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What Does No Pay, No Play Mean Regarding Auto Insurance?

two men standing by two wrecked cars

No Pay, No Play statutes limit or restrict the rights of uninsured motorists to financially benefit from lawsuits for accidents caused by drivers who are carrying the legal amount of car insurance.  

These ordinances aren’t in every state in the U.S., and the details vary from state to state where these laws are in effect. But basically, it means that you can be restricted from receiving financial settlements for accidents that are the fault of someone else when you are behind the wheel without carrying a valid car insurance policy. 

Let’s take a closer look. 

What Does No Pay, No Play Do? 

It’s a way of encouraging all drivers to always have auto insurance by removing the uninsured driver’s ability to financially gain in various ways from an accident that was the fault of another driver. 

It plays out in different ways in different states, but imagine the following scenario: a drunk driver plows into several cars on a highway and sets off a dozen chain reaction accidents. Several drivers were hurt, and they successfully sued the insurance company of the at-fault driver. However, one of the victim drivers is unable to participate in the lawsuit because the victim is an uninsured motorist. Therefore, this driver is unable to join in any financial settlement along with the others who were injured. 

In many cases, No Pay, No Play prohibits uninsured drivers from receiving any compensation from the at-fault driver’s insurance company for basic property damage (damage to their vehicle) and any injuries or medical bills. 

Why Are No Pay, No Play Statutes in the Books? 

The purpose of the No Pay, No Play laws is to encourage all drivers to get and maintain car insurance. While this form of coverage is mandatory in all but two U.S. states, many drivers disregard it and drive while uninsured. It’s estimated that in some states, as many as roughly 25 percent of motorists are not carrying auto insurance. 

The thinking behind No Pay, No Play state laws is that these individuals who have illegally opted out of the system, making insurance most costly for drivers complying with insurance regulations, should not be able to benefit from a settlement — or, in some states, be at least partially restricted from benefiting. 

What States Carry No Pay, No Play Laws? 

Currently, you’ll find variations of this statute in these 11 U.S. states: 

  • Alaska 
  • California 
  • Indiana 
  • Iowa 
  • Kansas 
  • Louisiana 
  • Michigan 
  • Missouri 
  • New Jersey 
  • North Dakota 
  • Oregon 

Each of those states has different rules and regulations regarding how it treats drivers with no insurance. For instance, some states simply restrict uninsured drivers from receiving non-economic damages. 

Non-economic damages compensate for such non-tangible losses as pain and suffering. In some states, uninsured motorists can still receive settlements to cover tangible costs like medical bills and lost wages. 

two women on phone after car accident

Are No Pay, No Play Laws Unconstitutional? 

As mentioned, different states have different interpretations of what no play, no play involves. While those laws have been challenged in several states, so far, only one U.S. state — Oklahoma — has declared these laws to be in violation of its constitution. 

The most common charge against these laws is that the state is placing a statutory cap on claims received solely by one class: uninsured drivers. Keep in mind, in most states, it’s only non-economic damages, such as pain and suffering, kept from uninsured motorists. They can still qualify for reimbursement of economic damages, such as medical care or lost pay. 

How Can No Pay, No Play Penalties Be Avoided? 

Avoiding penalties is easier than you might think. Only uninsured drivers are subject to financial penalties in No Pay, No Play states. Therefore, carry auto insurance, and you won’t ever be subject to these regulations even if you live in a No Pay, No Play state. 

Cost is the reason most drivers don’t have car insurance. Motorists who’ve had multiple moving violations, been cited for driving without insurance, one or more DUI convictions, or who have their licenses suspended are likely to be classified as high-risk drivers. This means they are required to pay much higher rates for car insurance than drivers with clean records. 

In many cases, the cost of coverage becomes so high that drivers decide to take the economic risk of driving without insurance. 

Your independent insurance agent can help you shop for cheap car insurance. Though these policies only offer minimal coverage benefits, they satisfy most states’ requirements for having insurance. This coverage will also protect you from the No Pay, No Play statutes in every state. 

Find Low-Cost Car Insurance Online Today 

Depend on our independent insurance agents to help you obtain affordable car insurance so you can avoid the No-Pay, No-Play laws. Call Freeway Insurance at (800) 777-5620 or get a quick car insurance quote online. You can also find an office location near you and talk directly with one of our agents. 

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