What happens if you have a car accident without insurance?

Car accidents are stressful enough as it is, especially if someone is injured or it results in vehicle damage. But dealing with the expenses that must be paid after an accident when you are at fault with no insurance could be even more so.

Can I drive without insurance in Australia?

Driving without car insurance in Australia is illegal. Compulsory Third Party (CTP) insurance is legally required to register your car and is an included cost of vehicle registration in most states. It protects drivers against compensation claims made if you were to kill or injure someone in a road traffic accident.

But CTP insurance does not insure you for any damage caused to you or other people’s cars or property. To be protected against this, you could consider taking out Third Party Property insurance, Third Party, Fire and Theft insurance or Comprehensive car insurance. To learn more about what these types of insurance cover, see our summary here.

It’s also worth noting that driving without any car insurance, driving an unregistered vehicle, or not having proof of insurance could land you with expensive on the spot infringement notice fines and demerit points, with fine terms varying in each state. In New South Wales, for instance, the Roads and Maritime Services government agency stipulates you could be fined $659 for driving or parking an uninsured light vehicle on a road or road related area (effective 1 July 2017).

What happens if I was at fault in a car accident with no insurance?

Whoever is responsible for a car accident is typically the one required to pick up the bill, and in the case of people who are at fault and have no insurance other than CTP, you will likely have to pay for any damage out of pocket.

Covering costs of damages caused to the other driver could include the cost of repairing their vehicle, towing fees, the cost of a rental car while theirs is being replaced and the costs of replacing any damaged personal property.

What happens if the driver makes a claim against me after a car accident?

In the case the other driver thinks you are responsible/liable for a car accident, they may make a claim against you for any damage to their car or property. You may receive a letter of demand asking you to pay for the damage, in which case it could be worth seeking legal advice about whether you are fully or partially at fault.

According to Legal Aid Queensland, in the event you receive a letter of demand, you have the right to ask for evidence in the form of quotes or valuations of the amount of damage being claimed against you (called quantum). Once you have all the information, Legal Aid Queensland recommends negotiating with the other driver or their insurance company and getting legal advice. If an agreement can’t be met, you and the other driver may have to go to court.

It’s also worth noting you may be able to make a counter claim against the other driver if there is damage to your car and the other driver is partially responsible. Again, it could be worth seeking legal advice should you wish to pursue a counter claim.

According to Legal Aid Queensland, you may need legal advice following a car accident if:

  • there is a dispute about who is at fault (liability) or the amount of damage (quantum).
  • you are about to negotiate with the other driver or their insurance company.
  • both vehicles are damaged and you think the other driver may be partially at fault.
  • you are going to court because an agreement cannot be met.
  • there is a disagreement with a car insurer over your vehicle property damage claim.

Canstar rates and compares 50+ car insurers. It might be helpful to give yourself some peace of mind and compare your options to make sure you have the right level of cover for your needs on the road.

If you’re considering car insurance policies, the comparison table below displays some of the policies currently available on Canstar’s database for a 30-39 year old male seeking cover in NSW without cover for an extra driver under 25. Please note the table is sorted by Star Rating (highest to lowest) followed by provider name (alphabetical) and features links direct to the providers’ website. Use Canstar’s car insurance comparison selector to view a wider range of policies.

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