No car insurance? No big payoff for you.
You may be blameless for the accident and wracked with agony afterward, but in many states, you can't get a check for pain and suffering.
"No pay, no play" laws allow you to be compensated for your actual losses, such as medical bills, property damage and lost wages. But noneconomic damages -- for pain, emotional distress, loss of companionship and other intangibles -- are off the table.
Right now 10 states have such laws on the books: Alaska, California, Iowa, Kansas, Louisiana, Michigan, New Jersey, North Dakota, Oklahoma and Oregon, though details differ from place to place. Nevada is now the latest state considering a limit on financial claims if you don't carry the minimum auto insurance required by law.
"We love no pay, no play, just on the basis of fairness," because it prohibits uninsured motorists from suing for noneconomic damages, says Alex Hageli, director of personal lines policy for the Property Casualty Insurers Association of America.
"If you haven't been responsible enough to obtain insurance, you shouldn't take advantage of someone else" who did adhere to auto insurance laws.
Pain and suffering: $5
Traditional damages are usually easily quantified: A car repair bill, a month of lost wages or the cost to treat a broken bone is verifiable or can be accurately estimated. Noneconomic damages put a price tag on anguish, long-term pain and disfigurement -- one that is vulnerable to a jury's sympathies.
Behavioral economists George Loewenstein andPeter Ubel estimate that only 40 percent of a typical pain and suffering award is directly attributable to the severity of the injury. The rest, they said, can be influenced by the race, gender and even the attractiveness of the victim.
No pay, no play laws remove that wild card for those driving without proper insurance coverage. The benefit, one study found, can be not only cheaper car insurance premiums but also fewer uninsured motorists.
The Insurance Research Council (IRC) reported late last year that states adopting a no pay, no play law saw a decrease in their uninsured motorist rate of as much as 1.6 percent. (The IRC says the rate of uninsured motorists ranges from 28 percent in Mississippi to below 5 percent in Maine and Massachusetts, with the national average at 13.8 percent.)
The results came as a surprise to IRC researchers, says Patrick Schmid, the organization's director of research. "We didn't expect uninsured motorist to immediately respond to the laws being put in place."
The cost of paying noneconomic damages to uninsured motorists was about $17.5 million per state in 2007, the group said. In Florida, the state with the most claims, every insured driver paid about $15 extra to cover pain and suffering payouts to uninsured drivers.
Nationally, the average was about $5, the IRC said.
There are always exceptions
Some states with no pay, no play laws still allow uninsured motorists to sue for noneconomic damages after an accident under certain circumstances.
In Louisiana, for example, an uninsured driver can't collect the first $15,000 of bodily injury damages and $25,000 in property damages -- but those limits don't apply if the wreck occurred when the at-fault driver had been involved in a felony, was driving under the influence, intentionally caused the accident, or fled the scene of the wreck.
In Kansas, an uninsured motorist can still seek noneconomic damages if he had auto insurance within 45 days of the accident.
Your state's department of insurance will have specifics.
While car insurance or some sort of financial responsibility is a requirement in every state, no pay, no play laws are only one of several methods used to crack down on uninsured motorists.
Some states require proof of insurance at registration time, some check randomly, and others have set up real-time verification systems that allow law enforcement officers to check on current coverage during traffic stops. Hageli says the efforts have proved ineffective.
Even in states with the highest rates of uninsured motorists, more than 70 percent of the population fulfills its responsibility and purchases car insurance, he says. That means time and effort is invested in trying to keep track of the bulk of the population, which obeys the law, rather than focusing on those who flout the law.
The costs of those systems are then passed on to those who actually have auto insurance, Hageli says.
No pay, no play laws "don't require an active enforcement mechanism so there are no costs associated with it," he says. "It's a simple, fair concept."