What to do if You are in a Car Accident with a Person that has No Insurance

You have been in a car accident with a person that does not have insurance; now what?

Transcript:

Hi. I’m Jared Richards. I’m one of the attorneys here at Clear Counsel Law Group. One of our readers has asked what to do if they have been in a car accident and it turns out that it’s not their fault. It’s the other side’s fault. The other side has no insurance and there is no underinsured motorist coverage. I’m not sure there’s much to do. You may be in trouble.

A couple of things we want to make sure is that the other side, the person who hit you, doesn’t have assets sufficient to cover your claim. Most people don’t, unfortunately. Nevada has certain laws, I think of them as the bankruptcy laws. It’s really laws against enforcing a judgement and what that means is let’s say we are taken to court. We’re to go all the way to get a court to issue a judgement saying that the person who hit you owes you $20, 30, 40, 50,000. Insert your number. It doesn’t really matter. Nevada has laws that say we can only collect against certain property of the defendant. Usually, as a general basis, that means that we can only collect 25% of their take home income after deducting minimum wage.

That might not be a lot of money. People get to protect $15,000 in equity in their car, up to $500,000 in equity in their house, about the same amount in an IRA, unlimited amount in a life insurance policy or an annuity. For most people, it’s very difficult to collect and so there may not be much to do. Most of the time in that situation, it’s not worth suing.

That leads to another interesting question and an important question and that is what kind of insurance should you have. First of all, you need to have health insurance. If you were injured in that accident, you need to have that health insurance to get the treatment that you need. Unfortunately, health insurance is not going to cover certain things. It is not going to cover your pain and suffering. It’s not going to cover your lost income. That’s where we get into two other very, very, very important types of insurance.

The first is life insurance. Heaven forbid, you were to die in an accident and your family is relying on you as a bread winner. This is where having your own life insurance policy makes a whole lot of sense. They’re generally not very expensive if you get term and if you are responsible for a family, then you really need to consider having it.

The second is underinsured motorist coverage. This is also extremely important. I would encourage everybody and I understand there are budgetary issues that some people just cannot find room in their budget. Sometimes it’s not their fault. Sometimes it’s because of bad budgeting and sometimes it’s really not there fault. There’s just no room. One, I would encourage everybody to have more than the state minimum insurance levels. Really, I would like to see everybody at a least $100,000 of coverage or more. I’d prefer more but at least $100,000.

Second, I would encourage everybody, everybody, to purchase underinsured motorist coverage. Underinsured and uninsured motorist coverage is so very important. The point is that if you’re driving around you cannot rely on the person that hit you to do the right thing because we have so many who are uninsured and so many that are insured at minimums, at state minimums. $50,000 when we are dealing with medical bills does not go a very long ways and so I would encourage everybody to have at least $100,000, I’d prefer $250,000, of coverage both on liability and on underinsured motorist coverage.

In case I didn’t talk about it before, underinsured motorist coverage is that coverage that’s going to kick in once the other side’s policy has paid out. Uninsured motorist coverage, it’s the same thing. It’s just that the other side has no coverage. Your own coverage is going to come in to cover your injuries, your pain and suffering, your lost income. Please don’t drive around assuming everybody else is doing the right thing and you should protect yourself. Thanks for watching and as LeVar Burton would say, we’ll see you next time.

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