Letting your automobile insurance lapse has significant consequences. Of course, there are fines to pay, but few know about the other consequences associated with letting your insurance lapse.
What I recently had to explain to a client is that if you are driving an uninsured vehicle and you are involved in an accident, you are not permitted the file a lawsuit against the negligent person for any damages. The client who recently consulted me had not paid her insurance premiums, causing the coverage to lapse. She was driving her car and, according to her, was being extra careful. She was sitting at a red light, minding her own business, when a driver, who was texting while driving, came up from behind and crashed into her car. The other driver received a ticket for careless driving but she also received a ticket for the insurance coverage violation. She paid the ticket but tried to have her car fixed through the negligent driver’s insurance company. That’s when she learned that she is barred from collecting any damages that are due to her. She was also injured, but was unable to pursue a claim for pain and suffering as well.
It should be noted that there is a statute which clearly states that an uninsured driver may not file a lawsuit for damages suffered while operating an uninsured automobile. The Supreme Court of New Jersey is currently considering an appeal which raises an issue under that statute. In one case, the uninsured driver died from injuries he sustained in the automobile accident which was no fault of his. His family, however, filed a claim for pain and suffering, on his behalf under the Survivor Act. This claim was dismissed by the Trial Court and the Appellate Division affirmed that dismissal. The family of that uninsured driver also filed a claim under the Wrongful Death Act which claims damages for the dependents left behind. Both Courts determined that the Wrongful Death Claim is not barred by the Statute. We will soon see how the Supreme Court views that issue, however, at this time, there is nothing barring a Wrongful Death Claim where the deceased was an uninsured driver.