How to Cover the Costs of a Car Accident Without Insurance

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Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

two cars in an accident

If you’re caught driving without insurance (or an up-to-date policy), you could temporarily lose your license, receive a traffic ticket, and face a large fine, depending on your state’s laws.

The chances of this happening might be stronger than you’d think. One in 8 drivers don’t have insurance, according to a 2017 study by the Insurance Research Council. Plus, some states either don’t require you to have insurance or offer alternatives.

Here’s what to do if you find yourself on the hook for hundreds or thousands of dollars in damage after being in a car accident without insurance.

Beware getting into a car accident without insurance

If you’re in a car accident without insurance, it’s important to know what to do at the accident scene and what to do in the aftermath.

If you damage your car or suffer an injury from an accident, you could be left dealing with auto repair and medical bills.

Some states have “No Pay, No Play” rules, meaning that if you don’t have insurance, you can’t collect money in certain instances — even if the accident wasn’t your fault. The situation gets pricey when you’re at fault and the other driver suffers an injury or damage to their car.

If their bumper suffered a minor scratch or dent, you could work out payment yourselves and avoid filing an auto insurance claim. But in more serious accidents, the insured driver could pin their costs on you. That’s because many states hold the at-fault driver responsible.

Without a policy, you could be asked to pay thousands of dollars to make the other driver (or their insurance company) whole. You’d be wise to consult an auto insurance specialist or car accident attorney to examine your options.

If you live in one of a dozen states offering no-fault insurance, you could be off the hook for the other driver’s costs. In these states, the driver would be required to lean on their insurer to cover their costs. They likely wouldn’t be able to sue you for damages in most cases.

How to cover the costs of a car accident without insurance

When you’re facing a stack of bills after a car accident, there are ways to pay them without ruining your finances.

Figure out exactly how much money you need for only the most necessary expenses after the car accident. You would prioritize paying another driver’s insurance company over touching up your car’s paint job.

Once you have a list of amounts owed, set a timeline. If another driver’s insurance company billed you $1,000, ask about the due date. You can also look into negotiating a payment schedule.

Check your budget to see if you could cover these costs by the required due date. If you work out a schedule for your bills, you could set aside part of your monthly income. You could also start a new side hustle to generate extra cash if there’s enough time.

Consider borrowing to pay for your car accident costs

Only after looking for room in your budget and squeezing some savings out of your paycheck should you consider borrowing money to cover your car accident costs.

You could borrow money from family members, but that could come with its own set of challenges, including straining relationships. If that’s not an option, an unsecured personal loan is a possibility.

Offered by banks, credit unions, and top online lenders, an unsecured personal loan could net you the amount of money you need without putting up any collateral in the process.

You would be quoted an interest rate and repayment term on your loan amount after the lender has reviewed your credit history and debt-to-income ratio, among other factors. The stronger your application, the better loan terms you could secure.

It’s possible to get personal loans with low credit scores, or personal loans with fair credit. You could also bring on a more creditworthy cosigner who’ll agree to repay the loan if you can’t.

Without a cosigner, a lender could hand you a high interest rate that makes your repayment plan more difficult or more costly.

Say you need to borrow $15,000 because of a serious car accident, and your excellent credit qualifies you for a 6.00% APR. With a five-year repayment term, your monthly payment would be $290, and you’d pay $2,400 in interest.

Now say your so-so credit instead nets you an APR of 12.00%. In that case, your monthly payment would balloon to $334, and you’d shell out $5,020 in interest.

Even if you’re considering borrowing a much smaller amount, avoid resorting to quick fixes such as risky payday loans.

With higher interest rates and shorter repayment terms than personal loans, you could find yourself in another jam. After getting into a car accident with no insurance, you should avoid fixing one mess by creating another.

Once you settle up, consider buying the right amount of insurance to protect you and your car in the future.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal LoansFixed rates from 6.199% APR to 15.365% APR (with AutoPay). Variable rates from 6.145% APR to 14.685% APR (with AutoPay). SoFi rate ranges are current as of June 15, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.145% APR assumes current 1-month LIBOR rate of 1.97% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. Terms and Conditions Apply:SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.73% – 29.99%$1,000 - $50,000
Check rate nowon SLH's secure site
6.15% – 15.37%1$5,000 - $100,000
Check rate nowon SLH's secure site
6.87% – 35.97%*$1,000 - $50,000Visit Upgrade
8.00% – 25.00%$5,000 - $35,000
Check rate nowon SLH's secure site
4.99% – 29.99%$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%2$5,000 - $50,000Visit Citizens
15.49% – 34.49%$2,000 - $25,000Visit LendingPoint
5.99% – 35.89%$1,000 - $40,000Visit LendingClub
5.49% – 18.24%$5,000 - $75,000Visit Earnest
9.95% – 35.99%$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.