Question: What is the no pay, no play car insurance law, and what states have this type of law in place?

Answer: 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.

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.   

Here are the 11 states with some sort of no pay, no play law in place

Most states with no pay, no play limitations on car insurance claims (and lawsuits) are only on non-economic damages. This includes pain and suffering, mental anguish and loss of companionship. Economic damages, the uninsured motorist’s actual medical bills and property damage, are typically still recoverable.

States intend for 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 rate.

There are small differences in each state though. Here are a few examples:

  • 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 non-economic damages.  
  • New Jersey’s law bars those who are driving without insurance and are injured, driving under the influence, or acting with intent to injure himself or others while operating a vehicle from recovering for economic or non-economic losses.
  • In North Dakota, if you’re found to be uninsured at the time of the accident and you’ve had one prior conviction for driving without insurance, you’re unable to recover for pain, inconvenience, suffering and other non-economic damages.
  • Louisiana is special because it doesn’t allow uninsured drivers (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 liability coverages for motorists.  

The list of no pay, no play states was reduced by one when, in late 2014, the Oklahoma Supreme Court found its state’s no pay, no play law unconstitutional. It requires special treatment of uninsured accident victims — not allowing them to collect on pain and suffering — and the court ruled that a special class created in this manner is a violation of the Oklahoma Constitution.

However, the list may soon grow again as more states, such as Nevada, contemplate proposals by lawmakers that would amend their laws to limit the compensation one could receive if uninsured at the time of a car accident.

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, compare car insurance and look for ways to save before dropping coverage completely and getting yourself into a bad situation.

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Penny Gusner
Consumer Analyst/Insurance Expert

Penny has been working in the car insurance business for more than 10 years and has become an expert on procedures, rates, policies and claims. She has seen it all, and working with from its inception, she researches the routine and the bizarre with equal enthusiasm. She has three very active children and a husband with a zeal for quirky cars.