Car accidents involving uninsured drivers

If you don’t have car insurance, you could be responsible for large repair costs if you’re involved in an accident. Read this guide to understand what to do if you are an uninsured driver involved in an accident.

What does being uninsured mean?

If you, or the owner of the car, have not paid for any type of car insurance, you are uninsured. This means, if you cause a car accident, you will be responsible for repairs to your car and the other cars involved in the accident. 

If you have third-party liability car insurance, this means your insurer will pay for the repairs to the other cars involved in the accident (minus an excess). However, you are not insured for any damage to your own car.

Why is it an issue for consumers?

If you don’t have car insurance and you cause an accident, it can have a significant financial impact on you, especially if the other cars are expensive to repair (or replace, if the vehicle is written-off). 

Even if you are not at fault for the accident, you will need to spend time and energy engaging with the other drivers (including any insurer) to work out who was at fault, and to arrange the appropriate claim settlement. If there is a dispute about who was at fault, how much the repairs cost, or the value of the car, you might have to go to the Disputes Tribunal or District Court. You might also incur legal costs.

Car written off

Real life examples

Sarah’s* invoice dilemma       

After causing a car accident, Sarah received an invoice from an insurer for $4,327 to cover the costs to repair the other vehicle. Sarah was uninsured. Sarah agreed she should pay for the damage, but didn’t agree with the cost - she had obtained a quote from an independent panel beater for $1,400.

Sarah can provide her independent quote to the insurer and request it reviews its position. If Sarah is unhappy with the insurer’s response, she can make a claim in the Disputes Tribunal about the cost to repair the third-party vehicle. 

Cam’s* settlement issue

Cam’s car was hit by another car and was written-off. Cam was uninsured. The other driver admitted he caused the accident and had insurance. Cam was unhappy with the settlement offer of $3,000 from the other driver’s insurer, because he had purchased the car 6 months earlier for $4,200. 

Cam can pay for an independent valuation of his car and provide this to the third party’s insurer to review its offer. If Cam is unhappy with the insurer’s position, he can make a claim in the Disputes Tribunal about the amount he should receive to replace his car. 

Tim’s* liability dispute

Tim’s car was damaged in a 3-car pile-up. The third driver involved in the accident drove off and Tim does not know their details. Tim wants to hold the driver of the second car liable for the damage to his car. However, the second car’s insurer does not believe its driver was responsible for the accident. The insurer said it was the third, unknown, driver who was at fault. 

Tim can provide the insurer with the information he believes shows the second driver was at fault, including relevant police report details. If he is unhappy with the insurer’s response, he can make a claim in the Disputes Tribunal for a decision about who is at fault for the accident. 

*Names have been changed

Things to know about uninsured car accidents

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  1. Determining responsibility for car accidents

    Generally, the driver who accepts responsibility for the accident is considered “at fault” and is required to pay the costs to repair the damage to the cars. 

    If you are unsure if you are responsible for the accident, you should not accept fault at the time of the accident. You are able to dispute responsibility and seek a decision from the Disputes Tribunal, or District Court, if needed. 

    Factors that are relevant to confirming who is responsible for the accident include:

    • whether the drivers were complying with the General Road Code
    • details contained in any police report
    • other available information about how the accident occurred 
  2. What to do if you are uninsured and responsible for the accident

    If you are responsible for the accident, you will need to pay for the repairs to the other car/s. If the other driver/s are insured, their insurer may choose to repair their insured’s car and then require you to pay the insurer back for the cost of the repairs. 

    Steps you can take include:

    • Contact the other driver/s and ask if they are making an insurance claim. If they are, confirm the details of the insurer.
    • Email or write to the insurer to confirm details of its process. Provide any information you would like the insurer to consider as part of its claim decision. 
    • If the insurer (or other driver) sends you a bill for the third-party car, you can either:
      a) accept the bill and pay it. If you may have financial difficulty repaying the bill, talk to the insurer (or other driver) to discuss options; or    
      b) dispute the bill amount. You can request the information the insurer (or other driver) is relying on (including photos, assessments and quotes) and provide your own repair estimate from a qualified professional to challenge the bill. 
    • If you are unhappy with the amount you are being asked to pay, you can escalate the matter to the Disputes Tribunal if the bill is under $30,000. If it is over $30,000, you can make a claim to the District Court. However, you may want to take legal advice.
  3. What to do if you are uninsured and not responsible for the accident

    If the other driver is responsible for the accident, they must pay to repair any damage to your car. If the other driver has insurance, their insurer may pay for the repairs to your car. 

    Steps you can take include:

    • Contact the responsible driver and ask if they are making an insurance claim. If they are, confirm the details of the insurer. 
    • Email or write to the insurer to confirm details of its process. Provide any information you would like the insurer to consider as part of its claim decision. 
    • If you disagree with the insurer’s assessment of the damage or proposed settlement amount, you will need to get your own reports from a qualified professional and provide these to the insurer to challenge its decision. This could be a panel beater, mechanic or vehicle valuer.
    • If you remain unhappy with the proposed settlement, you can escalate the matter to the Disputes Tribunal if the settlement you would like is under $30,000. If the amount is higher than $30,000 you will need to make a claim to the District Court. However, you may want to take legal advice.

    If you took out a loan to buy your car, the insurer may choose to pay any settlement directly to the lender. 

  4. The IFSO Scheme cannot review complaints made by uninsured drivers

    The IFSO Scheme can only review complaints between drivers and their own insurers. If you do not have insurance, the IFSO Scheme cannot review a complaint between you and a third-party driver’s insurer. 

    You will need to engage with the insurer directly about the accident and escalate any issues through the Disputes Tribunal or District Court. 

  5. The Disputes Tribunal can consider disputes up to $30,000

    The Disputes Tribunal can help with disputes about car accidents and other vehicle issues, up to a claim amount of $30,000.   

    Contact the Disputes Tribunal directly for more information about your specific circumstances. 

    If your claim is more than $30,000, you may need to go to the District Court. However, you may want to take legal advice.

Tips to avoid problems

Take out car insurance

If you arrange comprehensive or third-party car insurance, you will have the support of your insurer if an accident occurs. This will minimise the risk of being personally responsible for paying for damage to other cars.  

Make detailed notes about the accident

As soon as possible after the accident, write down what you can remember. This could include:

* the location and time of the accident

* the driving conditions and any hazards

* your speed and the speed you think others were driving at

* your recollection of the accident and how it occurred.

This information will be helpful, because it could take some time before responsibility for the accident is established and the cars are repaired. 

Get advice and support about your circumstances

The Citizens Advice Bureau can help you understand your rights and obligations following a car accident. Citizens Advice Bureau provides support and information to uninsured drivers and can assist you in determining your next steps following an accident. 

The Citizens Advice Bureau is independent and its service is free. You can also contact Community Law for free legal advice.