Normally when you have a lease or loan on a vehicle, which it sounds as if you do, your financial paperwork mandates that you not only need to keep the state required minimum liability insurance on the vehicle but also physical damage coverages of collision and comprehensive.

Unfortunately if you were driving without the required insurance on your vehicle and were at-fault in the accident then you will be left to pay off the vehicle as the terms of the loan agreement state. Since the bank (lien holder) no longer has an asset as collateral, the car, it appears they have given you 2 options in which to pay off on the vehicle. If you are unable to take care of the loan in either of these ways you may want to get legal counsel to find out if you have any other options.

If you are able to obtain another car, make sure to have insurance placed on it so that you will not be left in this situation again in the future. You can get an affordable insurance quote here.