Getting into a car accident is stressful enough, but the situation can quickly feel much worse when the other driver admits they don’t have insurance.
Many drivers panic in this scenario, assuming they will be left paying for the repairs themselves or forced to navigate a lengthy legal battle just to fix their car.
Fortunately, the insurance system is designed to protect you when this happens. Here is what you need to know if you are ever hit by an uninsured driver.
How Your Insurance Protects You
If you are involved in an accident with someone who doesn’t have insurance, your own auto policy steps in to cover the damages.
In Canada, standard auto insurance policies include a mandatory section called Uninsured Automobile Coverage. This coverage is specifically designed to protect you if you are injured or your vehicle is damaged by an uninsured or unidentified driver.
Instead of trying to collect money directly from the at-fault driver, you simply file a claim through your own insurance company, much like you would in a "no-fault" insurance system. Your insurer pays for your vehicle repairs up to the limits of your policy.
Do You Have to Pay a Deductible?
Whether you pay a deductible depends on a few factors, including your province and whether the uninsured driver can be identified.
If the uninsured driver remains at the scene and is identified by the police, you often will not have to pay your deductible. However, if the driver flees and cannot be identified (a hit and run), you will typically need to use your Collision coverage, meaning your deductible will apply.
Will This Make My Insurance Go Up?
One of the biggest concerns people have is whether filing this claim will increase their insurance rates.
Generally, if you are 100% not at fault for the accident, your base premium will not go up just because you used your Uninsured Automobile Coverage. However, if the accident was a hit and run and you use your Collision coverage, some insurers may adjust your claims-free discount.
The Part Most People Miss
A major detail that people often miss is the importance of a police report.
To successfully file an uninsured motorist claim, your insurance company needs proof that the other driver actually lacked insurance. If you do not call the police to the scene, or if you wait too long to file a report at a collision centre, your insurer may treat the claim as an at-fault accident because there is no official record of the other party.
Additionally, if your vehicle is older and sustains significant damage, the cost of repairs might exceed its value. If your insurer decides it is a total loss, they will settle based on the Actual Cash Value of the car, not what it would cost to buy a new one.
This is why it is always helpful to establish an educational benchmark of your vehicle's market value so you know what to expect if the worst happens.
Frequently Asked Questions
While it can be tempting to accept a cash offer to avoid dealing with insurance, it is generally very risky. Repair costs are often much higher than they appear, and if the driver stops answering your calls, you could be left with the bill and no police report to fall back on.
Your Uninsured Automobile Coverage doesn't just cover vehicle damage; it also helps cover medical expenses, rehabilitation, and sometimes lost wages if you are injured by an uninsured driver, subject to your policy limits.