I just learned about the no pay, no play concept regarding car
insurance claims. Can you elaborate on it and tell me what states
have this type of law in place?
Most states have harsh penalties in place if you're caught
driving without insurance
, especially if you're in an accident. States with "no pay,
no play" laws take it a step further by prohibiting uninsured
motorists from being compensated for certain items, even if they
weren't at fault for the accident. (See "
Uninsured? No gain for your pain
No pay, no play states want to draw attention to the fact that
they are limiting uninsured motorists from receiving certain
compensations because they themselves wouldn't be able to provide
those same benefits to others.
Currently, there are 10 states that have some sort of no pay, no
play law in place. They are:
- New Jersey
- North Dakota
The list may grow soon as lawmakers in Missouri, Nevada and
Texas contemplate proposals that would amend their laws to limit
the compensation one could receive if a driver is uninsured at the
time of an
Most states with no pay, no play limitations on car insurance
claims (and lawsuits) are only on noneconomic damages. This
would include items such as pain and suffering, mental anguish and
loss of companionship. Economic damages, the uninsured
motorist's actual medical bills and property damage, are typically
There are small differences in each state though. Here are a few
In Kansas if you've been uninsured less than 45 days and had car
insurance for the full year prior to the lapse, then you can still
seek compensation for economic and noneconomic damages.
New Jersey's law bars those who are driving without insurance
and are injured, driving under the influence, or acting with intent
to injury to himself or others while operating a vehicle from
recovering for economic or noneconomic losses.
In North Dakota, you're unable to recover for pain,
inconvenience, suffering and other noneconomic damages if you're
found to be uninsured at the time of the accident and you've had
one prior conviction for driving without insurance.
Louisiana is special because it doesn't allow
(besides a few exceptions) to receive compensation for the first
$15,000 in damages for bodily injury and first $25,000 for property
damage. These "no pay, no play deductible amounts," as some
term them, are equal to the state-required minimum bodily
injury and property damage liability coverages for
Oklahoma's current no pay, no play law prohibits those not in
compliance with the state's mandatory auto insurance law from
recovering for noneconomic damages related to auto accident
injures. However, a bill is being considered that would keep
uninsured drivers from receiving compensation for "any type of
damages" unless special circumstances existed, such as the at-fault
driver was driving under the influence.
States intend no pay, no play laws to reinforce that all drivers
need to comply with state financial responsibility laws. And
the Insurance Research Council has estimated that the states
adopting such laws are seeing a drop in their uninsured motorist
The best way to not be affected by no pay, no play laws is to
stay insured. If your current auto insurance rates are too
high, look for ways to save (See "3 ways to save big on car
insurance") and shop around before dropping coverage completely and
getting yourself into a bad situation.