Most states have harsh penalties if caught driving without insurance, especially if you’re in an accident. States with “no pay no play” laws take it further by prohibiting uninsured motorists from being compensated for certain damages, even if they weren’t at fault for the accident.
Learn which states have “no pay no play” laws and what they mean.What is the ‘no pay no play’ law?
- No pay no play states prohibit uninsured drivers from making a claim for certain types of damage, usually pain and suffering after a car accident — regardless of who was at fault.
- Currently, 11 states have some form of no pay, no play law on the books.
- No pay no play laws are designed to encourage drivers to carry and maintain the auto insurance coverages required by state law.
What is the ‘no pay no play’ law?
“No pay, no play” law is a type of legislation enacted in some U.S. states that restricts the rights of uninsured drivers to seek certain types of damages if they are involved in an accident — even if they were not at fault.
These laws typically prevent uninsured drivers from claiming non-economic damages—such as pain and suffering—against insured drivers who are at fault for an accident. However, some states go even further and prevent uninsured drivers from claiming both economic and non-economic damages after an accident.
This law encourages drivers to purchase and maintain the state-required auto insurance. By restricting uninsured drivers from claiming these damages, the law aims to decrease the number of uninsured motorists and ensure that all parties involved in accidents are financially covered.
What are economic and non-economic damages?
Damages from an accident or injury can generally be classified into two categories: economic damages and non-economic damages.
Economic damages
Economic damages are quantifiable monetary expenses directly resulting from an injury or accident. It includes costs for hospital stays, doctor visits, surgical procedures, medications, rehabilitation services, and ongoing medical treatments.
If the injury affects the victim’s ability to earn money in the future, compensation for this loss can also be considered. Travel expenses to medical appointments, hiring help or caregivers, and any other out-of-pocket expenses related to the injury are also covered.
Non-economic damages
Non-economic damages refer to compensation for the non-monetary aspects of an injury. This includes compensation for physical pain and emotional distress, as well as the loss of enjoyment from hobbies and activities.
Which states have ‘no pay no play’ laws?
Currently, only a handful of states have no pay, no play laws in place:
Alaska
In Alaska, if you’re involved in a car accident while driving uninsured, you cannot claim “non-economic” damages, such as pain and suffering, from the driver at fault.
California
In California, there are three specific situations where a driver cannot claim non-economic damages following an accident:
- If the driver was under the influence during the accident.
- If the driver was uninsured.
- If the injured driver fails to demonstrate financial responsibility as mandated by state law.
However, this restriction does not apply if the at-fault driver was also under the influence at the time of the accident and is subsequently convicted of this offense.
Indiana
Indiana’s no-pay no-play law states that you won’t be able to claim “non-economic” damages (like pain and suffering) in a car insurance claim if:
- You were driving without insurance when the crash happened.
- You have a history of driving uninsured.
Iowa
In Iowa, driving without insurance does not restrict a driver’s ability to file a lawsuit. The only circumstance where a driver’s legal options are limited is if they are convicted of a felony that occurred during the accident.
Kansas
In Kansas, a driver can lose the right to sue for non-economic damages in two situations: if they fail to carry the required personal injury protection (PIP) insurance or if convicted of driving under the influence (DUI).
Louisiana
Louisiana’s no-pay, no-play laws specify that if a driver is uninsured during an accident, they lose the right to sue for:
- The first $15,000 of bodily injury damages
- The first $25,000 of property damage
However, this restriction does not apply if the at-fault driver was convicted of driving under the influence, intentional misconduct or fleeing the accident scene.
Michigan
If you were uninsured at the time of the accident and your case goes to trial, you cannot claim “non-economic” damages, such as pain and suffering, in court—even if you win the trial.
Missouri
In Missouri, driving without insurance means a driver forfeits the right to claim both economic and non-economic damages. The only exception is if the other driver was under the influence at the time of the accident.
New Jersey
New Jersey restricts drivers from claiming both economic and non-economic compensation under the following circumstances:
- Driving without insurance
- Driving under the influence of alcohol or drugs
- Driving with the intent of causing injury to himself or others
North Dakota
In North Dakota, if a driver has been previously convicted of driving without insurance, they are not allowed to sue for non-economic damages following an accident.
Oregon
Oregon’s no-pay no-play law restricts uninsured drivers from suing for non-economic losses such as pain and suffering. However, this law does not apply if the driver responsible for the accident was driving recklessly, driving under the influence or driving with the intent to cause the collision.
Are there any exceptions to the ‘no pay no play’ law?
There are exceptions to the “no pay no play” laws that allow uninsured drivers to recover damages even if the state generally restricts such claims. If the driver who caused the accident was under the influence of alcohol or drugs and is convicted, the uninsured driver may still be able to claim non-economic damages.
The uninsured motorist may also be able to claim non-economic damages if the accident was caused intentionally by the at-fault driver.
How do ‘no pay, no play’ laws affect uninsured drivers?
In a pay or play state, if you are driving without the required car insurance and are hit by another driver, you may not be able to sue the at-fault driver for pain and suffering or other non-economic losses. In some states, your ability to recover economic damages (medical and legal bills) may also be limited.
While in most pay to play states an uninsured driver will be reimbursed for their documented medical expenses — as well as issues like lost wages, home health care, transportation costs to medical appointments and other accident-related expenses — they will be unable to sue for pain and suffering or any non-economic damages.
While this may seem like an attempt to punish uninsured drivers, pay to play states claim the laws are put in place to encourage drivers to carry the proper amount of coverage and instill fairness to their insurance laws. Drivers that refuse to carry insurance should not be allowed to benefit from other drivers complying with the insurance laws of the state while denying that benefit to other drivers.
There is some proof that it works, a study from the Insurance Research Council (IRC) found that the uninsured motorist (UM) rate may fall by as much as 1.6% after a state puts a no pay, no play law in place.
It should be noted many states allow uninsured drivers to claim non-economic damages if the insured driver was under the influence at the time of the accident, driving recklessly or intentionally hit them. Laws vary by state so make sure you fully understand the pay-or-play statute in your state.
Final thoughts
Most states with ‘no pay no play’ laws only limit recovery on non-economic damages. This includes pain and suffering, mental anguish as well as loss of companionship. Economic damages, the uninsured motorist’s actual medical bills and property damage are usually recoverable.
States put ‘no pay no play’ laws on the books to reinforce driver compliance with state financial responsibility laws. The best way to avoid being affected by ‘no pay no play’ laws is to stay insured.
Resources & Methodology
Source
Connecticut General Assembly. “’No Pay, No Play’ Auto Insurance Laws.” Accessed August 2024.
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