED: Apr 25, 2022
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Certain states have something called “no pay, no play” auto insurance laws. In these states, drivers must abide by certain rules in order to qualify for insurance coverage.
When a state has “no pay, no play” auto insurance laws, it means the driver is required to have insurance in order to receive a payout from an insurance company – even if the accident was not the driver’s fault.
In other words, if somebody rear ends you at an intersection, and you don’t have insurance, then you will not receive any compensation for the collision – even though the other driver was at-fault and has insurance.
11 states across America have no pay, no play auto insurance laws. Let’s take a closer look at how these laws work and what they mean.
How do “no pay, no play” auto insurance laws work?
All states except New Hampshire require drivers to carry auto insurance to legally drive on the road. It’s illegal to drive without basic liability insurance. Despite the fact that it’s illegal, however, approximately 1 in 7 drivers in the United States do not have car insurance.
What happens when a driver without car insurance gets into an accident? It depends on where the driver was at-fault or not at-fault:
States Without No Pay, No Play Insurance Laws:
You Are the Uninsured Driver in an At-Fault Collision: If the uninsured driver was at-fault for the accident, then the at-fault driver is required to pay for all liable property damage and bodily injuries out of pocket.
You Are the Uninsured Driver in a Not At-Fault Collision: If the uninsured driver was not at-fault for the accident, then the uninsured driver can make a claim through the other driver’s insurance company.
States With No Pay, No Play Insurance Laws:
You Are the Uninsured Driver in an At-Fault or Not At-Fault Collision: In states with no pay, no play insurance laws, the uninsured driver is prohibited from claiming certain damages after an accident regardless of who was at-fault.
If you are in a state with no pay, no play statutes, then things change. In 11 states, uninsured drivers are forbidden from claiming car insurance payouts in any situations.
They’re called “no pay, no play” laws because drivers aren’t paying for car insurance (“no pay”) and therefore cannot claim any benefits from car insurance companies (“no play”).
Because of these laws, uninsured drivers do not have the right to recover damages even in a situation where they would normally be able to do so. If someone slams into your car at an intersection, totals your vehicle, and sends you to the hospital, then you will not receive an insurance payout. You do not have the right to recover certain damages – like medical expenses, lost wages, and car repairs – that you would normally be able to claim.
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No Pay, No Play Laws Vary Between States
Different states have different rules regarding no pay, no play laws. Some states allow drivers to recover economic damages – like payment for medical bills and car damage – but not non-economic damages – like pain and suffering.
Other states have strict no pay, no play laws, preventing uninsured drivers from claiming anything after an accident.
Some states also make exceptions for situations where the uninsured driver was injured by an intoxicated driver in an at-fault collision. If you are struck by an intoxicated motorist, for example, then you may be able to receive insurance compensation even if you’re uninsured in a no pay, no play state.
Other states have totally different no pay, no play laws: they allow uninsured drivers to file a claim against the at-fault driver, but you cannot make a claim if you were driving under the influence at the time of the accident.
Some states implement no pay, no play laws in a different way: they require the uninsured driver to pay a really high deductible (typically around $10,000) before the uninsured driver can sue for property damage.
Ultimately, no pay, no play laws vary widely across the United States.
Which states have no pay, no play auto insurance laws?
Over the last two decades, a growing number of states have implemented no pay, no play insurance statutes. Here is a list of 11 no pay, no play states:
More states are considering adding no pay, no play laws. Minnesota and Montana have all made efforts to pass no pay, no play laws in the past, for example.
No pay, no play laws are built on a simple premise: drivers that don’t purchase insurance should not receive benefits from drivers that do purchase insurance. Because of no pay, no play laws, uninsured drivers may be unable to collect certain damages after an accident – even if the uninsured driver was not at-fault.
If you have legal car insurance, then no pay, no play laws are unlikely to affect you. If you are uninsured, however, then no pay, no play laws could prevent you from seeking compensation after an accident. Compare auto insurance quotes online today to ensure you remain unaffected by no pay, no play car insurance laws.